Red Kite's Board has decided that it cannot go ahead with the development proposals for the Castlefield site.

Castlefield flats exterior

After significant debate at the meeting of our Board on 14th September, it was decided that developing the site is not financially viable. The cost of the proposed build, which is well over £60m, required a significant subsidy which rendered it too expensive.

Mike Gahagan, Chairman of our Board, explains: “It is with huge disappointment that we have to share that the decision was made not to continue with our plans to develop our Castlefield site.

“After looking at the figures we just could not get them to add up. We always knew that we would have to provide some subsidy on the site, but we cannot afford the levels required to make this development a sensible option in the current economic climate.

“For the last ten years we have battled hard to come up with a scheme that met the approval of the planning department, was affordable according to our business plan and that would also serve the local community to best effect. We could not, however, afford to put the financial stability of the business at risk which would impact on all our tenants and leaseholders.

“To get to this final stage and to find that it is not achievable is very hard to swallow. We are so disappointed for the community that this can’t be achieved, but we have to know when to step back, and that time is now. The Board is, however, convinced of two things: first, we cannot leave the site in its current condition so we'll be looking at costed options for its future, on which we will consult with the community and stakeholders: second, we must continue to increase our supply of homes for families to the extent that our finances allow.”

We will now go ahead and demolish the flats at the site in Pettifer Way, Longland Way, and Chairborough Road - which are not fit for purpose. This work will take place in Spring 2023.

Trevor Morrow, our Group Chief Executive, added, “After such a long journey to get to the point where we had a scheme that we could put out to tender, and to now have to make the decision not to go ahead is devastating.

“Our team has dedicated so much time to this project and done everything they can to get it over the line, but we just can’t commit to a project that has so much risk attached and is not financially viable.

“We remain dedicated to building much-needed homes in the area and will be seeking alternative ways to do this.”

Watch a video interview with Trevor Morrow, our Group Chief Executive, and find answers to your questions.