The East Street development has been in the pipeline for 11 years
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A plan for new shops, restaurants, a multi-screen cinema and 239 homes has been approved for a Surrey town centre.
The controversial East Street development in Farnham was approved on Wednesday night by a 33-1 majority of Waverley borough councillors.
They also approved the Redgrave Theatre demolition and the conversion of listed Brightwell House into two restaurants.
The planning committee had more than 6,000 written representations and objectors packed the public gallery.
The development, a joint scheme by Sainsbury's and Crest Nicholson, has been in the pipeline since 1997.
Those in favour said it would regenerate an under-used site in the town centre and provide a new use for a restored Brightwell House, in an enhanced setting.
There would be a new town square and gardens and new entertainment and leisure facilities.
Credit crunch
But protesters objected to the loss of the theatre, increased traffic and congestion, loss of trees and historic features and modern buildings close to a conservation area.
"The views for an against this application have been thoroughly aired over the years, particularly since the final application was submitted," said committee chairman Peter Isherwood.
"We will now work with the applicants to ensure that the end product is one of which Farnham and Waverley can be proud."
But leader of the council, Richard Gates, said the credit crunch had affected all new developments and presented its own challenges.
"We now need to address the challenges and will be bringing options to council as soon as possible," he said.
"We really do want to work with everyone in Farnham to make this scheme a success."
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