A MULTI-MILLION pound plan to build a shopping centre in the heart of the city has been dumped after a funding row between developers and the Town Hall.

The Oxford Mail has learnt global equity firm, the Carlyle Group, has withdrawn its plan for a £22m open air centre between St Aldate’s Tavern archway and Queen Street, behind the Marks & Spencer store.

Last night, business leaders said the city desperately needed new stores to attract more visitors.

Frank Nigriello, chairman of the Oxfordshire Economic Partnership, believed the city would suffer as a result.

He said: “It’s very disappointing to hear this development has disappeared – I think most businesses in Oxford would have welcomed the scheme. We’re talking about an internationally renowned company looking to invest in a part of the city which has been overlooked for years.

“Oxford has been offering people less and less for a number of years, with the high cost of car parking and congestion.

“It’s developments like this that will attract shoppers, daytrippers and tourists to come back.”

Carlyle was unable to agree with Oxford City Council how much it should pay into Town Hall coffers.

Developers are required to pay Section 106 contributions, which can pay things such as other developments and local services.

In this case, the money would have gone towards funding the West End infrastructure, including Frideswide Square improvements.

In July, the Oxford Mail revealed the whole scheme was under threat because both sides were unable to reach a deal.

Business leader and spokesman for campaign group Rox, Graham Jones said: “This is a great pity.

“It would have been much quicker to develop this site than the Westgate, so it would have been a very useful bonus. We need schemes like this to attract footfall and increase visitors.

“I don’t know where the fault lies, but I do think the city council could have been more positive in resolving the issue.”

The scheme would have included nine new shops, 17,000 sq ft of office space and accommodation for up to 96 students. Large areas of the site are owned by Merton College.

Much of the site was bought by the Carlyle Group on a 135-year lease.

A small part of the land, currently used as a private car park, is owned by the city council.

Council spokesman Louisa Dean said: “The scheme did require a significant Section 106 contribution from the applicant. The officer report, which went to central, south and west area committee in December, recommended refusal.

“The officer's report along with further concerns from councillors was due to be discussed by the strategic development control committee in December.

“However, the applicant withdrew their application prior to the meeting.

“We are pleased with this decision as at this stage we feel unable to approve their application.”

Ward councillor Stephen Brown said he was disappointed with the decision to withdraw the plans.

The Liberal Democrat, who is the leader of the opposition, said: “There was a lot to commend the plans and they had a lot of support.

“I just hope this is not the end and some new development can potentially rise from the ashes.”

Carlyle Group declined to comment.

  • Other developments in Oxford have struggled to get off the ground in recent years.

The £330m revamp of the Westgate Centre was first granted planning permission in 2006.

The scheme would increase the city’s retail space by a quarter. However, almost five years later, work is yet to start, despite the city council granting planning permission again last November.

In 2007, multi-million pound proposals for a new Odeon cinema and shopping area in George Street were submitted.

The scheme promised to transform Gloucester Green, with the existing cinema demolished to make way for a new building with shops.

The scheme was later axed.

The same year ambitious plans were floated to transform Worcester Street car park into a canal basin surrounded by shops, restaurants and flats.

But almost four years later, the plans have yet to materialise.