The previous owners of a Northampton pub - who sold the venue to be used as a supermarket - will help towards a new "local facility" in Rectory Farm.
Two years since Hawthorn Leisure announced plans to sell the Barn Owl pub in Olden Road to supermarket developers, the former owners have finally reached an agreement to compensate the community.
More than 550 people wrote a letter of objection to the plan when campaigners discovered the site was protected for community use by a 1980s covenant.
It led Northampton Borough Council to launch legal action against Hawthorn Leisure for removing the site's legal protection as a community building.
Hawthorn has now agreed to make a "substantial contribution" towards a "local facility" for the residents of Rectory Farm, in settlement for the release of the covenant.
Councillor Tim Hadland, the council's cabinet member for regeneration, enterprise and planning, said: “This is a good result as it will mean that we can start looking at what alternative community provision might be made in that area.
“We’re pleased that both the Council and Hawthorn Leisure were able to resolve this matter amicably, rather than going through a potentially very costly legal exercise, enabling more cash to be put into the community instead of being spent on expensive legal costs.”
A spokesperson for Hawthorn Leisure said: “We’re very pleased to have been able to reach a good resolution to the dispute, especially since our financial contribution will be of benefit to local residents for years to come.
“It was always our wish to see the local residents benefit from the continuing use of a community facility following closure of the pub.”