Concerns voiced that selling unfinished Hilton Garden Inn could mean £10 million loss to council

The alarm has been raised ahead of today’s key meeting of the Peterborough City Council’s ruling cabinet that could pave the way for the sale of the building, where no construction work has taken place for two years.

Members of the Labour-led coalition are being advised to agree that the nine storey building at Fletton Quays should be marketed and sold to achieve best value for the local authority.

But it is understood that councillors are likely to be advised that the building might only attract offers of about £4.5 million.

This is despite the fact the council lent £14.88 million to the developer in 2017 to kickstart construction work and now wants to recover as much of the money as possible.

But councillors will be told that the costs of repairing the building, ensuring its completion and keeping it going are expected to quickly increase and be unaffordable to the cash-strapped council.

However, Conservative group leader Councillor Wayne Fiitzgerald, who is not a member of the cabinet, said: “We have seen two years of dithering by administrations led by Peterborough First and now Labour.

“Both have failed to take action in a timely manner on the hotel. It has been left too long to rot with pigeon infestation and water getting in.

He said: “The council should be prepared to see this building completed and used as a Hilton hotel.

“I hope someone does come along and finishes the hotel as it was originally intended.

“There is a danger the council will see a loss of upwards of £10 million if it just sells the building.

“They should get on and finish the project.

He said: “You can blame Covid and the after effects - it did see construction costs treble - but it was a good project, that should be finished and will bring a return for the council.”

It was the Conservative-led administration under the leadership of former Cllr John Holdich that agreed the near £15 million loan to the then hotel developer in 2017.

But after a period in 2023, when no construction work had been carried out for some time, the council took the developer, Fletton Quays Hotel, into administration.

Councillors will today be advised to allow the administrator Teneo, to be instructed to market and sell the hotel to ensure the best value for the council.

Hilton timeline:

This timeline highlights the route to the tough decision now facing the council’s new Labour-run administration.

September 25, 2017: A two year £15 million loan advanced for hotel with first drawdown in May 2020. (Pay back due April 2022) The loan was agreed for Norlin Hotels Holdings. A council reports states the hotel is expected to be completed in 2019.

October 2018: Councillors voice alarm as it’s revealed ownership of Fletton Quays Hotel has switched from Norlin to Propiteer Hotels. The loan to be paid out over 48 months from the time of first payment to Propiteer. The hotel is now due to be completed in 2020.

December 2019: Start of Covid-10 pandemic in UK

March 2020: UK goes into lockdown

May 2020: Construction work is due to start but cannot because of lockdown

Mid-July 2020: Construction staff on site. Completion of hotel is expected by November 2022.

March 2022: City council agrees FIRST extension for loan with term extended to 31st March 2023. Developer says it had not been possible to start work as planned.

April 2022: Topping out ceremony at Hilton Garden Inn. Hilton Hotels managing director says he expects hotel to be open by January.

February 2023: Website bookings being taken from July 17.

March 2023: Appointment of a head chef and a food and drinks manager is announced. Website bookings being taken from December 17, 2023.

13 March, 2023: Council agrees SECOND extension to loan taking it to the end of 2023.

May 2023 : Work on site slowed and then stopped

July 2023: Website bookings now being taken from July 2024.

October 17, 2023: Peterborough City Council announces it has taken developer into administration.

March 2024: Councillors told council has earmarked £10 million in case further investment needed in hotel’s completion. Says if council takes control it would then have the option of selling the hotel after three to five years.

May 22, 2024: Council announces it is to seek approval from extraordinary cabinet meeting on May 30 to submit credit bid to assume ownership of hotel.

October 2024: Administrator Teneo seeks a year long extension to administration period.

January 9, 2025: Sale of hotel fails as would-be purchaser pulls out at 11th hour

September 8, 2025: Spokesperson for Hilton Hotels says the company is still committed to operating at the Fletton Quays building when completed

September 26, 2025: Council leader Cllr Shabina Qayyum says needs of residents must be prioritised over ‘vanity project’ Hilton Garden Inn

October 2, 2025: Council’s ruling cabinet to be asked to approve marketing and sale of uncompleted Hilton Garden Inn to highest bidder