UP to 1,000 jobs could be created by a new retail development planned for Sunderland city centre.
Development firm Ashall Property Ltd has drawn up detailed proposals for the so-called Holmeside Triangle area, which would include a supermarket.
The firm claims, however, that the scheme could fail if a rival food store development goes ahead.
Developing Holmeside is seen as key to regenerating the city centre.
Previous plans – which included what would have been the North East’s highest building, the Spirit of Sunderland tower – were hit by the economic downturn.
Now Ashall is in discussions with land owners One North East (One) and the Homes and Communities Agency (HCA) to bring forward proposals.
Ashall director Colin Thomasson said: “Holmeside is recognised as a key regeneration site and is a strategic site within the (council’s) local development framework.
“Our proposals include a large-format food store in addition to a number of comparison goods retail units and leisure facilities.
“We are in detailed discussions with a specific food store operator, although for commercial reasons we do not wish to disclose the name of that operator.”
One’s head of capital programmes Neil Graham said: “One North East and the HCA are in discussions with Ashall over the sale of the Holmeside site.
“It has always been the intention to create a retail-led development as part of the long-term regeneration of Sunderland city centre.
Ashall’s initial proposal is in line with the planning framework.”
The Ashall plans come after the collapse of a £180million scheme to create a landmark retail site at Holmeside.
The now-defunct regeneration agency Sunderland arc had signed a deal with developer Thornfield, with work due to be complete by 2015.
But the scheme was thrown into doubt after one of the firms involved went into administration. Sunderland City Council chief executive David Smith admitted in October that the development was “off the cards”.
HCA head of area Anne Mulroy said: “Ashall has approached us about the Holmeside Triangle site and we have started initial discussions.
“As a public body we have a duty to consider every option for redevelopment of the site with the aim of securing the best possible solution for the people of Sunderland.”
The Ashall proposals came to light when the company objected to a planning application for a new Sainsbury’s store in Castletown.
Mr Thomasson has written to planners claiming the proposed store – which would be built on the existing Jennings car dealership in Riverside Road – would scupper plans for Holmeside.
He said the potential food store operator for Holmeside has stated it would pull out of discussions if the Sainsbury’s development went ahead in Castletown.
Mr Thomasson said: “If they were to do so, and bearing in mind the food store represents 50 per cent of the gross developable space, the proposed scheme would be unviable.”
Consultants for the Sainsbury’s team, which is being pushed ahead by developers Terrace Hill, had previously said Holmeside would be unsuitable for a supermarket development.
Mr Thomasson said his team’s research disputed this.