Taxpayers set to foot bill as council chiefs refuse to reveal cost of Peterborough's Hilton Garden Inn sale
Taxpayers look set to pick up a hefty bill as council chiefs refuse to reveal the price paid for Peterborough’s partly-built Hilton Garden Inn.
They say the full details of the sale of the hotel at Fletton Quays to Peterborough’s Leisure & Co Hotel Ltd will be revealed by administrators Teneo in about four months’ time.
However, it has been estimated that the cost to the new owners of buying the nine storey building is likely to have been as low as £2.4 million and is unlikely to have gone beyond £3 million.
The Peterborough Telegraph reported earlier this year that the building was to be sold to a group of local business people with the price falling between £2 million and £3 million.
If the figures are correct it means that tax payers will be out of pocket with the council having made a hefty loss on the sale of the 160 bedroom hotel after it provided a £15 million loan to the developer nine years ago to get construction under way.
But that loss has already been accepted by the council leadership as a necessary cost of disposing the unfinished and pigeon infested building that seemed fast to becoming a millstone around its neck with councillors uncertain about which way to turn next.
Labour council leader Cllr Shabina Qayyum revealed in April this year that the council faced an expected £9 million to 13 million loss, leaving taxpayers to foot the bill.” as a result of the sale.
The council says the expected losses have already been included in its accounts for 2024/25 and that these will be reviewed again as part of the 2025/26 accounts process.
However, any shortfall in the sale price has to be contrasted with the value of the Hilton Garden Inn when it is completed and trading.
When the project was originally proposed more than nine years ago, the value of a trading Hilton Garden Inn was reportedly put at about £22 million and was to have been the flagship building on the city’s £120 million Fletton Quays regeneration hotspot.
That value is expected to have increased since then meaning that should the new owners look to sell the hotel as a going concern in the years to come, a profit is highly likely.
Teneo, which were brought in by the council when it became apparent that construction work on the hotel had stopped, have always warned that the council is unlikely to recover its money.
In addition, the council is also expected to pick a £1 million bill for the cost of the administration.
There are also 27unsecured creditors claiming a total of about £4 million who have been warned by Teneo that it is ‘unlikely that sufficient funds will be realised to enable a distribution to be made to unsecured creditors.’
However, HM Revenue & Customs, which is a secondary preferential creditor and which has submitted a claim for £13,000, is expected to be paid in full.
A spokesperson for Leisure & Co Hotel Ltd, which according to documents at Companies House was set up by Peterborough business owner Spencer Wrench on April 30 this year, said: “This (purchase) represents a significant investment in Fletton
Quays, and we look forward to welcoming guests to the hotel next year.”
The hotel will open next summer and will be managed by Leaf Hospitality and will create 60 jobs.