Property firm Hammerson could still create part of Sheffield’s planned new city centre retail quarter – despite being axed from the overall scheme.
The Star can reveal the company still owns part of the former Sevenstone development site - mainly buildings which open on to Pinstone Street.
And agreements between Hammerson and Sheffield Council mean the land can be sold back to the council only, not to a third party.
But Hammerson may be allowed to retain the properties and develop them.
The company has already paid millions of pounds towards compulsory purchase orders for the rest of the former Sevenstone site.
A source close to the council said: “The council owns all of the land bought under compulsory purchase orders, but Hammerson bought some of the buildings itself and could retain ownership of them.
“It is a delicate situation and negotiations are ongoing.
“The council needs to find a way around the situation, but it will be at no cost to the council tax payer – and we will not be held to ransom by Hammerson.”
At the end of July, Sheffield Council said it would be parting company with Hammerson after the company would not commit to a date for starting work.
The old Sevenstone plan, which would have created around 100 shops and a new John Lewis store between The Moor, Barker’s Pool and Wellington Street, would have cost up to £600 million.
Revisions of the scheme brought that down to £400m.
Hammerson said it had not decided when to begin work on Sheffield’s scheme because it had taken on other commitments including centres in Leeds and Croydon.
When Sheffield Council announced it was ending its agreement with the company, council executive director Simon Green said one or a number of replacement developers could be brought in.
If Hammerson keeps the Pinstone Street buildings, which stretch from opposite the Peace Gardens to Moorhead, one or more other companies would be needed for the rest of the site.
But Richard Wright, executive director of Sheffield Chamber, said: “If Hammerson is still willing to develop that section, that’s great – as long as it fits in with the overall plans for a distinctive city centre. They are a good developer.”
Sheffield Council leader Coun Julie Dore said: “The details of the major development agreement with Hammerson are complex but, one thing is for sure, Sheffield will not be held to ransom by anyone.
“The major development agreement gives us legal options to acquire any land in Hammerson’s ownership, within the development area. That means all land required for the scheme will be in safe hands.”