Hilton Garden Inn: Peterborough City Council says priority is now saving £15 million taxpayer investment
Loan was granted to kickstart building work
Council chiefs have stressed the importance of protecting millions of pounds of tax payers’ money as they seek to secure the completion of the Hilton Garden Inn.
The length of time it takes to both finalise the council’s ownership of the nine-storey hotel and to complete a deal with a contractor to complete the building work are taking second place to the need to protect the public’s investment.
A loan of £15 million, with interest now making the amount worth £17million plus, was made eight years ago by Peterborough City Council to the hotel developer as the local authority sought to get construction of the hotel off the ground.
Although the loan came from a Government fund, the amount still has to be repaid and if the proceeds from the hotel fall short the amount will have to be made up from funds used to pay for services.
Council leader, Cllr Dennis Jones said: “Due diligence work is continuing and we remain committed to the site's development whilst ensuring that taxpayers money is protected."
It is understood that finding a speedy resolution is not a priority with the emphasis on making the right decisions and protecting taxpayers’ money with a conclusion not expected for some time.
The project ran into difficulties two years ago when the developer ran out of money and work stopped.
The council took the developer into administration. Hopes of finding a buyer were dashed when a prospective purchaser walked away at the 11th hour.
For the last five months the council has been in talks with the administrator, Teneo, to take on full ownership of the building. At the same time the council is talking to a contractor to complete the building work.
But all the time the unfinished hotel is standing empty and unfinished and vulnerable to the weather.
Cecilie Booth, the council’s former executive director of corporate services and Section 151 officer but who is overseeing the project, said at the start of this year: “The building is not completely watertight and weatherproof so the building is deteriorating standing there empty over another winter.
"Remaining empty during bad weather means the asset is going to be worth less and the costs to complete will increase.
“But for the council to abandon the hotel would mean the costs we have already incurred will be picked up by taxpayers.”