Why would Hilton ask Peterborough City Council for a £15 million loan to build a hotel?
That has been one of the questions ever since it was revealed in September 2017 that a 160- room Hilton Garden Inn was to be built on the new Fletton Quays development.
Concerns have also been raised that the already cash-strapped authority could risk its financial security by handing over so much money in the expectation of making a £500,000 profit.
But, in an exclusive interview with the Peterborough Telegraph one of the key players involved in the project has promised that not only will taxpayers get all of their money back (as well as the interest), but that the city will boast the finest Hilton Garden Inn in the whole of the UK, complete with its own sky bar with stunning views of the cathedral.
“It’s a four star hotel, it’s a beautiful hotel,” sayid Dave Marshall, one of three businessmen with impressive CVs who run Propiteer. “The Hilton Garden Inn will be a really successful hotel.”
Mr Marshall spoke to the PT the day after some opposition councillors tried to stop the £15 million loan from going ahead. Although he has little to say about the councillors’ action - “there’s never a problem questioning where money is spent,” - he is happy to speak in detail about his company and how it operates. Propiteer has been working with Hilton for years, he said, and are building Hilton hotels which they then run on the chain’s behalf.
Positive talks on building a Hilton at Fletton Quays led to the council offering a £15 million loan to Norlin Hotels Holdings Limited in which Propiteer was one of the two partners at the time. Propiteer has since brought out Norlin’s share, with Norlin pursuing other interests. The money is now being loaned to Propiteer with the council borrowing it at a cheaper rate of interest than it will charge the developers. Work on the hotel is due to begin early next year before opening in the first half of 2020. Propiteer, which has been operating for nearly four years, will then run the hotel, which will cost at least £16 million to build. The businessmen are putting some of their own money into the development, as well as taking on the loan.
Asked why they are loaning the money to build the hotel from the council, Mr Marshall said: “We could go elsewhere, but it’s a good arrangement for the council and it’s a good arrangement for us.”
Mr Marshall said they could make more money by putting in a cheaper Hilton hotel at Fletton Quays, but that the Garden Inn is “the right product” for the city’s growth aspirations.
He also promised that taxpayers’ money “isn’t at risk” from the loan, with the council able to take over the hotel in the unlikely event that Propiteer defaults. And the hotel may just be the company’s first project in Peterborough.
“We would love to identify more sites in a city that is coming up like this,” Mr Marshall added.
Propiteer has three main directors:
. Dave Marshall - a qualified marketeer who started in operations, finance and buying with Sainsbury’s
. Colin Sandy - who was finance director for Lord Alan Sugar
. Tom Dalton - the former chairman of giant construction firm Laing O’Rourke, which managed the construction of the Olympic Park in London.
Propiteer owns a number of hotels, including other Hiltons, and is involved in town centre redevelopments.
All of the company’s money is sourced in the UK, according to Mr Marshall, but the firm is also investing in Ireland and has one asset in Antigua.