Unfinished hotel buyer 'just walked away'

A council has said it was "hugely disappointed" a buyer for an unfinished city hotel had pulled out but revealed it still had "other options" available.

Peterborough City Council (PCC) was on the cusp of selling the Hilton Garden Inn in December but the deal fell through when the developer walked away just two weeks before contracts were due to be exchanged.

The unnamed buyer was one of three parties interested in buying the Fletton Quays hotel, which was originally due to open in 2019 but was beset by construction delays.

Cecilie Booth, PCC's executive director of corporate services, said: "We are talking to two other parties and we should have a conclusion towards the end of January."

Ms Booth said the council would either accept an offer from a different buyer or complete the hotel project itself, which would require about one more year of construction.

She said the "hugely disappointed" council had not been told why the deal fell through.

"The buyer just walked away, I don't know why," she said.

The hotel is 80% complete, with a handful of rooms already completely fully fitted out, but there has not been any construction for two years.

It still needs major works such as lifts and a gym.

In 2017, PCC lent £15m to a developer to build and own the hotel using the Hilton brand as a franchise, as part of a major redevelopment of Fletton Quays.

The predicted opening date of July 2019 was pushed back to summer 2022, but eventually the council put the developer into administration.

The council's loan now has an outstanding balance of £17m, accounting for interest, which can only be paid back once the hotel is up and running with paying guests.

If a buyer can be found, it will be down to them to pay the council back.

If the council chooses to own the hotel, it plans to run it for two to five years before selling it on to recoup its investment.

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