THE Le Cornu site in North Adelaide is set to be purchased “significantly below its commercial value” by the City of Adelaide.

In the latest development of the long-running Le Cornu saga, the council announced on Wednesday that the O’Connell St property — which has been vacant since 1989 — will be “redeveloped in a timely fashion and in a form appropriate to North Adelaide” once a settlement is reached.

Specific development plans have not yet been disclosed but a settlement is expected to be reached in the first quarter of 2018.

The council says it cannot reveal the purchase price as it needs to retain “commercial confidentiality” until the transaction is completed.

But figures from the property sector based on land value and recent sales show the site is worth between $30-$45 million, without considering its development potential.

Lord Mayor Martin Haese said the council was taking control of the site because of its strategic importance to the future of North Adelaide.

“Today’s announcement is the first step in the council’s ambition to end the uncertainty over the future of this site that has existed for three decades,” Mr Haese said.

“As soon as the contract is finalised, the council will release the purchase price and other financial details publicly.”

A $200m plan to rejuvenate the site was abandoned by the current owners, the Makris Group, earlier this year — prompting the council to take matters into its own hands.

The Makris Group said it had reached a conditional agreement with the council to sell the site for “significantly below its commercial value”.

“Because of a recent opportunity I have made the decision to work collaboratively with the Adelaide Council to utilise the former Le Cornu site for open space and community use and to relieve the extreme parking issues and pressures in North Adelaide.”

“As part of the process, the Adelaide City Council expressed its interest in purchasing the site, and while the price paid is below more recent offers to the Makris Group, I am pleased to be in a position to assist the site’s transfer to the community at a price the Council can afford.”

A previous plan for an Adelaide Sheraton hotel on old Le Cornu site A previous plan for an Adelaide Sheraton hotel on old Le Cornu site

Premier Jay Weatherill said the State Government would contribute $10m towards the development of the site.

“It will create jobs in construction over the development phase, and once complete it will deliver both a cultural and economic boost to North Adelaide,” Mr Weatherill said.

“Through community consultation we will see the site develop in line with what the community wants, after so many years of inactivity.”

The North Adelaide community will be consulted “extensively” about formulating detailed plans, the council said.

The Adelaide City Council’s purchase of the 7535m2 property adds to its $300m portfolio of commericial and retail real estate — which includes the Central Market Arcade.

Daniel Gannon, the SA director of the Property Council of Australian, said the vacant site has defined North Adelaide for too long.

“This site has been a beacon of inaction and community disappointment for the best part of 30 years, and business owners and landlords along this precinct have been punished as a result,” Mr Gannon said.

“Environments such as O’Connell Street face a unique set of challenges, which is why it’s important to get the future composition of this site right.”

“Ultimately that means a mixed-use development comprising retail, hospitality, commercial and residential, which is a no-brainer and the only way to proceed.”

The saga of the former Le Cornu site media_camera An artist impression of the proposed $200 million redevelopment of the old Le Cornu site in North Adelaide. Picture: Makris Group 1 of 13 media_camera An artist impression of the proposed $200 million redevelopment of the old Le Cornu site in North Adelaide. Picture: Makris Group 2 of 13 media_camera An artist impression of the proposed $200 million redevelopment of the old Le Cornu site in North Adelaide. Picture: Makris Group 3 of 13 media_camera An artist impression of the proposed $200 million redevelopment of the old Le Cornu site in North Adelaide. Picture: Makris Group 4 of 13 nav_small_close Want to see more?( 9 more photos in collection )Continue to full gallery nav_small_left nav_small_right

The Makris Group in July abandoned plans for the $200m residential, retail and hotel development on the block.

The group had been granted a one-year extension by the State Government’s Development Assessment Commission in 2016 to refine its design and “streamline construction programming”.

However, The Advertiser understands development plans were abandoned in the past three months, ahead of its June 30 deadline.

At the time, a spokesman for the Makris Group said it was now working on other plans, but he said he was not sure how advanced they were.

“The owner of the 88 O’Connell Street site, Makris Group, is working with consultants to develop a new development plan for its prominent North Adelaide landholding,” he said in a statement.

“The group has withdrawn an application to extend its development approval for a previous proposal as it explores a more viable development solution for the site, which is bounded by O’Connell, Archer, Centenary and Tynte Streets, North Adelaide.”