A flagship £300 million shopping centre development in Wolverhampton will be delayed by six months after being hit by the credit crunch.
Uncertainty over funding has been blamed for the temporary halt to the huge Summer Row project, on which work was due to start in the spring. But developers and the city council have moved to allay fears that the complex would never be built, saying they hoped construction work would now start in late 2009.
Irish backers NI Investors have failed to give its formal agreement to provide funds for developers Multi Development UK Ltd, its partner in the scheme.
The 600,000 sq ft development, intended to revive the fortunes of Wolverhampton city centre, had already been hampered by a legal challenge made in March by London & Cambridge Properties (LCP), leaseholder of the neighbouring Wulfrun Centre shopping complex.
LCP went to the High Court to contest the legality of compulsory purchase arrangements which formed part of the Summer Row development, preventing work from starting this year.
Paul Sargent, Multi Development’s managing director, said he was “devastated” by the delay.
He said about 40 per cent of units in the development, which will be anchored by Debenhams and Marks & Spencer. had already been pre-let.
“The key issue to remember is what the council and Multi Development are saying is that this is very much still alive as a project,” he said. “This project is being delayed, that’s all.”
The delay will heap confusion on businesses on the south side of Wolverhampton preparing to leave their premises under compulsory purchase orders.
Multi Development has apologised to traders hit by the delay and said that their land will not now be required until mid-2009. The £300 million development, also incorporating leisure and homes, is now due to open in spring 2013.