Developers excused £76,000 payment which would have been spent on public recreation area and wardens

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COUNCILLORS have excused developers from contributing £76,000 towards public projects after they said a Sheffield building project might not be completed because of the financial burden.

Plans for 27 private apartments and 75 student flats on Solly Street, between Netherthorpe and West Bar, were drawn up in 2006 by the now-defunct development company Merlin Estates.

In return for planning permission the Crookes-based company signed a Section 106 agreement to pay £64,266 towards creating a recreation space, £7,600 towards pedestrian routes and £4,350 for street wardens.

Merlin Estates went into administration in 2009, leaving debts of £15 million and dozens of creditors with unpaid bills.

The Solly Street project, which was only partially completed at the time of the collapse, has been taken over by creditors Close Property Finance, who lost £2.8m in the saga.

The organisation, which says it will cost £1m to complete the project, asked the council to waive the £76,216.

Peter Revell, of agents Broadfield Project Management, told the city centre, south and east planning board that completion of the scheme was in the balance.

He said: “The original developer went bust and the funder has lost a considerable sum, to the tune of around £3m.”

Coun Peter Price opposed the waiver and said developers often go into administration to rid themselves of debts and other financial burdens, although Mr Revell insisted no-one from Merlin is still involved in the project.

Coun Price said: “Just because they mismanage it the community shouldn’t have to suffer. I think we should stick it out. These agreements are done to recompense the community.”

His view was backed by planning officers, who said excusing the developers from their obligations would be detrimental to the interests of existing and future occupiers and the wider St Vincent’s Action Plan area.

But Coun Alan Whitehouse said: “I think this is one of those situations where we are trying to get blood out of a stone. If the developer has gone bust there is no money.”

A split planning committee voted four to three to waive the fees.