Leeds Hilton project stalls after second contractor administration

THE construction of a five-star city centre hotel for Leeds is once again in jeopardy after a second contractor went into administration.

Plans for a £32m Hilton Hotel near Leeds Arena were unveiled in 2013 , with Leeds City Region Local Enterprise Partnership (LEP) awarding £4.8m funding to the project.

Wakefield-based GB Group was slated to develop and own the hotel, but progress was halted in 2015 when the firm and its main contractor GB Building Solutions went into administration. The firm had debts of £110m when it ceased trading, with the loss of 384 jobs.

Earlier this month, Sarah Bell and Philip Duffy of Duff & Phelps were appointed as joint administrators of Croydon-based construction company Oxford GB Two, the subsidiary of GB Group that took over the Hilton project.

The administrators said it is not known how much cash will be returned to creditors until the hotel is completed.

A spokesperson for Leeds City Region said the LEP was “disappointed” to learn of Oxford GB Two’s collapse. She said: “This has meant a delay in the completion of an important new facility for the City Region.

“The LEP is working with the Co-operative Bank and other interested parties to ensure that work restarts on site. Those discussions will continue with the administrators, to ensure that the project gets back on track and is completed as quickly as possible.”

Duff & Phelps managing director Ms Bell said discussions are underway for a forward sale that would allow construction work to begin again this year.

She added: “Until this is agreed and the project is completed it is unlikely that the final return to creditors of the company will be known; however stakeholders will be kept informed of progress.”