Downturn halts £500m development

The project aims to develop land at Middlefield adjacent to Falkirk stadium

The future of a £500m development to transform a 150-acre site in Falkirk and create 5,000 new jobs is in doubt.

Macdonald Estates and Royal Bank of Scotland have said the Falkirk Gateway development is not feasible in the current economic climate.

Falkirk Council said the plan to build a hotel, commercial hub and office space on the edge of the town would be looked at again in two years.

The local authority insisted it was still committed to the project.

Development of the site at Middlefield was heralded by the council as a "visible symbol" of the regeneration of the Falkirk area.

Plans were agreed two years ago to create a new marina serving the Forth and Clyde canal, 500,000 sq ft of business space and a retail park.

If our tenants feel they can delay investment in the current economic climate and reserve their position then they will Niall McLean Macdonald Estates

However, the development has been unable to convince a "big name" retailer to the site and attract others.

A spokesman for Falkirk Council said the economic downturn was having a big impact on the developer's investment yields, which had called into question the viability of the plans.

'Feel comfortable'

He said: "The developers have already put in a great deal of work into this, including feasibility studies, and planning permission has also been agreed in principal.

"At this point in time we have agreed to an extension of two years.

"We hope after that point that there will be a turnaround in the economy and things will pick up.

"All parties in the scheme are committed."

Niall McLean, development manager at Macdonald Estates, said: "There is an understanding that we have put everything in place to ensure that once things pick up, we will be able take the project forward.

"There is a large infrastructure requirement for this development of about £15m and we require retailers to make that work.

"If our tenants feel they can delay investment in the current economic climate and reserve their position then they will.

"But we feel comfortable that will change in the future."