Peterborough City Council pushes ahead with Hilton hotel development

The hotel was intended to be a "game-changer" in the Fletton Quays development

A cash-strapped council says it must continue to invest in a stalled hotel development in order to recoup the money it has already ploughed in.

Peterborough City Council loaned Propiteer Hotels £15m to build a Hilton hotel on the River Nene's South Bank.

Work began in 2020 but encountered problems and delays and the council called in administrators in last year.

The council's new leader Mohammed Farooq said it had "no choice" but to continue in order to recover the money.

The £40m hotel had been described as a "game-changer" for Peterborough and a vital part of the redevelopment of Fletton Quays.

It was to have 160 bedrooms and a rooftop bar overlooking the city's cathedral.

Work on the hotel has ground to a halt

But in October the council brought in administrators Teneo to "determine the optimal strategy for the sale of the building".

Mr Farooq, of the Peterborough First group of Independent councillors, said the authority had no choice but to push ahead with the project.

"We could say 'Let us concentrate on our core duties and let us walk away' but then we'd end up taking a loss of a large amount that the balance sheet is not strong enough to absorb," he said.

"We feel we have to carry on, or otherwise the liabilities for the council are too high."

He said administrators were now looking for Hilton-approved building contractors to complete the work.

He said council money would be "set aside" to finish the hotel but did not say how much and where it would come from.

A council spokesperson said: "The council's loan remains secured against the asset [the hotel development] and professional valuations have been completed to confirm this at each stage when funds have been agreed.

"At this stage we consider that we have adequate security in the asset to cover the value of the loan."

A spokesperson for Hilton said: "Hilton Garden Inn Peterborough remains an important project for us and we look forward to working closely with key stakeholders to complete the development at the earliest opportunity.'