Peterborough City Council to complete Hilton Garden Inn after deal talks fail

Peterborough City Council is to take ownership of the partly built Hilton Garden Inn following the collapse of talks with potential buyers.

The local authority has confirmed that it has renewed its £17 million credit bid to take on the freehold of the nine-storey building at Fletton Quays.

The move comes just two weeks after a potential buyer for the 160-bedroom hotel pulled out of a purchase deal at the last minute.

Talks with two other interested parties over the last few days have also failed to result in an agreement.

As a result, it has been decided that the council should return to its earlier plan that it should oversee the construction works needed to complete the hotel while retaining the option to sell to a third party in the future.

The council will now complete the move that it began last May to secure the approval of the administrators Teneo for the local authority to take ownership of the hotel.

It was the council that took the hotel developer, Fletton Quays Hotel, into administration in October 2023 after it became apparent that no building work had been done on the hotel for many months.

The local authority can claim ownership because it is the preferred primary creditor as a result of the £15 million loan it granted to the hotel developer in 2017.to kickstart the development. Interest means the amount owed to the council is now £17 million.

Cecilie Booth, Executive Director of Corporate Services and Section 151 Officer, said: "We remain committed to seeing the Hilton Hotel through to completion, to protect the council's investment and to achieve a fantastic new hotel facility for Peterborough.

"We are now proceeding with the submission of a credit bid to secure the asset, as approved by Cabinet last May.

She said: “No new money would need to be spent to take ownership of the freehold of the hotel site.

“Once in council ownership, we will either build to completion or sell to a third party at a later stage."

It is estimated that it could take 12 to 18 months, depending on how soon the council can get contractors and sub contractors on site, to complete the process.

A council spokesperson explained: “We did submit our credit bid last year and it was accepted by the administrators.

"However, we then had a credible buyer and it was more cost effective to allow this buyer to complete the transaction directly from the administrators.

"Now that the buyer has dropped out we will complete the credit bid.”

What is the condition of the hotel?

Ms Booth has previously said: “The building is not completely watertight and weatherproof so the building is deteriorating.”

Why can’t the cash be spent on other services?

Ms Booth said: “People say we are pouring all this money into a hotel whereas we could use it on social care, street cleansing, the regional pool and so on

“But this isn’t tax payers money that we are using to prop up the Hilton.

“The money to lend to the developer has been borrowed by the council from the Government’s public works loan board.

"That loan will have to be repaid by the council whether the hotel carries on or not.”