There’s an intriguing sweepstake in Durham. Guess the right answer to what has become arguably the city’s greatest conundrum and you’ll be toasting your success with a year’s supply of beer. 

To win just name the date the Milburngate complex of riverside leisure units, offices and apartments will finally open. 

Worth a punt? Don’t break out the bottle opener just yet because, as it stands, no-one knows the answer… neither the developer, the prospective tenants nor Durham County Council who are supposed to become the landlord of the £120m city centre site.

The initial confidence in the scheme is being rocked. Pitcher & Piano announced back in 2017 they’d be moving into Milburngate. They have now pulled the plug with the chain’s owners confirming to The QT: “Marstons is not progressing with this”.

Meanwhile, the past 12 months of the ‘will it, won’t it open?’ saga has been doing the head in of James Watt, CEO of the BrewDog chain. More than a year on from when he expected to open the doors on his £1m investment, he’s still waiting. 

In frustration he took to social media to lambast the county council for the repeated delays in the development’s completion. He made the offer of free beer in an attempt “to speed up the council” in what he calls a tragic tale of “epic incompetency”.

In last week’s edition Bob Hudson raised some questions about the year-long standstill. The QT has been doing some digging to see what’s behind a hold-up that has created a ghost town within the heart of the city.

Visible from across the River Wear, a massive white canvas proclaims “The dog is coming”, only it’s not. Milburngate’s delivery ramp is gathering green algae through lack of traffic. Behind the neat Premier Inn signage, the rooms are built but no guests can check in and, ironically enough, everyone is barred from the Everyman Cinema. The entire development wears an unsightly and unwelcoming metal necklace of interlocking barriers around its perimeter.

Work stopped months ago. If there were any cobwebs, last weekend’s high winds would have blown them away. When I visited this week, a contractor with a leaf blower was scattering the fallen foliage to maintain an altogether unconvincing lived-in look. He was the solitary human figure visible on the entire site.

This impasse all comes down to a very tense chicken and egg situation with the developer and the council arguing over what’s called ‘practical completion’ with neither seemingly willing to budge unless the other does. 

Until they do, Milburngate will remain in limbo. 

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Practical completion is the term used when a construction project is signed off by the prospective proprietor and takes ownership, notwithstanding some final issues that may need remedial work. Think of it as completing the purchase of a brand new house from a builder with a few snags that you both agree will be sorted out. You move in but a plasterer may turn up to fix the uneven finish — only this is all on a much grander scale with bigger problems and lots of money at stake. Public money. 

The QT understands the council signed an ‘agreement to lease’ which sets out that it would take on the 35-year head lease of Milburngate, but only once practical completion is reached. As landlord, the council will receive all the rent from the leisure, retail, office spaces and homes but with that come all the legal responsibilities and liabilities. It’s a key moment which is why both sides need consensus on whether the development is, to coin the legal jargon, practically complete. 

The big stumbling block to the council signing off on practical completion has been the fire protection added to steel girders within the complex. Intumescent paint, which swells up under heat to protect the metal frame from buckling in a fire, was not thick enough. With the council potentially tying itself into the lease, alarm bells would understandably be ringing at County Hall if they thought it wouldn’t get a fire certificate and was uninsurable.

This issue dates back to February of last year when the on-site construction company, North East-based Tolent, went into administration. With construction halted the developers — a joint venture between Arlington Real Estate and Richardson —  examined the work to date and uncovered the issue with the intumescent paint. They drew up an outline plan on how to fix it and believe the council needs to agree to their proposed remedy before work can begin.

Here is where it gets mired in technical detail, different legal interpretations and conflicting accounts of how things should proceed. 

‘Practical completion’ is not precisely defined in law but previous court rulings suggest this pivotal point in a construction’s timeline can and should be reached if the outstanding items are “de minimis” i.e. not substantial — a snagging issue to go back to the house-buying analogy. So it boils down to how you interpret the intumescent paint issue — is it a snag or something more substantial? 

According to sources contacted by The QT, what appears to be at issue is whether the remedial plans were detailed enough to give the council confidence it could move to the next stage without fear of taking on an unknown liability further down the line. Seemingly one side thinks yes, the other no.

Another sticking point hinges on who will do the work. The developers selected new construction managers, Ladyinch Management Ltd, who some nine months ago publicly announced they’d been contracted to take over from Tolent. But my sources tell me Ladyinch cannot be formally appointed and finish the job until the council agrees to the proposed remedial works.

