'Bright future' for site after £28.5m lease deal

The future of a city centre hotel, food and retail development "looks bright", according to Oxfordshire County Council, after the local authority agreed to purchase its lease.

Oxford Castle Quarter's £28.5m lease, which comes from the council's capital programme, is set to be brought back into public ownership, following independent advice that the deal represents "a sound long-term investment for taxpayers".

The development, adjacent to Oxford's medieval castle and Victorian former prison, is popular for dining, entertainment and accommodation.

Dan Levy, cabinet member for finance, said the move created an opportunity to "support positive change" to the western approach to the city centre.

The development of the heritage site which was opened by Queen Elisabeth II in 2006 included St George's Tower and the Castle Mound, which are some of the oldest structures in the city.

The Malmaison chain spent £20m on turning the prison at the centre of the site into a luxury hotel.

Levy said it was not a decision that "has been taken lightly".

"We have carried out thorough due diligence and sought expert advice to make sure the risks to the taxpayers and the county council are low while the prospects for real benefits are high.

"The clear conclusion was that returning the lease to the county council as the existing freeholder was the right decision, with good prospects for both the city centre and public funds," he said.

He added that, alongside the ongoing transformation in and around the railway station, it created "an opportunity to refresh and boost" the Castle Quarter.

"The ingredients for success are clear to see and there is excitement about the change that can now begin to be delivered," he said.

In 2005, the county council decided to sell a long-term lease for Castle Quarter to enable major investment in the redevelopment of the site.

Current occupants include Malmaison Oxford, Namaste Village Oxford, The Slug and Lettuce, the Swan & Castle and The Key Learning Centre.

The council said that while some of them "continue to perform strongly", others "offer clear scope for renewal and further investment".

It added that as existing freeholder of Castle Quarter, it "seized the opportunity" to purchase the lease when it became available.