EXPLAINER: Why Peterborough City Council could never leave Hilton hotel after its £15 million check in

The construction of a £30 million plus flagship Hilton hotel for Peterborough has only been made possible with the vision and financial power of the local authority.

Peterborough City Council was the driving force seven years ago behind the ambition to build the impressive riverside, nine-storey hotel on the edge of the city’s premier regeneration site, Fletton Quays.

And it was the local authority which was prepared to provide the £15 million needed to kickstart construction work – on the understanding that a commercial rate of interest would ensure the council made a profit.

But this multi-million pound stake, which with interest stands at £16.7 million, is also the reason why the council cannot now leave the partially complete 160-room hotel, called the Hilton Garden Inn, following the developer’s collapse and placing into administration.

Councillors at an Extraordinary Cabinet meeting on May 30 will be asked to use the council’s status as preferred creditor to take on the ownership of the hotel and oversee its completion and they will be warned: “An alternate option is to do nothing and for the hotel to remain in administration.

"This is not a viable option to recover costs for Peterborough City Council.”

The council says the hotel development was ‘significantly delayed’ due to a slowdown in the construction industry during and following Covid and Brexit. It says work on site slowed in May 2023 and then stopped.

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

• September 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.
• 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 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.
• July 2023: Website bookings now being taken from July 2024.
• October 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.