City council puts hotel project into administration “to safeguard its investment”

Peterborough City Council has put a local hotel project into administration in a move it said was intended to safeguard a £15m loan it has made to developer.

Cecilie Booth, executive director for corporate services and section 151 officer, said: “The council has appointed administrators in relation to the developer of the new hotel at Fletton Quays. 

“This action has been taken in line with the terms of a loan agreement between the council and the developer.

“We believe this course of action is necessary to ensure the hotel is completed and to safeguard the council's investment.

“The administrators will now take control of the building. They will also determine the optimal strategy for the sale of the building.”

Ms Booth said the loan was originally provided to support the regeneration of the city’s Fletton Quays area and the council wanted to see the hotel completed as rapidly as possible.

A cabinet report from last March recommended an extension of the expiry date of the £15m loan facility with Propiteer Hotels from 31 March 2023 to 31 December 2023 “subject to confirmation being received that the rights and security of the council will be unaffected by this extension”.

That report said a meeting last January between representatives of Propiteer and various senior council officers had heard that construction was progressing well but “there have been several pressures that have affected the construction plan”.

These included the liquidation of the main contractor, which led to the appointment of new contractors, and supply chain problems that had affected labour supply.

Propriteer’s website describes the company as a developer and manager of hotels in city centres and “high transient destinations across the UK and Ireland”.

It said Propiteer has “strategic partnerships with the world’s strongest hotel brands, including Hilton Worldwide and Marriott International, who employ their vast resources to support our project growth plans and help to ensure the success of our assets”.

Propriteer described the Peterborough project as worth £26m with a 160 beds capacity.

A Hilton spokesperson said: "Hilton Garden Inn Peterborough remains an important development for us and we look forward to welcoming guests to the hotel in future."

Mark Smulian