Cheshire East has agreed to create a business case for ambitious plans to transform Crewe into the 'best small city' in Europe by 2050 with more than 300 new town centre homes.
The council has been in talks with an unnamed developer over 'phase three' of the Royal Arcade development – which could see apartments and town houses as well as commercial use proposed for the town centre.
The scheme could also include building on the car parks on Chester Street and Delamere Street.
Macclesfield councillor Rob Vernon (Lab) told Tuesday's meeting of the economy and growth committee that in-town living is 'one of the most important elements of any strategy to revitalise our town centres'.
"If people live in the town centre, they are in the town centre already, they use town centre businesses already, particularly in hospitality, and you don't have to bring those people in," said Cllr Vernon.
"In-town living provides customers right there for existing and future businesses, attracts new investment into the town centre.
"That creates thriving businesses, that then attracts more people into the town centre.
"It also helps us fulfil our housing targets and tackle the housing crisis, using land that is far more suitable for development, less green belt, less out-of-town development further away from our town centres and, crucially, far more suitable local infrastructure."
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Shavington councillor Linda Buchanan (Lab) said: "I think the phase three is quite exciting to think of the development of much-needed 300 new homes, commercial space for shops and businesses."
She said in-town living was the norm in many European cities and 'what this does is provide an absolutely dynamic centre for the night-time economy'.
Earlier in the meeting the committee had heard from public speakers Simon Yates, representing Crewe Town Board, and Crewe resident David Simcox.
Mr Yates said the board welcomed the proposal 'to breathe life into the town centre'.
He told the meeting: "In-town living has been supported by many of us for some time, however, we should not underestimate the importance of selling the concept to the residents of Crewe and explaining that in-town living of the right quality, and which is authentic to Crewe, will itself generate footfall and encourage the leisure and retail sectors."
Mr Simcox appeared less enthusiastic about the scheme. "Turning Crewe's town centre into a 300-home housing estate is not regeneration, it's surrender," he said.
He added: "I'm not against regeneration, but regeneration has to mean shops, offices and life in the town centre, not just housing dropped on top of a failed car park."
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He asked the committee numerous questions about the proposal.
"The report admits this scheme has a 'significant viability gap' and depends on millions in subsidy from Homes England.
"If that funding fails, will Crewe be left with yet another stalled project?" he asked.
Charles Jarvis, the council's head of economic development, said he would respond in writing to all the questions.
Seven councillors voted in favour of the recommendations, which included to create a business plan, and four Conservatives abstained.
The council-owned former Royal Arcade site, which was originally earmarked for a leisure-led mixed-use development, has remained effectively vacant since the shops were bulldozed in 2021.
Only the multi-storey car park and new bus station – phase one – have been built.
While the longer-term plans progress, the council says it is continuing work to open up the undeveloped part of the Royal Arcade site as a 'meanwhile space', as soon as possible, with new seating, lighting, picnic areas and space for events and activities to take place.