A £15 million loan from the city council to build the new Hilton hotel in Peterborough has yet to be signed off – 11 months after the deal was agreed in principle.
Last November, opposition councillors tried but failed to halt the loan to developers Propiteer for the new 160-room Hilton Garden Inn at the landmark Fletton Quays development after raising concerns the cash-strapped authority could be risking its financial security.
The Conservative-run council expects to make £500,000 from the deal which it has argued will help it tackle its crippling deficit after large cuts to its government grant.
However, the deal with Propiteer has yet to be signed, while the completion date for the Hilton has now been pushed back at least nine months to the spring of 2021.
It had been due to open by June 2020. Propiteer has also submitted plans for 100 one and two bedroom apartments alongside the four star hotel.
The firm said: “The Hilton hotel is not a standalone site as there is shared infrastructure between the hotel and the adjoining proposed residential development.
“As such, we have had to wait until the planning application for the apartments was submitted and approved. We are expecting a decision on this in September.
“Once this has been obtained we will be able to start work simultaneously on the two sites. We have already selected a contractor to build both developments.
“The expected completion date of the hotel is spring 2021 and the apartments will be ready in summer 2021.”
Propiteer already owns a number of other hotels, including other Hiltons, and is involved in town centre redevelopments. Its directors include a former finance director for Lord Alan Sugar.
Should the deal be signed, the £15 million would be loaned to Propiteer with the council borrowing it at a cheaper rate of interest than it will charge the developers.
Propiteer has described the arrangement as “good” for both parties while the council said it was protected as it could take over the hotel should the firm default on the loan.
A council spokesperson said: “Discussions between the council and the developers Propiteer Hotels Ltd are continuing and we remain excited to be welcoming a state-of-the-art Hilton hotel to our city. We expect the loan to be signed by the end of this year.”