Firefighters battled a blaze on Wednesday afternoon at the £120m Milburngate development in Durham being built by Tolent.
County Durham & Darlington Fire & Rescue said the blaze broke out in a cavity wall.
Eight crews tackled the blaze which also led to nearby road closures in the city centre throughout the day.
Tolent is delivering the first phase of the mixed-use development where the structural steel frame reached completion in March.
The contractor said the site was safely evacuated.
Andy Mills, 49, a curtain wall installer who had been working on the site told the Sunderland Echo: “All of a suden it just went ‘whoosh’ with massive black clouds of smoke. We were on the third floor, the alarm had been sounded by then so we ran out to get to the muster point.
“It happened so quickly, it was unreal. I’ve never seen anything like it how fast it went up, really fast. We couldn’t breathe when running down the stairs and had to cover our faces. Luckily enough everyone I know got out safely.”
Phase One of the scheme is due for completion in the first quarter of 2022.
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