Council tops up hotel funding after unforeseen costs
A council is adding £2.3m to its £7.5m investment to build a city centre hotel after unforeseen “changes”.
Stoke-on-Trent Council has already agreed to give a £4.55m loan to the construction of the Hilton hotel in Smithfield, and it’s set to increase this to £6.8m to cover initial costs due to ground conditions and drainage, as well as price increases by subcontractors.
The council’s report states that more funding is also required for the quality control assurances required for approval from Hilton Garden Inn and “inflationary prices”. The hotel has £19.56m in private investment in total.
The 4-star hotel, which will be owned and operated by developer Genr8, has been funded by Stoke-on-Trent and Staffordshire Local Enterprise Partnership, as well as the council.
The council said if the funding isn’t approved by cabinet members, Genr8 will be unable to sign the building contract, and any money drawn out from its initial investment will be lost.
The report states that, “The additional financial requirements of £2.337 million are met with a strong revised financial and commercial case that improves upon the base case assumptions”.
Councillor Daniel Jellyman, Stoke-on-Trent City Council’s cabinet member for regeneration, transport and heritage, said due to getting a better return on its investment, the council is spending no more than originally planned, but will get a better return on its investment.
“This is about building Stoke-on-Trent – showing leadership, being more commercial and taking a business-minded approach to changing the city for the better and to protect services for residents.
“The number of people visiting the city is up – 4.8m day visits in 2016, up by 100,000 on the previous year. But the number of overnight stays has kept at the same level of around 200,000. There is a clear need for a four-star hotel in the city centre to meet demand and to allow us to compete on a national scale.
“The council’s investment in this site will create more than 50 new jobs, bring millions of pounds of private sector investment into the city, support the city’s visitor offer and help to ensure work can swiftly begin on site.”
