The Jesmond Dene nurseries site is to be turned into a complex of retirement flats and “executive” family homes, with the plans also enabling Jesmond Dene House to add a spa facility and another 30 hotel rooms.

The site, currently owned by Newcastle City Council, is being sold to PegasusLife which says it will build a mix of 91 “later living” apartments plus, with joint venture partners, 18 executive family homes.

However, not everyone is happy with the council choosing PegasusLife as its preferred bidder. JesmondLocal has been contacted by someone familiar with the negotiations who claims that the council rejected two higher bids of £13m and £12m before choosing the £9m bid from PegasusLife as the winner.

The council says it cannot confirm or deny the bid amounts, nor the identity of the bidders as these details are “commercially sensitive” while the final contract with PegasusLife is being drawn up – something that could take weeks or months to complete.

A Newcastle City Council spokesperson said: “Jesmond Dene Nurseries land sale followed a traditional tender process which involved sealed bids, allowing sufficient time for all interested parties to undertake the necessary due diligence.

“In terms of bids received, this is commercially sensitive information as negotiations are ongoing and subject to contract. Therefore we are unable to comment at this time.

“When disposing of land or property, the council is duty-bound under section 123 of the Local Government Act 1972 to obtain best consideration which can reasonably be obtained in all circumstances to meet planning requirements.

“There is no formal appeals procedure as part of this process. However all parties have been offered feedback. Not all parties took up that offer.”

Artist’s impression of the “later living” complex by FaulknerBrowns Architects, who will deliver the project

The 6.7 acre site was originally planned to be marketed for sale via an online auction. However, the council says this was changed to the more traditional method of informal tender (sealed bids) to give interested parties more time to undertake the necessary due diligence.

PegasusLife, whose financial director, Ian Trindor, grew up in Jesmond, is also proposing to build 60 apartments on Eskdale Terrace on a 0.75 site previously used by Newcastle High School for Girls.

Henry Gallagher, Liberal Democrat councillor for East Gosforth, has opposed the sale of the site to property developers since the idea was first mooted two years ago and says the council should now put some of the sale proceeds back into the city’s parks. “My view is that the site should have continued with a green theme and could perhaps have become allotments,” he told JesmondLocal.

“When the council decided to build on South Gosforth Green I suggested that although I am against selling-off the nursery site, the council could have stipulated to any bidders that the assisted living bungalows destined for South Gosforth should be built at Jesmond Dene. Now they are selling it, we believe 10% of the money should go into a fund to pay for the upkeep of local parks and green spaces.”