PLANS to build student accommodation on Lerwick’s Commercial Road look to be dead in the water after it was confirmed that the site had never actually been sold to property developers Cityheart – despite tenants HNP Engineers being evicted to make way for the sale two years ago.
The land and buildings at 66-72 Commercial Road remains part of Shetland Leasing and Property Developments Limited (SLAP), which was taken over by Shetland Islands Council last month.
New SLAP director and the council’s capital programme manager Robert Sinclair confirmed the sale to Cityheart was never concluded, adding that there are no “immediate alternative plans for the site”.
Chester-based property developers Cityheart received planning permission in 2016 to create an 80-room University of the Highlands and Islands student hostel on the site after landlord SLAP – then owned by Shetland Charitable Trust – looked to sell the site.
HNP, which had been a tenant there since the 1970s, was aggrieved at how SLAP went about negotiating the sale of the site and there was months of dispute before the engineers moved to new premises at Lerwick’s Lower Blackhill industrial estate at the end of 2016.
The directors of SLAP at the time said in a letter to the media the company had decided to “accept an offer that was considerably higher than HNP’s”, adding that it was “based on a robust open market sale process”.
Concerns were raised earlier this year, however, over the length of time the student accommodation plans were taking, with European financial backers worried over the impact of Brexit.
It is understood that a report will come through Shetland Islands Council in the future on the properties now owned by the local authority after the £17.5 million SLAP deal.
HNP director Ian Walterson said it was lucky the engineers found suitable alternative premises – otherwise the company would not exist today.
“Whatever now happens to the site at Commercial Road is entirely up to the people who own it,” he said.
“It was quite a disruptive process to first of all find another location, and then to move there.
“It was quite difficult, but since we’ve re-established the company here at Lower Blackhill Industrial Estate we’re looking ahead and getting on with running our business.”
Cityheart did not respond to repeated requests for comment – and when contacted for a response, UHI said it was a matter for Cityheart to deal with.
Suggestions were raised by officials in May that UHI student accommodation could be integrated instead into a redeveloped old Anderson High School site.
There is still a strong desire for student accommodation in Lerwick, taking in people with Shetland College and Scalloway’s NAFC Marine Centre.
Chairman of the Shetland College Board, councillor Peter Campbell, said having affordable accommodation would encourage more people to study in the isles.
“We’re desperately needing student accommodation, both for the college and for the NAFC,” he said.
“We believe it would be a significant boost to the college if we had such accommodation – we’d be able to attract students from outwith Shetland in more easily.
“Renting from the private sector has been a factor in students declining offers of places for a number of years.”
Campbell added that the college knew for “some time” that the Commercial Road project was not going to happen.
“It was quite clear that that project was not going to go ahead,” he said.
“In the masterplan for the Knab, the former Janet Courtney halls of residence has been identified as a potential student/young person accommodation, so that’s a positive.
“But even if a decision was taken tomorrow to go ahead, it’s going to take time before that could all be put in place.”
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