Tesco and Mansfield District Council have reached an agreement in principle over the collapsed Walkden Street car park.
The council is set to pay more than £10 million to get out of its rental agreement for the car park. It currently pays the supermarket giant, which owns it, nearly £350,000 each year.
The two organisations have been involved in legal discussions over the future of the property since October last year, two months after the top floor of the building collapsed.
At the time, the car park had already been closed for more than a year due to dangerous structural defects identified within it.
The council had set aside £2.5 million to repair it in 2023 but never spent the money before it caved in on itself on 30 August 2025.
After the collapse, the authority decided to scrap the repair plan and demolish the entire structure instead.
That was until Tesco launched legal action in October, and the dispute has been ongoing ever since.
Council documents show that the two parties have agreed to a settlement to release the authority from its lease.
The council entered into the 99-year agreement in 1975, meaning it is now 51 years into the lease and has 48 years remaining.
Calculations showed that it would have about £16 million left to pay over the remaining term, with the current annual rent standing at £338,000.
This means the £10 million upfront payment would be around a third less than the total amount it would end up paying by 2075 if the current agreement continued.
However, the council does not have £10 million available to pay such a large sum in one go, meaning it will have to borrow an additional £7.5 million to fund the settlement.
The £2.5 million previously earmarked for repairs will make up the remaining portion of the £10 million.
In addition, the council has also agreed to pay around £500,000 for the demolition of the building.
The documents note that negotiations with Tesco are still ongoing but state: “Surrender of the lease will also release the council from all past, present and future liabilities related to the lease and will constitute full and final settlement of Tesco’s legal action against the Council under the lease.”
The authority will also incur additional costs of around £150,000 for security measures, specialist advice and payment of the remainder of this year’s rent.
The proposed agreement will be presented by Mansfield’s Labour Executive Mayor, Andy Abrahams, to the full 37 councillors who make up the district council at a meeting on Tuesday, 30 June.
By Joseph Connolly, Local Democracy Reporter