Second phase of Crewe's Royal Arcade scheme at risk

Phase one of the scheme, involving a new bus station and car park, is set to be completed next year, but phase two is in doubt

Part of a huge development in Crewe is at risk, with a report partly blaming the scrapping of HS2.

Alternative proposals could now be drawn up for the second phase of Cheshire East Council's Royal Arcade scheme and could involve a temporary park on the site.

A report to councillors said double-digit inflation had hit the build cost, which was already in excess of £40m.

News HS2 would not reach Crewe had also affected market confidence, it said.

Cheshire East Council entered into an agreement with Peveril Securities for a two-phase scheme in the town centre in 2020.

The local authority bought the site in 2015 and work began last year, with demolition work starting in January.

The first phase includes a new bus station and a multi-storey car park, which is set to be completed by spring 2024.

A second phase of leisure space was set to follow - including restaurants, a cinema and retail space.

But the new report said the council needed to consider different options for the site because of "viability challenges".

Work on phase one of the project began earlier this year

Four options are now being considered:

• Continue with the scheme but look for other public-sector funding

• Grant an extension to the existing contract with the developer to allow the market to settle

• Scrap the agreement with the developer and consider a smaller or alternative scheme

• Scrap the agreement and seek temporary uses for the site - which could include a park, flexible leisure space and medium-term commercial space

It is this fourth, temporary "meanwhile" option that the council is focusing on.

In the report, council officers said there was leisure sector interest, but that the increase in construction and interest rates had "adversely affected the cost".

They added that terminating the agreement with the developer would "render unlikely" any similar development on the site in the next five years.

The plans will be discussed by the council's economy and growth committee on 14 November.