CONSTRUCTION work is under way for a multi-million pound new factory for one of York's longest established engineering businesses.

Excavation and groundworks have started at Clifton Moor for Dowding and Mills Engineering Services, formerly Bootham Engineers, which is relocating from its premises at Melrose Works, Hull Road.

In a scheme backed by City of York planners, Severfield-Reeve Projects, of Thirsk, North Yorkshire, is responsible for providing the complete operational 78,000 sq ft factory, including transferring and installing all the existing machinery, presses and overhead cranes.

The idea for the all-in scheme came from Martin Foster, of commercial surveyors FPD Savills, of York, who realised that Dowding and Mills had outgrown its existing factory and needed purpose-built premises on Severfield-Reeve Projects' six-acre development site at Clifton Moor.

Within the Severfield-Reeve deal, Dowding and Mills' Melrose Works site is being sold to Wainhomes (Yorkshire) Ltd for residential redevelopment.

The relocation of Dowding and Mills is one of the biggest and most complex developments handled by Severfield-Reeve Projects, a subsidiary of Severfield-Rowan plc, in its 16-year history.

Dowding and Mills, which was established in York in 1932 on Bootham Row, is scheduled to move into the new premises early next year.

Lindsay Ross, managing director of Severfield-Reeve Projects, said: "Several other parties had previously approached Dowding and Mills with offers to buy its site for redevelopment. Our proposal package linking the site purchase with a new factory, all within a seamless, no-cash, single-source deal, created the opportunity for Dowd- ing and Mills to accept our offer.

"It took away the potentially complex situation and risk associated with an apparently straightforward sale of the site, which would have left Dowding and Mills with a major challenge of finding a new site and premises.

He added: "We are delighted to have started work on site and look forward to completing a project which will enhance Clifton Moor as a commercial base and free up an inner-city brownfield site for homes."

Dowding and Mills UK regional managing director, Derrick Arden, said: "We are delighted that following the lengthy negotiations necessary to bring this project to life, there has been a positive outcome and work has started on site.

"We look forward to moving into the new facility, which will enable us to progress our stated intention to provide our customers with the very best in terms of quality, capability and levels of service.

Dowding and Mills Engineering Services has been based at its existing 50,000sq ft premises since 1975.

The company carries out specialist engineering repairs and re-engineering of mechanical parts for the process and heavy industries in Europe.