PLANS to turn a former garage and aeroplane factory in York into a hotel have stalled, placing renewed uncertainty over the future of the site.

City of York Council drew up a shortlist of bidders for the old Reynard's Garage in Piccadilly 14 months ago, but has now told the prospective buyers that the deal is off, it has emerged.

Sarah Tanburn, the council's interim director of city services, told councillors at a recent meeting: "We are, at the moment, not proceeding with the offers that were given to us, because they were not satisfactory in commercial terms."

It is understood the shortlisted bids were broadly similar, involving the demolition of the building and the construction of a new hotel.

The news reignites the possibility of the building being turned into a new 1930s-themed visitor attraction, as was proposed by the Yorkshire Air Museum and Northminster Ltd.

Ian Reed, museum director, told The Press yesterday he had never given up on his plan. He said it would not merely be another air museum, but a "1930s attraction for all the family", covering fashion, film, theatre and inventions from the era.

He said the plan, which would also include some housing on the site, would create a new attraction for York, and said its evening opening would help plug a gap in York's market.

"It's a really good project, which ticks all the boxes. We would be really interested in discussing it further if we got the opportunity."

Ms Tanburn told the council's economic development committee that the council also viewed the site as potential "leverage" during discussions about the rejuvenation of the wider Castle Piccadilly area.

The garage was built in 1921 as the bus and trolleybus depot for the York Corporation, but closed in 1931. It was then taken over by Airspeed Ltd, founded by well-known York author Nevil Shute, for two years.

The site was then let to Reynard’s of York, founded by Frank Reynard, and most recently housed the Megazone laser game business, but it has been empty for more than a decade and has suffered vandalism.