Leith Depot is threatened with demolition. Picture: Greg Macvean

But now the only dedicated live music venue in the Leith area is set to be demolished to make way for a student housing and hotel development.

Leith Depot, which hosts gigs almost every night of the week, is one of several businesses expected to be affected by a multi-million-pound development project.

The Drum Property Group, the firm behind the scheme, which former Hibernian FC managing director Fife Hyland is a director of, had lodged early plans with the council which it says will “revitalise an important part of the city”.

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Peter Mason from Leith Depot

A huge swathe of land at Stead’s Place, including Leith Depot, was snapped up last year by the Drum Property Group, which wants to replace existing buildings with a “mixed-use development”.

Leith Depot, which also operates as a bar and restaurant, opened less than three years ago on the site of a bar which had the worst record for police call-outs in the city, but has become one of its most thriving live music venues.

The Drum Property Group is set to snap up an another artists’ hub, St Margaret’s House, in the Meadowbank area, also for student housing.

It says that the Leith Walk development will create “a mix of affordable housing, innovative post-graduate student accommodation, hotel facilities for visitors to the city, and space for the benefit of local retailers and the community”.

Peter Mason from Leith Depot

It plans to join forces to with Edinburgh University to create the student accommodation, which it says will also “incorporate a hotel, restaurant and café”.

A statement from Leith Depot said: “We are aware of the planning application notice that has been published for the block that we are other businesses are located in.

“Our lease will come to an end in 2019 and we’re now speaking to our landlord to figure our what options are available to us.”

But the developer insists units facing onto Leith Walk will be available for local businesses and community groups, with existing tenants, who include Punjabi Junction, the Leith Walk Cafe and The Bed Shop, offered the chance to return after two years.

Managing director Graeme Bone said: “Our vision is to provide welcoming, inspirational and distinctive spaces for use by local residents, post-graduate students and the wider public.

“Developing purpose-built affordable housing, retail units, a hotel and post-graduate accommodation on this conveniently located site will help alleviate housing pressures in the area and provide a boost for inward investment in Leith that will help sustain community facilities and create additional opportunities for local business, maximising the potential for additional future investment in the area.

“We are keen for both local organisations and current tenants along the frontage to Leith Walk to contribute as we develop our plans.

“We look forward to working with the city council and local community groups as we work towards preparing a detailed planning application for the site.”

Morvern Cunningham, co-founder of the Leith Creative network, said: “This site is already a welcoming, inspirational and distinctive space housing a number of important community assets.”

Leith councillor Gordon Munro added: “Once again we see money taking precedence over place in Leith. A good venue and a good social enterprise will have to start all over again.

“Students are welcome in Leith but surely we can design better places for them to live in than these off the shelf- designed rabbit hutches.”

Plans for the new development have been lodged months after a Scottish Government-backed report on Leith revealed growing discontent about the local businesses and residents being priced out of living and working in the area.

Among the concerns were the impact of recent student housing developments, “ill-conceived and badly executed” developments, and soaring property prices.