Peterborough Tories say decision to sell unfinished Hilton hotel is ‘grave mistake’

Peterborough City Council’s ruling cabinet, made up of Labour, Liberal Democrat and Peterborough First members, met on October 2 and agreed to allow administrators Teneo to begin marketing the nine story building at Fletton Quays.

Labour cabinet member for finance Cllr Mohammed Jamil could not confirm an ideal sum that the council was looking for, but told the Local Democracy Reporting Service that they had already received a lot of interest and hoped to “end the saga” within the next 12 months.

He said: “We have done this to try and get back as much money for the council from the loan that we took out.

“We think this is the best course of action. Any other option would have either cost the council more or would have meant that the asset would have sat there and nothing would have happened.”

The council lent around £15 million to a developer to kickstart the hotel in 2017, but the company was taken into administration in 2023 after a prolonged period in which no construction work took place.

With the building now going on the open market, it is not set in stone that whoever purchases it will use it as a hotel. Cllr Jamil said he hoped the buyer would continue it as a hotel and confirmed that Hilton was still on board with the idea.

Cllr Wayne Fitzgerald, leader of the Peterborough Conservative group, said the decision to put the hotel on the market was a “grave mistake”.

“What the council should’ve done two years ago after ousting the Conservatives was find a development partner to share the risk, that’s what is missing. They dillied and dallied for two years and went nowhere.

“If you buy something, you can do what you like with it. This is a fire sale and the vultures are already circling.”

The decision to take out the loan for the hotel was made eight years ago under Conservative leadership.

Cllr Fitzgerald added: “This is not a blame game, this is trying to rescue what in principle was a sound idea. It was a council decision at the time, not just Conservatives.”

Cllr Jamil admitted that the hotel loan “did seem like a good idea at the time” but claimed he would not have done it.

It is not clear how much the hotel is likely to sell for, but the council does not expect to make back what it spent on the loan.

At the cabinet meeting, Liberal Democrat group leader Cllr Christian Hogg said: “I think we can all agree that the majority, if not all, councillors want to see the Hilton hotel functioning and operating in our city.

“Are we the best people to deliver that? Absolutely not. What we need to do is go out into the marketplace and get the right people with the right skills to deliver this.”

While the council does not own the Hilton Garden Inn building, it is the primary secured creditor.

At the time of the loan, the hotel was expected to be completed by 2019.

Cllr Jamil told cabinet members: “I don’t think I would recommend that we ever get involved in such a project again.

“Simply because this has taught everyone a real hard lesson.”