Manchester City Council has pulled out of buying Capital & Regional’s Great Northern Warehouse for around £75m.
The council, run by chief executive Sir Howard Bernstein, had been interested in buying the 400,000 sq ft leisure facility to enhance its nearby conference facilities.
But the council today said the deal had fallen through because it had not been able to reach an agreement with the cinema operator in the building, AMC.
A council spokesman said: ‘We confirm we have withdrawn from negotiations to acquire this building.
‘While we agreed terms from building owners who we wish to thank for the support they provided us, we could not engage the cinema operator on any sensible basis.
‘We will now pursue other options for enhancing our conference and exhibition facilities.’
It is the second time in the last four months that a deal to sell the building has fallen through.
In November last year Chester Properties walked away from buying the property because of difficulties with securing debt.