Council hopes that a 12,500 seat arena would lead to the

regeneration of the town centre have been dashed.

In a decision announced this morning communities secretary

Hazel Blears has rejected the council-backed Arrowcroft arena,

homes and offices scheme planned for the Gateway site at East

Croydon.

The Secretary of State says that while she sees “merit” in

an arena helping regeneration, she agrees with the inspector

who conducted last year's public inquiry that there were severe

doubts about the viability of the scheme.

Ms Blears also accepts the inspector's arguments for

rejection based on grounds of traffic congestion on the

surrounding roads.

Arrowcroft have a right of appeal against the ruling in the

High Court.

In addition to the arena, the Arrowcroft proposals included

nearly 900 flats, 60,000 sq metres of offices, a superstore

plus other shops, restaurants and cafes.

In her report accepted by Hazel Blears, planning inspector

Ava Wood says: “The arena-led development would provide a

strong basis for regenerating the Croydon Metropolitan

Centre.

“The diverse mix of uses proposed, in particular, the arena,

would help re-brand Croydon as an interesting place to visit,

in contrast to its current stale, tired image. The potential

benefits of the developments are substantial.”

But she adds: “However with doubts about its financial

soundness, I cannot be even reasonably assured that the arena

would be delivered and without that component of the scheme,

its transforming potentials would not be achieved.”

Mrs Wood said there were concerns about the funding gap for

the arena which needed a £12m cross subsidy from the commercial

and housing elements of the development plus a £25m loan from

Arrowcroft.

She said: “The economic soundness of the development and its

ability to support construction has not been unequivocally

demonstrated.

“There are too many unknowns and variables to conclude with

reasonable certainty that the arena can be delivered within the

funding structure proposed.”

The news was immediately welcomed by the Warehouse Theatre,

which now hopes it can go ahead with a £5m arts development on

the site as part of the rival Stanhope scheme, which is now

almost certain to go ahead.

Artistic director Ted Craig said: "I have worked for over 15

years to get to this stage. I am absolutely delighted.

"This is a fantastic result for the Arts in Croydon. I would

like to thank everyone for supporting the Warehouse over so

many very difficult years"

Brenda Kirby, chair of the board of management, added: "I am

absolutely delighted. This has been a long time coming. Finally

we have a secure future in a stuning building that will be an

opportunity for Croydon to show its unique and interesting

side"

Timothy Godfrey, secretary of the board of management, said

"We have now secured that future (of the Warehouse) and it is

now time to take the theatre to the next stage of its life and

grow its audience, reputation and its education work. It is a

truly exciting future we look to."