DEVELOPMENT company St Modwen is scrapping its regeneration plans for Bognor Regis.
The firm has told Arun District Council it no longer wants to build the schemes for the Regis Centre and the Hothamton sites.
The proposals included a multiplex, hotel and flats on the seafront and a food store at Hothamton in Queensway.
It was originally valued at £105m. This had fallen to some £25m last year.
In a letter to the council, St Modwen’s London regional director, Tim Seddon, said: “... I confirm on behalf of St Modwen, that the company is prepared to enter into a deed of surrender of the development agreement on the basis of no compensation to either party and both parties pay their own costs of entering into a deed of surrender.”
The news was revealed on Tuesday evening.
But Arun District Council immediately announced it wanted to carry on with the regeneration, which it has tentatively valued at £50m.
Councillors will be asked next Wednesday to approve spending £500,000 compiling an outline planning application and end the deal with St Modwen.
Council leader Gillian Brown said Arun did not want to lose the chance to regenerate Bognor.
“We are showing our confidence in investing in the town by leading from the front.
“We have to drive forward with this scheme and build on everything that has happened. We are confident there will be a lot of interest in this scheme,” he said.
The initial proposals allow for a four/five-screen multiplex, restaurants and bars, an hotel, 100 flats over three or four floors and six townhouses around the Regis Centre site.
New front-of-house facilities for the Alexandra Theatre have been included as well.
There will also be 295 car parking spaces and an upgraded Place St Maur.
For the Hothamton site off Queensway, it is envisaged there will be a 15,000sq ft food store, 295 spaces in a car park of two to four decks with 100 flats above.
The council intends to prepare the scheme by next February for its members to debate ready to submit an outline planning application in July, 2015.
Possible approval could be granted three months later.
Arun will approach property developers with the approved scheme and ask them to submit tenders to build it.
Council chief executive Nigel Lynn said: “We have put a lot of time and effort into this scheme to date and we want to get the best value for Bognor.
“We are carrying out soft market testing at the moment to gauge the interest there would be in this scheme.
“We will do more testing as the work progresses.
“The more people we have interested, the better it will be for the council taxpayer for the better development we will get.
“The council getting planning permission will reduce the risk for the developer.”
It was in December, 2007, that Arun and St Modwen formally agreed to develop the two key sites. The deal was signed after some 18 months of talks and public exhibitions which involved six developers.