Hotel defaults on £11.4m council loan

Buxton Crescent reopened in 2020

The company behind a luxury spa and hotel in Derbyshire has defaulted on a multimillion-pound council loan repayment.

Buxton Crescent, in Buxton, reopened in 2020 - 17 years after a £70m renovation began.

But finance reports revealed the company told Derbyshire County Council in March 2023 it "may not... be able to commence" loan repayments worth £11.4m due to the "hotel’s weaker than anticipated revenues and high cost of energy".

A council spokesperson confirmed to the BBC that Buxton Crescent Ltd had defaulted on a payment.

Attractions include a refurbished Victorian thermal pool filled with heated Buxton mineral water

They added the council was "in talks" with the company to "explore options" in protecting its investment as well as supporting the "viability" of the hotel.

The Grade I listed building was constructed in the 1780s by the fifth Duke of Devonshire as the centrepiece of a Georgian spa development.

It fell into disrepair and in 2003 work began to turn it into a hotel and tourist attraction. The renovation project was projected to cost £32m but costs more than doubled to £70m.

The hotel has 81 bedrooms, a spa and three pools, including a refurbished Victorian thermal pool filled with heated Buxton mineral water.

Documents seen by the BBC show the council agreed to write-off £566,000 in interest accruing on the loan to the company for the end of the 2020-21 financial year and a further £162,000 accruing between 1 April 2021 and 18 July 2021.

The council said it did this due to hotel revenues being "significantly lower than anticipated because of the Covid-19 pandemic", which had "impacted on its ability to afford interest payments on the loan".

These write-offs were funded from Covid-19 grant funding, the council said.

Who funded the renovation?

• £23.8m grant from the National Lottery Heritage Fund

• £13.4m contribution from Derbyshire County Council

• £2m grant from D2N2 Local Enterprise Partnership

• £600,000 grant from Historic England

• £1.1m contribution from High Peak Borough Council

In March 2023, the council then received correspondence from one of the joint controlling interests of Buxton Crescent Limited who indicated that the company "may not meet the loan covenant tests or be able to commence loan payments at the expected maturity date due to the hotel’s weaker than anticipated revenues and high cost of energy".

The council at the time said this was "evidence" the company's risk of defaulting on all or part of the loan had "increased" and any potential loss would be funded from earmarked reserves.

A spokesperson for Derbyshire County Council said: “Buxton Crescent Ltd have unfortunately defaulted on the payment of a loan made by the county council for the Buxton Crescent Hotel.

"We are in talks with Buxton Crescent Ltd to explore options to protect our investment as well as support the viability of the hotel.”

Buxton Crescent was built in the 1780s by the fifth Duke of Devonshire

Buxton Crescent Limited is jointly owned by CP Holdings and the Trevor Osborne Property Group Ltd, and the hotel and spa is operated by Ensana.

Freehold of the buildings is held by High Peak Borough Council and Derbyshire County Council.

Buxton Crescent Ltd has been contacted for comment.

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The hotel also has a rooftop pool