Plans to transform a historic Lancaster church into a hub for local businesses and events have been scrapped.
Lancaster and Morecambe Chamber of Commerce said they are "disappointed" that their plans at St John's Church in the city centre will now not be going ahead.
The Chamber at St John’s project would have seen the church on North Road revamped to create dedicated offices, open plan dedicated desks, co-working desks, meeting spaces, an event space and a café open to the public, as well as landscaped gardens.
The idea was for the repurposed church to be leased to Lancaster and Morecambe Chamber of Commerce to help them grow a "networked community of entrepreneurs to help Lancaster prosper".
The Chamber also wanted the church to be open to the public for concerts, talks, community events and heritage open days in the evenings and at weekends.
But the Chamber announced on Wednesday that the project "is not proceeding".
They said the Churches Conservation Trust (CCT) have taken the decision to not progress to the second stage of National Lottery Heritage Funding (NLHF).
A Chamber spokesperson said "the scheme has been developed in great detail by the Chamber and CCT, and as a Chamber we were excited and confident in the resilient and sustainable business plan we had to run the site as a business and co-working hub, events space and public café for members and the local community.
"Unfortunately, the CCT have decided to take a step back and reconsider the best way forward for St John’s."
Greg Pickup, CEO of the Churches Conservation Trust, said: “The CCT has reassessed our approach to risk in large projects and our experience in undertaking them.
"Whilst CCT are committed to a sustainable future for the site, we wish to do so in a way that better manages the risks involved for all parties.
"The decision also comes of the back of the enormous success of the recent Historic England funded summer school project which has gone a long way towards securing the condition of the building and was a direct outcome of the team’s work in developing the project.”
Chris Gardner, chair of Lancaster and Morecambe Chamber of Commerce, said “We are hugely disappointed with this news. After working closely with the CCT team, the architects and a team of expert professionals, we were absolutely convinced and committed to the successful and transformational project for St John’s Church and our Chamber.
"Without the NLHF funding to transform the space into an exceptional space to visit, work from and attend events, we don’t see how the Chamber could make this work for our members and the local community”.
Read more: Views wanted on plans to transform Lancaster church into hub for city businesses - Beyond Radio
In 2022, the CCT was awarded a grant of £393,507 to work with the Chamber on the development phase of the planned co-working space in St John's, which was declared redundant as a place of worship in 1983.
Read more: Lancaster businesses and heritage charity join forces to regenerate historic church - Beyond Radio
The Grade II* listed 18th century church, which is on the Heritage at Risk Register, was flooded during Storm Desmond in 2015, which caused outbreaks of wet and dry rot.
In 2023, the CCT was awarded £496,000 by Historic England to carry out urgent repairs at the church, whilst providing training for a new generation of heritage craftspeople.
A Heritage Building Skills Summer School was then held at St John's in 2024, where 21 trainee craftspeople helped with emergency repairs to the roof and other parts of the church.
Read more: 500k funding will pave way for urgent Lancaster church repairs and training programme - Beyond Radio
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