The 35,000 sq ft area is located in Alexandria town centre and is included in plans to regenerate the area.
A preferred developer was selected in February 2014 with proposals to build new housing and retail units.
The bid was dependent on securing a supermarket operator for a 35,000 sq ft food store on the site.
However, due to a downturn in the grocery food retail sector, the developer was unable to deliver.
The council are now seeking another development firm to take the site forward, with plans drawn up for a smaller 17,000 sq ft food store.
-- Advertisement --
Partial demolition is being undertaken which will improve the appearance of the site and prepare the area for future development.
The council recently invested over £700,000 in improvement works at the south end of Mitchell Way.
Although the area is not included in the development area, the project removed dated canopies from shop units, installed new shopfronts, signage and lighting.
Public art was also developed in partnership with pupils from St Mary's Primary School.
A council committee will be asked to approve the demolition of vacant properties in Mitchell Way when it meets later this month.
Richard Cairns, Executive Director of Infrastructure and Regeneration said: "We are confident that we can and will attract developers interested in taking this project forward.
"Development is already underway in Alexandria with a local housing association beginning work on a new residential development and the Council set to begin demolition at Mitchel Way.
"We await the committee's decision on Mitchell Way and if granted approval will start work on marketing the site immediately with the aim of selecting a developer early next year."
(LM/MH)
