Herefordshire Council will have to pay out more than £200,000 after plans to develop the Bromyard depot site fell through.
The council had granted planning permission for Keepmoat Homes to build 45 houses on the Hereford road site in 2018, despite strong objections from the local community.
But unresolved issues over land ownership and an agricultural tenancy mean the council cannot go ahead with the scheme.
Councillors say legal costs were mounting and council chiefs have decided to withdraw the plans as they are not currently deliverable.
However, this decision by housing, regulatory services, and community safety cabinet member Ange Tyler means Keepmoat will be reimbursed £201,222 for development costs incurred to date.
This is in line with the requirements of the development regeneration partnership overarching agreement the company has with the council.
Councillor Roger Page, who opposed the plans in 2018, said the county council should have listened to the town council’s warning.
“We warned them as a town council and this is what has come to pass,” he said.
“In a detailed application you must have control for all the land in your development and they did not.
“We told them they did not have control of all the land and we were ignored.
“We, as a town council planning committee, took the view that the development would never proceed and we were proven right.
“We told the then leader that this development would not go forward and there would be legal problems to deal with.
“And nobody took any notice of us, even though we put it in our submission.
“Now it’s going to cost more than £200,000.
“I don’t fault the new administration. They have inherited these issues and are having to clear up the mess.”
A Herefordshire Council spokesperson said they will consider other options to develop the former depot.
“We will now be working with key stakeholders in Bromyard to consider alternative options for future development of this site to benefit the local community and help deliver the council’s priorities, as set out in our county plan,” they said.
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