As a result, none of the fire safety improvements have begun. Stalemate.

A spokesperson for Arlington Richardson told The QT: “We have been engaging extensively with the council in an attempt to resolve the outstanding issues and complete the development. We do not believe that there are any safety issues that cannot be resolved once the council allows us to proceed with the completion of the building in the usual way. Unfortunately, those negotiations remain ongoing with no agreement yet reached.”

For its part, the council told The QT in a statement: “Milburngate is owned by a private company, which is responsible for providing the delivery programme and the completion of the development, including the remediation of a number of fire safety issues. It is very disappointing that, to date, this has not been provided by the developer, which means the development cannot progress.

“From day one, our focus has been on ensuring the developer delivers a building that is safe, while also ensuring that we act in the public interest.”

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Publicly both sides have used measured tones in these and previous statements to the Press whilst calling for the other side to engage, dare I say it, constructively. The diplomatic language does not disguise the fact each side thinks responsibility lies with the other and it is up to them to make the first move.

BrewDog’s James Watt lost patience last month and in his LinkedIn post claimed the council were not responding to his emails. Giving the local authority both barrels he said: “The epic ineptitude and complete paralysis of the council (sic) our economy is missing out on hundreds of jobs”. 

So are they talking? That depends on who you talk to. When asked by The QT, the developers said there have been no formal face-to-face meetings since February 2023. The Council insisted: “Regular meetings take place between DCC and the developer, their representatives, tenants and the funder, and have done so throughout 2023 and into 2024.” 

Brewdog responded: “There has been some contact but no update or definitive answers given for the delay and crucially what needs to happen to solve it.” 

All the while the businesses which should have opened remain unable to open their doors. The delays have a very real human cost too. 92 jobs were up for grabs at the hotel, staff had already been appointed at the cinema and BrewDog which proudly posted shots of their new 30 strong team starting their training had to let them go.

Whitbread, who own the Premier Inn and Bar + Block brands, and Everyman have steered away from public comment on the failure to open.

With such a prominent city centre site, the uneasy deadlock is on daily view to residents and tourists alike. The longer it drags on so puzzlement grows as to just what the problem is. Public pronouncements from the interested parties have been contradictory and lacking proper detail of what is really stopping Milburngate from getting back on track. 

Such a void of public information is a conspiracy theorists dream. Are there more deep-seated problems on site? Is the council deliberately dragging its heels in order to renegotiate its lease agreement or even pull out altogether? Only once the centre opens and the council are collecting rents will any such unproven theories be put to bed.

Milburngate is owned by a private company, which is responsible for providing the delivery programme and the completion of the development, including the remediation of a number of fire safety issues. It is very disappointing that, to date, this has not been provided by the developer, which means the development cannot progress.

Durham County Council

Privately The QT has been assured there are no other major issues with the site and the council points out: “We have an established track record of delivering major regeneration schemes and of working in collaboration with the private sector and have worked tirelessly to try and support the developer in delivering the Milburngate scheme.”  

Elsewhere there are mixed signs of confidence in Milburngate opening anytime soon. Business Durham, the council’s own business support service, had a dedicated website page promoting Milburngate to prospective commercial tenants. It was taken down sometime after the end of October. No explanation has been given by the council when we asked why.

If, on the other hand, you fancy renting a riverside flat, you can still make a viewing appointment. So I did — my online booking gave me a half hour slot to have a look around later this month. I await further instruction on how I’m supposed to get past the barriers.

Google maps believes it has already opened. Bar + Block, BrewDog and Premier Inn are all flagged with some detailing today’s opening hours. The Premier Inn marker takes you to the hotel chain’s official booking page complete with a list of facilities, directions and a description stating it is “located in the buzzing Milburngate centre”. Try choosing a room, however, and you are told it is “fully booked” and it suggests you stay at their other location across the river. 

It seems the Milburngate saga is too much for artificial intelligence to handle.

Since The QT has been sniffing around, word reaches us that new talks about talks between all sides may yet be in the offing and could even include an invitation to BrewDog’s James Watt.

We’ll wait to see if his sweepstake offer of free beer to celebrate Milburngate’s opening date will be redeemed or whether he’ll yet need that year-long supply to drown his sorrows. Of course we can’t put a date on that… yet.

• Editor’s note: Story updated at 1.20pm on April 11, 2024 to include response from Brew Dog