A £1 billion redevelopment at Birmingham Eastside was back on track last night after the city council announced it had reached agreement to re-locate the MacDermid chemical plant.
The firm's premises in Palmer Lane, Digbeth, where hazardous substances are stored, has been holding up regeneration of the area for more than a year since the Health and Safety Executive advised the council against allowing housing to be built on surrounding land.
Under a deal between the council and MacDermid, the company will agree to restrict the type and number of chemical substances which can be stored on the site.
The move will reduce from 700 metres to 200 metres an exclusion zone around the plant within which all planning applications must be referred to the HSE. The council has agreed to help MacDermid relocate its operation to a more suitable location in the Birmingham area within three years - allowing the use of hazardous substances at Palmer Street to cease.
MacDermid will be paid an unspecified amount of compensation by the council for agreeing to restrict the type of chemicals kept on the site.
As a result of the agreement, more than £1 billion of investment including 172,000 square metres of housing and mixeduse development can go ahead, according to the council.
About 7,000 new jobs are expected to be created by the expansion of Eastside. Mike Whitby, the leader of Birmingham City Council, said: "I welcome the participation of all the parties concerned in resolving this matter.
"This agreement and the payment of compensation represents commitment to the regeneration of Eastside which can move on with greater momentum.
"We recognise the importance of MacDermid to the economy of Birmingham and will be working with them to achieve a satisfactory relocation. The agreement demonstrates my administration's support for Eastside and our ambitions for Birmingham."
Cabinet regeneration member Ken Hardeman admitted it had proved difficult over many months to resolve difficulties caused by the presence of the chemical plant.
He pointed out that MacDermid has the legal right to store chemicals at Palmer Lane, having obtained several years ago approval from the council and the Health and Safety Executive.
Coun Hardeman (Con Brandwood) added: "Eastside is a flagship regeneration project and it is important that the momentum of development is not held up for any longer than necessary.
"This deal unlocks major schemes which will have a significant impact on moving Eastside forward, and will give renewed confidence to those developers we know are considering investing in this dynamic new part of the city centre."