A £17m bid to create a major retail, leisure and innovative tech hub in North Yorkshire has hit a significant setback.

Work is underway to reinvent the 230-year-old Northallerton Prison into a digital hub along with retail stores and leisure facilities, but the principal contractors can no longer fulfil their obligations on the site.

York Press:

An artist's impression of the Treadmills scheme in Northallerton.

The news has been revealed by the Central Northallerton Development Company Ltd (CNDCL) - a joint venture between Hambleton District Council and Wykeland.

Work first started on the £17m Treadmills scheme in September 2019 to convert the town’s former Victorian prison site.

Some aspects of the site are ready but the much-anticipated boutique cinema will now be delayed until new contractors can be found.

The former prison will become home to retail stores and the C4DI (Centre for Digital Innovation) Northallerton tech hub within remodelled Grade II-listed former prison buildings, and an eCampus.

The project is a collaboration between Hambleton District Council and developers Wykeland after the local authority acquired the site from the Ministry of Justice in 2015 as part of regeneration plans for the town and area.

In 2017, it was transferred to CNDCL, with construction work starting in 2019 with the creation of two new food stores.

The planned leisure phase is due to include a cinema, three restaurants, the conversion of the former Governor’s House and a civic square.

CNDCL said today: “We have been notified that PDR Construction, the principal contractors for the final phase of the Treadmills scheme, can no longer fulfil their obligations under the construction contract.

“Urgent and positive discussions have taken place between the development partners, Hambleton District Council and Wykeland Group, to address this unexpected situation.

“We remain totally committed to delivering this important regeneration project in full and we are putting in place a process to appoint a new contractor to complete the works.

“This will inevitably involve some delay to the delivery programme, but we will do whatever we can to mitigate the impact of this interruption to construction. We will keep the community up to date on the progress made.”

Hambleton council leader Cllr Mark Robson said the news was 'disappointing' but efforts were being made to try and quickly appoint a new contractor.

“Obviously this sort of thing isn’t something that you can deal with overnight so there will be some weeks delay on getting workers back on site.

“Ultimately, as an authority, we are more than committed to deliver on site but people may notice over the next four to six weeks there will be very little activity on site.

“Whatever happens, it is our commitment at Hambleton District Council to deliver the third phase as we always said we would, to deliver that Everyman cinema.”

Wykeland Group and Hambleton District Council won the Public-Private Collaboration of the Year award in the Insider Yorkshire Property Industry Awards 2021for the redevelopment of the derelict prison.

Treadmills is supported by the York & North Yorkshire Local Enterprise Partnership, which secured £1.8m from the Government’s Local Growth Fund and £675,00 from the Government’s Getting Building Fund.

The final phase is being part-funded with £4.75m from the Future High Street Fund.