Cheshire West and Chester Council and Thwaites have come to a mutual decision to end their partnership arrangement to restore Dee House.
The Council entered into a Conditional Development Agreement with Thwaites in September 2016 to explore a proposal to convert the building into a new hotel.
Thwaites chief executive officer Rick Bailey said: “We are very disappointed that we can’t proceed with this development, as Dee House is a fantastic location with great potential.
“We have worked very hard, alongside the Council, to find a way of bringing our plans to life. However even just securing safe access to the building has proved to be far more expensive and challenging than anyone ever anticipated.
“We have looked into every option available but unfortunately we have been unable to find a workable solution that is financially viable.
“After an enormous amount of consideration and discussion, we have made the difficult decision not to proceed at this time. We have spoken at length with the Council and believe allowing them to take back the lead in the project is now the best way forward.
“We are definitely not closing the door completely but for the moment there are too many unknowns for us to be able to take it forward.”
Dee House is an important building which forms an integral part of Chester’s history. The Council remains committed to finding a long term solution for the site.
Councillor Louise Gittins, Cabinet Member for Communities and Wellbeing, said: “Finding a solution for Dee House was never going to be easy. We are disappointed that our plans to implement a private-sector led scheme have not been able to progress. However, through the extensive work undertaken by Thwaites, we have accumulated significant knowledge which will be invaluable in informing future decisions about the site.
“We believe it is now important to take stock of this new intelligence within the context of the wider city and the findings of the Roman Amphitheatre Chester Report Volume 1 published late last year.
“It is our intention to work in partnership with Chester Growth Partnership who will establish a dedicated stakeholder group of interested parties given the importance of the Dee House site.
“We look forward to working with Chester Growth Partnership and as the review progresses we will share the findings with the wider community and will consult on the future options which emerge.”
Peter Carstensen, chair of Chester Growth Partnership, said: “Dee House is a key project within the One City Plan and we are delighted to have the opportunity to bring together stakeholders to review options and help find a way forward.
“We welcome the opportunity to work with the Council in looking at future options for the site and are keen to maintain momentum on the project. Our group will bring together significant key stakeholder knowledge and expertise. We will be inviting both Civic Trust and Chester Archaeological Society to participate.”