Council chiefs have welcomed multi-million pound plans to convert a town centre shopping centre and multi-storey car park into new homes – instead of demolishing them.

Developer Capital&Centric's regeneration masterplan for Newcastle-under-Lyme would see both the Midway car park and York Place shopping centre stripped out and turned into dozens of flats, rather than being bulldozed and replaced with new buildings.

Manchester-based Capital&Centric have taken a similar approach to regeneration projects elsewhere, including the Goods Yard development in Stoke.

Cabinet members at Newcastle Borough Council – who supported proposals to pay the developer £2.65 million to draw up more detailed plans – believe it is the right plan for Newcastle.

According to a report to cabinet, retaining and re-engineering the Midway 'not only saves all the embodied carbon in the concrete frame, but also creates both time and cost savings for the development, whilst also creating an architecturally aspirational development'.

The buildings will be stripped and redeveloped, instead of demolished (LDRS).

The Midway would be converted into 106 apartments for young professionals or families, while the work at York Place would see the creation of 47 flats and 17,222sq ft of commercial space.

Councillor Stephen Sweeney, portfolio holder for finance, town centres and growth, welcomed Capital&Centric's approach.

He said: "Part of Capital&Centric's philosophy is not to just flatten things, it's to reuse them. So they're going to take all in the innards out of York Place and leave the frame, and build around that frame. This is an excellent idea.

"One thing we've said from day one is that the days of town centres being lines of shops are gone, mainly thanks to the internet. So I think having a combination of things is a vital to any town centre's future. This is a really exciting scheme to bring people into the town centre – to shop, to go out and to live in the town centre."

Cabinet member Andrew Fear added: "Being nostalgic is not the right way forward. The sort of town centre that was around when I was young has gone. My experience of having lived abroad, in Spain, it was a large town where people lived in the town centre – that was an excellent thing, it created a vibrant town centre, it creates trade. Doing nothing is not an option."

Capital&Centric's plans for the vacant Ryecroft site, where work on a new multi-storey car park started last month, include the construction of 36 houses for Aspire Housing along with 10,000sq ft of commercial space and a 110-room Ibis Styles hotel.

The full council will be asked to approve the £2.65 million spend at a meeting on Wednesday. The funding includes £500,000 for the stripping out of York Place, which will start once the last remaining tenants have moved out.

Most of the money (£2.2 million) will come from Newcastle's Future High Street Fund allocation, with £326,338 coming from Aspire Housing and £136,964 from the borough council..

Council leader Simon Tagg said: "I really welcome this. It's the next step in the regeneraton of our town, using the money that's come in from central government, complementing that with council investment, bringing in a nationally-renowned company to invest in our town. This is something we've been waiting a long time for. We can now move to the next phase and get some concrete plans in place."

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