YORK developer Grantside may sell a significant part of the former Terry’s chocolate factory site, where hundreds of homes are planned.

The firm, based at Holgate Park, bought the Terry’s site in 2006 for £26 million, since when it has been working up a comprehensive redevelopment scheme leading to the creation of 2,700 jobs, two hotels, shops, bars, restaurants and homes.

The £165 million project has suffered extensive delays, but demolition work finally started last week to clear the site and prepare the way for the redevelopment to start.

Now managing director Steve Davis has revealed that he has been in talks for a number of months with several other prospective developers wanting to take over the residential side, which comprises about half of the total mixed-use development.

He said there was a high level of interest – in particular in a proposed new residential development at the southern end of the site near Campleshon Road.

He said Grantside had been seeking to obtain a good price for the land and he was confident this would be achieved.

The firm would also look at selling the iconic factory building visible to motorists approaching York from Bishopthorpe, parts of which are ripe for conversion to apartments.

Mr Davis denied rumours circulating in York that the banks had “pulled funding” from Grantside’s scheme. He stressed the firm, which had little experience of residential development, had always intended to sell on parts of the development while maintaining an involvement in the overall scheme.

The buildings have stood empty since the landmark chocolate factory closed down in 2005 with the loss of the remaining 300 jobs, despite a campaign by The Press to save it from the axe.