But Andy MacLeod, who represents Farnham Moor Park on Wavereley Borough Council and is the authority’s portfolio holder for Brightwells, is putting a brave face on the news.
Cllr MacLeod said the commercial element of Brightwells is now well advanced “and will be completed around the end of the first quarter of next year”.
He added: “The final completion of the whole scheme is later in that year or early in 2024.
“However, Farnham is a very popular place to live with a high demand for housing and the town has recovered remarkably well from the pandemic as a retail, hospitality and business centre.
“This, together with the improvements we expect to see in the town arising from the Farnham Infrastructure Programme, should give the Brightwells scheme every chance of success.”
With no anchor tenant, it is thought developer Crest Nicholson’s preferred option is to now split the 18,000 sq ft premises – which was purpose-built for M&S – into three separate units.
Crest believes M&S’ decision will have no material effect on the development.
Work is continuing to attract ‘high-quality’ tenants to Brightwells Yard.
Cllr MacLeod said: “The M&S decision is disappointing, and it has to be acknowledged it is a setback for the Brightwells scheme.
“However, the Waverley executive remains committed to doing all we can to support Crest Nicholson and Surrey County Council – as the investor in the commercial aspects of the scheme – to secure high-quality tenants and make the scheme as successful as possible.
“This position on Brightwells was agreed by the Waverley executive in 2019, following the change of administration resulting from the local elections.
“Whatever doubts any of us had about the scheme were not relevant, as by 2019 the development was well beyond the point where it could be cancelled or even significantly changed. This is even more the case today as the building of the scheme is now well advanced.
“The scheme is very important to Waverley in terms of the economic activity and employment which will be created by the largest development in Farnham as the borough’s largest town.
“It has revenue implications for Waverley in terms of council tax receipts, a proportion of the commercial rents generated, the small share of business rates allowed by the government and car parking revenue.
“The development was initiated in 2002 through a competitive tender process which was won by Crest Nicholson.
“Over the next seven years there were several changes of direction on the scheme and in 2009 Crest obtained full planning permission for what is essentially the current scheme.
“This was controversial as it bore little resemblance to the 2002 development brief for the tender process.
“Planning permission was later renewed in 2012 and subsequently altered by applications to make a number of alterations and variations to the original permitted scheme.
“By 2019 the previous Waverley administration had assembled the land for the scheme by buying land they did not already own and compulsorily purchasing the Marlborough Head pub. They had also made a development agreement to give Crest permission to develop the scheme on Waverley’s land.
“This agreement required Crest to make some payments to Waverley, but the land value payment in particular was much lower than had been envisaged at the time of the tender process. Crest had also implemented their planning permission by making a start to the scheme.
“Crest is funding the building of the scheme and is responsible for selling the 239 flats and for finding tenants for the commercial parts of the scheme, which are the 25 retail units, the eight restaurants and cafés and the six-screen cinema.
“By 2019 Surrey County Council had made an agreement with Crest to purchase the commercial parts of the scheme from Crest as an investment, when the scheme is complete.
“Waverley is not a party to the agreement between Crest and Surrey CC and has no direct involvement in the issue of finding tenants for the commercial parts of the scheme.
“The negotiations and terms and conditions with potential tenants are commercially confidential and a matter for Crest and their agreement with Surrey CC.
“Waverley is nevertheless very willing to help where we can as the landowner and the planning and licensing authority by taking a positive attitude towards any requests or applications for changes to the scheme necessary to support Crest in securing tenants.”