Retail giant Tesco has been accused of betrayal after applying to withdraw £300,000 in local community spin off fees from a major Birmingham store.
The company, which announced £1.6 billion half-year profit last month, also wants to delay the handover of most of the £3 million promised to the city council until after it has opened its new store at the Swan Shopping Centre in Yardley in 2012.
Under a legal agreement, signed with planning permission in 2002, Tesco agreed to pay the cash, inflation linked, to fund the development of Oaklands Recreation Ground and would pay the money once building started.
The site has been derelict for many years as the company was locked in compulsory purchase legal wrangles and building work is only now about to start.
Council planners, who meet on Thursday, are expected to allow the reduced contribution, fearing that Tesco may withdraw or add further delay leaving the site derelict for more years.
Coun David Osborne (Lib Dem, South Yardley) said: “I am very disappointed that Tesco does not wish to fulfil a promise made to local councillors and residents on which support for their plans was based.
“To renege on that commitment at this late stage is considered by those who offered support to be a betrayal of good faith.”
He explained that locals broadly supported the Tesco plan over a rival bid from Sainsbury because the company offered more spin off cash and wanted to build on significantly less of the recreation ground.
“It is even more galling that one of the reasons they want to reduce the amount is because of the economic climate, this is after Tesco announced £1.6 billion profit, up 12 per cent on the previous year,” he added. His view has been backed by the Friends of Oaklands Recreation Ground.
Tesco made an application to vary the spin off deal, called a Section 106 agreement. The company explained that “ “protracted compulsory purchase procedure” has led to delays and increased costs, and the recession has had an impact on retail, construction and property industry.