Council set to lend Â£15 million for Fletton Quays hotel on Peterborough's South Bank
Peterborough City Council is set to lend Â£15 million to accelerate the financing of a new 160 bed hotel at the landmark Fletton Quays development.
The council’s cabinet is expected on Monday (September 25) to approve the loan to a developer for a period of two years to fund the hotel’s construction on the South Bank.
The authority would borrow money at a “very competitive rate” before then lending it to Norlin Hotels Holdings Limited which would pay a higher rate of interest to the council at the end of the two-year period.
The loan would be secured against the land and the building and the amount loaned would never exceed the value of the site.
Cllr David Seaton, cabinet member for resources at the council, said: “The council is fully behind the extensive regeneration of the Fletton Quays site and ensuring that it is delivered as soon as possible.
“Local authorities can borrow at a very competitive rate and therefore the council would make a return on the loan which will be lent to the developer at a higher rate of interest.
“All councils need to generate additional income to support services as our government funding continues to fall and demand for services rises.
“The council would be protected by securing the loan against the land and the hotel. A valuation would take place every time the developer makes use of the lending facility to make sure the loan value never exceeds the value of the site and works at that given time.”
A planning application for the hotel - which will have a sky bar - was recently submitted to the council.
The brand of the new hotel will be announced publicly by the developer shortly.
The Fletton Quays development has been spearheaded by the Peterborough Investment Partnership of which the council is a joint partner.
The £120 million project also includes 350 apartments, offices and restaurant, retail and leisure facilities, including an arts centre.