Published Thursday, 04 September 2014
The decision follows strong opposition of Bishop Street residents to the housing association Oaklee Trinity.
Trinity had planned to turn part of the former home into a 24-bed unit to cater for people with long-term problems of homelessness and alcohol dependency.
Speaking to UTV, Cllr Patricia Logue of Sinn Féin said: "It was never a case of 'not in my backyard', as you know we already have three alcohol and drug addiction units within five minutes walking distance from here.
"Residents outlined very clearly that it was mainly a child protection issue as the proposal was to place it beside the Nazareth House primary school and that just was not acceptable."
Residents' main concern was that the alcohol unit may lead to an upsurge in antisocial behaviour.
Environment Minister Mark H Durkan also spoke to UTV explaining why the location at Nazareth House wasn't the correct choice.
"Not only were there strong feelings and opposition to it, there was also a strong rationale as to why that location wasn't the right one," the SDLP politician said.
"While I welcome Oaklee's decision not to pursue this project at this stage, I do think this demonstrates clearly the meaningful and early consultation with communities for projects like this and indeed any type of bi-statutory agencies."
The housing association may have confirmed that it will not go ahead with its plans for the unit, however it does still intend to buy the former care home and use it for other social housing provision.
The group said it has not given up on creating an alcohol dependency unit for the city.
It believes there is a real pressing need for such a facility and said it is trying to find an alternative site to pursue the project.
© UTV News