The company behind a proposed quayside development have decided to give up on the scheme after losing a five-year battle with planners over the demolition of a registered building.

Kelman, owner of the former Newson Trading Co. shop and warehouse on North Quay, Douglas, said it is to sell the buildings - and would no longer invest in the island unless planning laws are changed.

In a statement: ‘It’s such a shame - this development could have brought so much to the North Quay and the city of Douglas.

‘In addition to the £8m construction opportunity, we wanted to create as pleasant retail, commercial and residential environment for the city.

‘Our proposed plan appeared to be exactly what the people of Douglas wanted, as we had more than 500 residents write to us, supporting our project.

‘It also appeared to fit the Island Economic Strategy but the planning legislation, as it stands, is unable to deliver the government’s vision.

‘And so, after five years of trying and a great deal of expense, we’ve decided to give up and sell the properties.

‘Unless or until the planning legislation is changed to facilitate investment, we can no longer invest in the island.’

Plans for the £8m development known as Merchant’s Place were submitted by Kelman Ltd in February 2022 (22/00149/GB).

The proposals involved the demolition of six buildings including an historic warehouse with 10 flats and three bar and restaurant units built in their place.

Planning consent for the redevelopment was refused in September 2022 and the decision confirmed after Kelman’s appeal was dismissed in January this year.

Recommending refusal, the planning officer said demolition of the registered Newson building at 27-28 North Quay was ‘unacceptable as the applicant had not demonstrated that all reasonable efforts had been made to preserve the building not provided sufficient justification for its total loss’.

In 2021, Kelman applied for a demolition order, citing an immediate risk of collapse.

But the government’s structural engineer, who advised the planning committee, said that the warehouse was ‘a 100% robust building’ and ‘capable of being repurposed’.

A repairs notice was issued ordering Kelman to carry out works to make the building safe, secure and to prevent rain getting in. An appeal against the notice was subsequently withdrawn but the required works were never carried out.