Peterborough City Council to bid to take ownership of unfinished £30 million Hilton Garden Inn

Peterborough City Council is poised to take control of the partially-finished £30 million Hilton Garden Inn.

The move will safeguard the local authority’s £16.7 million investment in the nine-storey luxury hotel on the banks of the River Nene at Fletton Quays.

It comes after building work stopped last spring and the council took the developer into administration.

Councillors will now be asked to agree that the council submit a credit bid for the freehold of the 160-room Hilton Garden Inn giving the local authority ownership of the hotel.

This is intended to safeguard the council’s investment and ensure the building is completed as quickly as possible.

A report from the administrators Teneo reveals there had been no building work carried out since March 2023.

A council spokesperson said: “No new money would need to be spent to take ownership of the freehold of the hotel site and to protect the council’s investment.”

Councillor Dennis Jones, leader of Peterborough City Council, said: “This situation is one which we wish could have been avoided and it is most likely the hotel would now be open if it had not been for the Covid pandemic.

“Owning the hotel will allow us to see the development through to completion and benefit from the return of our loan and a fantastic new hotel facility for Peterborough.

"The alternative is that we walk away and lose most of, if not all of our investment.

“Having a Hilton hotel in the city would be a huge asset and therefore I am pleased that Hilton remains committed to the development and to Peterborough.

"We are working closely with Hilton and other partners as we plan the next stages.”

The council agreed in September 2017 to provide funds for the construction of the hotel through a loan of up to £15 million - or 83 per cent of construction costs - to the developer.

After the developer was taken into administration last October, a ‘closed’ procurement exercise, limited to companies with a legal interest in the hotel, took place earlier this year to identify a way to complete the hotel.

One bid was received but the amount offered was ‘significantly lower’ than the value of the council’s outstanding loan.

In view of that offer and to allow officers time to consider the options available to the council, Cabinet members in March deferred a decision to submit their own bid for the hotel.

Now councillors at an Extraordinary Cabinet meeting on May 30 are to be asked to support the submission of a credit bid.

A report to the meeting states: “The council has provided a loan to fund the hotel, the overall outstanding balance including interest is £16.7 million.

"The council provided this loan from borrowing, and this loan will have to be repaid regardless of what decisions are made next.

"If the council puts in a credit bid to purchase the hotel, it would be made using the funds already advanced to the hotel developer from the existing loan.

"It adds: “No further funds would be used to purchase the hotel.”

A report to Cabinet in the summer will detail the next steps if the purchase takes place.