Plans to open an alcohol addiction centre at the former Nazareth House care home in Derry have been abandoned.
Sinn Fein Cllr Patricia Logue has said she has been told the controversial plans have been scrapped.
Oaklee Trinity Housing, homeless support group Depaul Ireland and the Northern Ireland Housing Executive had hoped to develop the 1.65 acre site on Bishop Street.
Oaklee has confirmed it has abandoned the plans which had included social housing and a 24-bed alcohol dependency unit.
It is understood Oaklee intend to continue with its housing plans for the site.
Angry residents had campaigned against the development.
Cllr Logue has welcomed Oaklee’s decision.
She said: “I have been informed by Oaklee Housing Association that after listening to the views of concerned residents expressed at a packed meeting in the Bishop Street Community Centre last month, that it has decided to proceed with its planned development without inclusion of the proposed Alcohol Addiction Unit.
“The original proposal was for a multi-purpose development incorporating the 24 bed Alcohol addiction Unit, Social Housing and accommodation for able-bodied elderly. Oaklee will now proceed with development of the other two while continuing its search for a more appropriate location for the addiction unit.
“I am pleased, as will the residents that Oaklee took on board the concerns expressed about the existence of three other alcohol dependency facilities in close proximity to Nazareth House and local schools.
“I am happy with the commitment to proceed with the much needed social housing aspect of the development in consultation with the local community.”
Cllr Logue concluded: “I will work closely with the Association and the residents as the projects develops.”
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