BUILDING work on Sheffield's new Sevenstone retail quarter has been put on hold indefinitely until the economy recovers, The Star can reveal today.
The 600 million pound scheme to redevelop rundown streets between The Moor, Barker's Pool and the Peace Gardens into a shopping Mecca looks to have become the latest victim of the credit crunch.
A spokesman for Creative Sheffield - the urban development company working to revitalise the city centre - confirmed today: "Plans are now being put in place to enable the main Sevenstone construction project to kick-in immediately the economy recovers."
He added: "Background and preparatory works for the Sevenstone development continue. The fire service building has been completed, planning applications are being considered, and the utilities-related works are finished."
The revelation follows repeated announcements by developer Hammerson delaying the project.
Work on Sevenstone was due to begin last year, with completion in 2011, but in August the start date was put back to summer 2009.
In November, it was announced the scheme was to be delayed by at least another six months, according to an Interim Management Statement released to the London Stock Exchange.
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Simon Bower, owner of Pollards Tea and Coffee on Charles Street, one of the few businesses still trading amid derelict buildings being bought under compulsory purchase orders for demolition, said: "The delays are unsettling for myself and my staff.
"I'm very disappointed the regeneration is not going forward because we cannot make any plans."
His store is subject to a compulsory purchase order which has not yet been completed.
Mr Bower added: "If this scheme does not go ahead it's going to be a disaster. We will have to work out what to do with a number of derelict buildings."
Coun Jan Wilson, Sheffield Council's opposition Labour leader, said: "This is disappointing although unsurprising in current circumstances.
"It is the last of the Magnificent Seven city centre regeneration projects, which include St Paul's and Heart of the City, to be completed.
"I will be urging steps are taken to support the city's economy so Sheffield is well placed for this project to resume at the earliest opportunity."
Sheffield Council chief executive John Mothersole said: "We are pushing ahead with Sevenstone. The important thing is that this city is ready for the economic upturn and, as far as I'm concerned, construction is to start as soon as possible."
But he said he had not been given a date for work to begin.
"The last statement I received was they were not going to be starting any building work in 2009," he said.
Mr Mothersole said work towards the scheme, including demolition of the old fire service headquarters in Wellington Street - being replaced by a new building in Eyre Street - will go ahead, funded by Government regeneration cash.
Department store John Lewis is due to move to the Wellington Street site from Barker's Pool.
Mr Mothersole said frontages of shops vacated ready for the bulldozers had been brightened up and, if there is a long delay to the project, the council would seek to re-let the units.
But he admitted: "It's currently an incredibly difficult market to let retail space."
Hammerson said it was unable to comment due to being in a "closed period for financial reporting".
"We are unable to provide updates on our retail portfolio and development pipeline projects, which includes Sevenstone," a spokeswoman said.
A lengthy delay to the project would result in legal complications.
Compulsory purchase orders for buildings within the new retail quarter area, drawn up last summer, must be completed within three years - by mid 2011 - or would have to be re-negotiated.
And construction must start within five years of receiving planning permission before it would need to be applied for again. Half of Sevenstone's eight blocks were approved at the end of last year, which means building must start by the end of 2014.
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