Negotiations over the future of Plymouth’s disused airport site are still ongoing more than a year after Plymouth City Council gave the leaseholder, Sutton Harbour Group Plc (SHG), “one last chance” before taking legal action to reclaim the land. The council has denied claims that the dispute has moved to a tribunal and insists that negotiations are continuing.

In February of last year, Plymouth City Council stated that SHG’s subsidiary, Plymouth City Airport Ltd (PCAL), was in breach of the lease covenants for the former Plymouth City Airport site. The council claimed that SHG failed to reassure them it would comply with the lease terms, prompting them to serve a formal legal notice. The notice gave PCAL a year to prove it was not in breach of the lease. This notice expired last month.

Despite rumors that the dispute had moved to arbitration, the council spokesperson confirmed that they are still negotiating with SHG, disputing the claims of arbitration. SHG, on the other hand, denied that it had breached the lease and has expressed plans to build houses on the 113-acre site. SHG revealed a triple-phase development plan last year that would not disrupt the runway until the final phase, which would be after a five-year safeguard period. The company also submitted a pre-application masterplan to the council, proposing a mix of housing and other uses for the site. In September, SHG stated that it had established a process with the council for the “evaluation and realization of the next phase of development,” which would still allow for future aviation operations.

However, SHG is facing financial challenges. The company has been told to pay off £8.69 million it owes to National Westminster Bank Plc. The company must pay £1.5 million by March 20 and the remaining £7.19 million by March 31. SHG, which reported a half-year loss of nearly £1 million in December 2024, was instructed last year to reduce its bank debt by £10 million by March 2025. In response, SHG launched a “debt reduction plan,” which involved selling assets like King Point Marina at Millbay.

SHG has already made loan repayments totaling £1.445 million, bringing its total bank debt down to £20.255 million. These repayments were made possible through the sale of three investment properties, which yielded 94 percent of their latest valuation before selling costs. Despite these efforts, SHG continues to struggle with high interest rates, legal costs related to its court battles with the Environment Agency and Plymouth City Council, and losses from a large block of flats built at Sutton Harbour. These challenges have led the company to refinance with NatWest Bank.

SHG’s debt reduction plan is tied to the loan agreement with NatWest, which is in place until the end of 2026. The bank has set debt reduction milestones that SHG must meet, including selling six more properties in addition to King Point Marina. In December, SHG indicated that it had received “good interest” in all the assets it had put on sale, including King Point Marina, which houses the popular Dock restaurant. SHG’s goal is to sell all identified assets before the financial year ends.

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