A proposed retail development for the centre of Lichfield has become one of the first victims of a cost-cutting drive by Advantage West Midlands.
The regional development agency admitted yesterday that it had withdrawn funding for the Friarsgate Centre scheme as it looks to save tens of millions of pounds from its budget.
Mick Laverty, chief executive of Advantage West Midlands, said: “Unfortunately we will not now be providing funding to the redevelopment of Friarsgate in Lichfield City Centre.
“These have not been easy decisions to make. We have prioritised those projects that deliver the largest possible impact to the regional economy.”
Lichfield MP Michael Fabricant said: “This is disappointing news though with the economic downturn, I’m not surprised.
“I have known for some time the shopping centre developer has been experiencing difficulties finding stores willing to expand into Lichfield and elsewhere. I fear this means Friarsgate is dead in its planned form for the foreseeable future.”
But the council said retailer interest was “still very high”. District council leader, Coun David Smith, said: “Friarsgate is absolutely not dead. Quite the contrary, Friarsgate is very much alive.
“The AWM funding was only ever going to pay for less than five per cent of the overall costs of the development, and was being used to pay for part of the costs of moving the police station, rather than for the shopping centre itself.
“Whilst we are of course disappointed by AWM’s decision, it will in no way stop Friarsgate. As a council we are committed to Friarsgate, and whilst the current economic climate has slowed progress, we are still confident it will be one of the first developments of its kind to progress when the market picks up.
“Despite current conditions, interest from big name retailers is still very high and absolutely no retailers have pulled out.”
David Clancy, of developers S Harrison, said: “Retailer interest in Friarsgate remains high. It is the current banking situation that has delayed the project, not the lack of occupier interest.
“Indeed, we have spoken to many of the key retailers in the last month and they all remain committed to Friarsgate and want a store in the scheme as soon as possible.”
In May AWM wrote to all its ‘stakeholders’ warning that all projects were being re-examined in a bid to save £50 million, and last week the Agency announced that 122 regeneration projects were being shelved.
The organisation said its revenues were down £21 million due to a reduction in land a property receipts and that Business Secretary Lord Mandelson had ordered it to focus the money it does have on measures that directly support industry, rather than regeneration.