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Councillors asked to consider next steps for Hilton Hotel development

01 March 2024

Councillors will be asked to authorise the council submitting a credit bid for the freehold of the Hilton Hotel at Fletton Quays to safeguard the council’s investment and ensure it is completed as quickly as possible.

It follows the decision by the council last November to appoint administrators in relation to the developer of the new hotel at Fletton Quays.

As part of the administration process, a ‘closed’ procurement exercise, limited to companies with a legal interest in the hotel, is currently taking place to identify a route to completion for the hotel. This process will conclude on 4 March.

If there are no suitable bids, the council will make a credit bid for the freehold of the hotel, subject to cabinet approval on 11 March.

The credit bid would be up to the value of the amount the council is owed for the loan of the hotel, which means no new money would need to be spent to take ownership of the freehold of the hotel site and to protect the council’s investment.

The council would then develop the hotel to completion with a suitable development partner and appoint an operator to run the hotel as a Hilton franchisee post completion. The council would then have the option of selling the hotel, most likely after 3 to 5 years.

Councillor Mohammed Farooq, Leader of Peterborough City Council, said: “It is regrettable that we are in this situation, however we now either walk away and lose some or all of the money we have advanced, or we see the development through to completion and benefit from the return of our loan and a fantastic new hotel facility for Peterborough. The advice that we are receiving is that the best way to achieve this is by taking control of the freehold. We are not the only council to have taken this route and others have been successful in doing so.

“Our focus remains on seeing the hotel completed as soon as possible, providing a fantastic high-quality hotel and at the same time protecting the council's investment. Having a Hilton hotel in the city would be a huge asset and therefore I am pleased that Hilton remains committed to the development and to Peterborough. They are supportive of the council’s approach and are helping us to plan the next stages.

“I remain focussed on delivering best value with taxpayers’ money.”