Tesco is in talks to sell a 16-acre former brewery site after hitting a legal barrier.

The supermarket behemoth is in formal talks to sell the site to Sunderland Arc, a private company pushing forward government plans to regenerate the area.

Earlier this month it was announced that Tesco had launched a legal challenge against Sunderland City Council’s Unitary Development Plan which bans building a supermarket on the site.

Tesco had been planning a 100,000 sq ft supermarket led scheme that included 300,000 sq ft of offices and 350 homes.

The Secretary of State has approved Sunderland arc’s proposals for a mixed-use development at the site of 1,000 new homes, 506,000 sq ft of offices, two new hotels and civic buildings.

‘We have felt the frustration of others to see the Vaux site developed,’ said Sunderland arc chief executive David Walker. ‘The arc and our partners in the city are keen to see a quality supermarket in Sunderland but don’t believe that Vaux is the right site.’

‘We hope we can still encourage Tesco to invest in the city on a more appropriate location.’

If negotiations between Sunderland arc and Tesco fail, One Northeast, Sunderland arc’s partner along with English Partnerships and Sunderland City Council, has the statutory power to issue a compulsory purchase order to acquire the former Vaux Brewery Site.

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