The South West RDA has pulled funding from Westmoreland House
Budget cuts at the South West Regional Development Agency (RDA) mean the redevelopment of the derelict Westmoreland House in Bristol is under threat.
The RDA is facing cuts of £56m which it says it has to make in the midst of the recession which is gripping the country.
The agency was going to help fund a compulsory purchase order from that budget for the 1960s office block which dominates the 1.26 acre site in Stokes Croft.
The eyesore, which also includes a grade II* listed 19th century building, is just a stone's throw from modern developments such as Cabot Circus.
It's devastating news for this area because effectively if they pull out... nothing will move forward with it
Maryanne Kempf, chair of St Pauls Unlimited
Comer Homes bought the plot in 1989 but has not been able to agree plans for its development with the city council.
The Executive Director of Strategy and Communication for the RDA, Andrew Slade, says he thinks they have made the right decisions in how they allocated the reduced budget.
"We have tried to emphasise work that will really contribute to the economy where we are going to be able to get projects delivered over the next couple of years and where we can make a real difference.
"We think that the science park, Hengrove Park, the work at Weston and a number of other key investments including on aerospace in Bristol is where we'll get maximum value for our money."
Maryanne Kempf, the chair of St Pauls Unlimited, which works to create a better living environment in Stokes Croft, was involved in a meeting on Monday to discuss the news.
"I'm absolutely astounded, shocked," she said. "It's devastating news for this area because effectively if they pull out of the Westmoreland House complex then that effectively means nothing will move forward with it.
"It was such a boost to have the RDA's involvement in that and our hopes were so high for that development and now that means it won't happen.
I think we're going to see a lot of budget cuts from a number of areas of the economy as we work through this period of recession
Nigel Hutchings, Bristol Chamber of Commerce
"We developed a neighbourhood plan alongside the RDA - there were always big plans for Westmoreland House."
Nigel Hutchings, from the Bristol Chamber of Commerce, said the Westmoreland House scheme was "key" to Stokes Croft.
"They've had a very difficult decision for their regional budgets. Don't forget this covers the whole of the South West, all seven counties, and I think they probably made the best fit for a difficult situation.
"I think we're going to see a lot of budget cuts from a number of areas of the economy as we work through this period of recession.
"The Westmoreland House one, though, is particularly interesting and I do endorse [Maryanne Kempf's] comments that it is key to the regeneration of Stoke's Croft."
Bristol City Council said it was "disappointed" that the RDA "route was not available to them" but added there was no decision to "pursue a compulsory purchase order at this stage".
They added: "There is still the potential to explore a possible future development with the current owner."
Those owners, Comer Homes, said they have had a "very frustrating" time trying to develop Westmoreland House and are to appeal against a refused application for planning consent.
"We want to get it done as soon as possible," Luke Comer told us. "We want to build residential with some small shopping. If we had planning permission we would have had it done years ago.
"We have a new architect and hopefully he will do a lot better. The appeal will be submitted very soon."