Decision details

The Cabinet Member:

1.    Approved the amendment of the term of the £15m facility with Propiteer Hotels Ltd and its subsidiary Fletton Quays Hotels Ltd from 24 months from the date of the first drawdown to 31 March 2023.

2.    Authorised the Director of Law and Governance and Interim Director of Resources to exercise delegated authority to finalise and agree all necessary legal agreements with Propiteer Hotels Ltd for the purposes of facilitating this arrangement.

The Hotel will not be fully constructed by the expiration of the original loan facility.  By approving the recommendation, the Council will ensure its loan can be refinanced in an orderly manner once the hotel construction has completed and begun trading.

The Council could refuse to extend the loan facility, however this would require Propiteer to refinance in the middle of construction, which although not impossible, gives rise to a risk that the refinance is not achieved. 

If refinance was not achieved for the uncompleted hotel the Council would need to exercise its security and take over the hotel building.  The Council would then need to market the hotel on the open market in its uncompleted state or assume the responsibility for its construction and fit out in order to market for sale or operate itself once completed.  The Hilton brand hotel franchise agreement is with Propiteer and any transfer of the brand to the Council would need to be separately negotiated, again leading to the risk of the city losing a prestigious Hilton Garden Inn hotel on the Fletton Quays site.

None.

Cabinet Report SEPT17/CAB/41

Cabinet Member Decision Notice OCT18/CMDN/47