BHS received more than £5m to allow Primark to take its place in Carlisle city centre.
Carlisle City Council gave almost a quarter of the amount as an “investment in the city”.
The council has a 23.66% share in Carlisle Shopping Centre, which owns the Lanes site where BHS was located.
Council leader Colin Glover said its share totalled £1.4m, and the rest had come from property firm F&C Reit, which was keen to secure Primark as a tenant in the city to attract other retailers.
“Primark are prepared to pay a significantly higher rent than BHS, and will also help fill up other units, driving revenue for the city,” said Glover.
“The annual rent we would get from BHS, our share, was £49,695. From Primark it will be £177,481. That’s an extra £127,000 a year. That’s the point – it’s an investment. It’s not dead money.”
He added: “We didn’t pay BHS direct – this company did. Our contribution was £1,397,128, but it was part of a much bigger deal.”
He told Drapers that the money was paid to BHS’s parent company on February 8.
BHS closed its store in the city on January 9 with the loss of 50 jobs and Primark is set to open in the autumn, creating 144 roles.