A development agreement for a stalled city centre site is set to be torn up in an attempt to spark a revised regeneration project.

Southampton City Council currently has an agreement for the Toys R Us site with leaseholder Packaged Living.

The firm secured planning permission in 2022 for a mixed-use scheme featuring four blocks, with more than 600 build to rent flats, restaurants and shops.

However, no spades have gone in the ground for the £200 million  ‘Maritime Gateway’ project and the approval will lapse in December.

READ MORE: Ambitious petition submitted to city council to turn Toys R Us site into a theme park

Despite extending the development agreement with Packaged Living in April 2024, several conditions and milestones have not been met.

Now a “third-party joint venture” is seeking to acquire the lease for the 4.8-acre plot between Harbour Parade and Western Esplanade.

Cabinet members are being asked to sign off on terminating the existing development agreement with Packaged Living and enter into discussions with any interested third party.

A report to the meeting on March 25 by director of economic development and regeneration Nawaz Khan said: “The aim of acquisition is to facilitate the stalled regeneration of this key city centre site, which has planning permission for new homes, public spaces, leisure, and commercial uses.

“This would involve ending the development agreement with the current leaseholder, reviewing lease terms to be offered to any new entity leading on the development of the site, and exploring opportunities for greater council involvement in the site’s redevelopment in the future.”

READ MORE: Toys R Us homes yet to start as homes scheme scrutinised

Toys R Us closed in 2018 when the retailer collapsed.

The site has sat derelict since apart from a brief period when it stored donations for Ukrainian refugees in 2022.

The council agreed to the development agreement extension for Packaged Living last year in light of macroeconomic challenges.

Mr Khan’s report said this had not resulted in a positive outcome.

“Revised proposals are needed to unlock this key development and regeneration site to drive the economic, social and environmental benefits visualised in the council’s regeneration and master plans for the area,” the report added.

The plan would see the third party receive a regeared headlease from the council with revised terms upon acquisition of the site from Packaged Living.

This would be “substantially” in line with what was already in place but revisions would align with the local authority’s aspirations for the area, the officer’s report said.

The recently published Southampton Renaissance Vision identifies the Toys R Us site within the West Bay Renaissance Area as a “key location for long-term redevelopment”.

This renaissance area also includes the railway station, the former Pirelli site, connections to the port, West Quay Shopping Centre and the western Old Town walls.

The vision sets out the creation of a “globally significant innovation district” for this area, which would deliver an improved city centre gateway at the station, expand on education and university assets, and provide a series of creative and enterprise hubs.

Mr Khan’s report said: “Best practice is to provide these uses as part of an attractive mix, therefore including homes and commercials spaces that together create a liveable, sustainable neighbourhood.”