Hilton hotel project could make loss, council says

The council's cabinet will be asked to approve making the bid at a meeting on Monday

An in-debt city council has admitted there is no guarantee it will get its money back after loaning £15m to developers for investment in a hotel.

Peterborough City Council said the investment in the new Hilton hotel at Fletton Quays could lead to a "loss or a profit".

The developers fell into administration last year.

The council plans to bid for the freehold of the unfinished hotel and oversee the project until its completion.

A council spokesperson said: "There is the potential for the investment to make a loss or a profit, but the intention is for the council to complete the development and operate the hotel until such a time that the investment is recouped.

“Our projected profit and loss forecasts show that the hotel should generate a profit.

"We are researching government grants to use at the moment.”

With interest the £15m loan is now worth £17m, according to the Local Democracy Reporting Service.

The council has earmarked a further £10m for construction costs.

Both the project developer Fletton Quays Hotels, and Propiteer Fletton Quays Limited which owns the apartments adjoining the site, are in administration.

The council said it would take on a "suitable development partner" to finish the project, if its bid was successful.

The council's cabinet will be asked to authorise the bid for the hotel at a meeting on Monday.

The local authority has debts exceeding £400m.