Tesco is set to throw in the towel in its long running battle over a key regeneration site in Sunderland.

The supermarket giant has announced that it is considering calling off its five-year struggle to develop the site of the former Vaux brewery.

The 15-acre site, which is next to Sunderland city centre, has lain vacant since the brewery closed in the late 1990s. Tesco bought the site and submitted an application for a £150m scheme including an 80,000 ft2 hypermarket, a 90-bed hotel, offices and 500 homes.

CZGW’s masterplan will reconnect the city centre with the River Wear

CZGW’s masterplan will reconnect the city centre with the River Wear

However, these proposals did not fit with the masterplan for the site, drawn up in 2002 for Sunderland ARC, an urban regeneration company, by Piers Gough and Andrew Daws of CZGW.

The prescription for the site in the masterplan includes more than 1000 homes housed in a mix of blocks, office space for 3000 workers, two hotels and a riverside park.

It also contains a bridge to the opposite side of the River Wear and Sunderland FC's Stadium of Light. The plan would also reconnect the city centre with the Wear, from which it has been separated for the last century by factories.

After four years of deliberation, Sunderland council gave permission to ARC's masterplan in September. But its failure to take a decision on Tesco's parallel application has prompted an appeal by the retailer to the planning inspectorate. This is yet to be heard.

Tesco is seeing if there is a way out of what could be a very prolonged battle

Tesco spokesperson

Meanwhile, the council is expecting to find out this week if the Government Office for the North East has given the green light for ARC's masterplan.

Tesco is also under pressure from the One North East regional development agency, which is one of the ARC's key sponsors.

The RDA has said it will use compulsory purchase powers to acquire the site.

A Tesco spokesperson said the company has told the ARC that it will give up its fight to develop the former brewery if the company is able to buy an alternative site elsewhere in the city.

He said "We understand that the site is going to be difficult and that the timescales involved would be long. Tesco is seeing if there is a way out of what could be a very prolonged battle."

Gough gave a warm welcome to Tesco's offer. He said: "This would be wonderful for Sunderland if our project is given a clear run. It meets the aspiration of Sunderland and the ARC for mixed use on the site."

Trouble brewing …

  • 1999 Vaux brewery shuts down
  • February 2002 Tesco buys site
  • October 2002 Tesco submits plans for hypermarket
  • December 2002 Sunderland ARC unveils CZWG’s masterplan for the site
  • April 2004 One North East regional development agency commences compulsory purchase of site
  • November 2004 Tesco revises plans to fit with ARC’s brief
  • September 2005 Sunderland council gives planning permission to ARC masterplan