Realis Estates has offered reassurances that the City Sentral scheme will go ahead following reports that the developer is heavily in debt.
The multi million pound retail and leisure development was due to open in 2015 but a lack of progress has led to fears that the scheme has stalled.
News that the city’s new central business district will also include retail space added to these doubts and, before Christmas, Stoke-on-Trent Central MP Tristram Hunt said it was likely that the original plans for the 650,000 sq ft development would be scaled back.
Now reports that Realis is almost £23m in debt have prompted auditors to warn that the uncertainty casts “significant doubt about the company’s ability to continue as a going concern.”
However, as the developer has established a special purpose vehicle (SPV), to deliver the project, Realis insists there is no threat to the future of the scheme.
“It is quite normal for a company of this type to appear to be in debt and for auditors to include the kind of caveat that is included in the Realis accounts,” a spokesman said.
“With a development project such as City Sentral, the situation is very fluid. We move funds into the company as and when required.
“Any valuation of the company assets can, therefore, only ever be a snapshot of the position at a specific moment in time.”
He continued to say that Realis has already invested heavily in the scheme and that it will continue to do so to ensure that it progresses.
Despite this reassurance, Independent councillor Paul Breeze believes the latest setback threatens the credibility of the development.
“I don’t think this situation with Realis’s debt sounds normal at all. It just sounds like more spin from Realis and the council,” he told The Sentinel.
“Personally speaking, I suspect this whole project is going to fall flat on its face.”
This scenario would deliver a severe blow to Stoke-on-Trent City Council’s Mandate for Change which aims to transform the city centre and encourage inward investment.
With a new bus station already delivered, and work on the central business district underway, City Sentral has long been regarded as a key element in the city’s trinity of urban renewal projects.
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