Birmingham City Council is to pay for the reclamation of a 20-acre slice of the city’s Smithfield site as talks with preferred developer Lendlease drag on.

The deal with Lendlease was originally slated for approval during June 2020, but the award of the contract has now been pushed back to winter 2020/21.

Lendlease was chosen as preferred developer for the former wholesale markets site in December 2018. Its plans for the 41-acre site include 2,000 new homes around a rethought market district.

“The City Council is working collaboratively with Lendlease Europe to produce a robust business plan and HM Treasury Green Book-compliant outline business case for the development; and to finalise the joint venture agreement (JVA) and associated contracts,” a report to councillors said.

The same report recommends approvals of council spending, and new borrowing, to pay for demolition of the car parks, office building, relocation of staff and services, and for site investigation and surveys.

Starting the works now will “mitigate the operational costs of maintaining and making secure the buildings” ahead of the slow-moving deal, and “mitigate the change to the Smithfield Development delivery programme”.

The site will also become available to host beach volleyball and basketball as part of the 2022 Commonwealth Games.

The works include the demolition of the Manor House office building and the Markets and Pershore Street car parks.

Bisnow revealed in May 2020 that the council expected to make a “compulsory purchase order… for the acquisition of land, property and other interests at the Birmingham Smithfield site for the purpose of securing vacant possession of the site to facilitate a major city centre regeneration project in accordance with the Smithfield Masterplan".