Council decides to buy unfinished Hilton hotel

A council has decided to buy an unfinished Hilton hotel in order to recoup its £17m investment in the building.

Peterborough City Council will submit a credit bid to take ownership of the Hilton Garden Inn on Fletton Quays.

Cecilie Booth, the authority's executive director of corporate services and section 151 officer, said offers from other bidders to buy the hotel "weren't good enough".

In December, a deal to sell the hotel to a developer fell through shortly before contracts were due to be exchanged.

The council wants to recover a £17m loan it made to the original developer in 2017, which includes interest.

The developer went into administration in 2023 after repeated delays to the hotel's completion.

"The hotel should have been up and running by 2020," said Ms Booth.

"We had Covid, we had Brexit, and the construction industry just dried up – nobody could have foreseen [this] back in 2017."

The other option available to the council was for another developer to buy the hotel and oversee its completion, but the unitary authority said it was unable to strike a deal.

"Everybody looking at it wants a bargain which would mean that the council would lose a lot of money," said Ms Booth.

The next step is for the council to carry out a procurement exercise where it finds a developer to build the hotel, which it says is about 80% complete.

It will also appoint a Hilton-approved operator that would run the hotel as a franchise.

The council said it expected construction to take 12 to 18 months to complete, and hoped the hotel would be open "at some point" in 2026.

At that point, it would either use the income from the hotel to pay back the loan, or sell it to another buyer.

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