CONTROVERSIAL HOTEL PLAN GETS GO-AHEAD
A DEAL that will see millions of pounds given to developers to build a luxury hotel in Coventry has been passed - despite fears it is a public subsidy.
The Labour-led authority has agreed to sell the rights to the land around the Coventry Evening Telegraph building to build 1,270 student flats and a hotel.
Developers Far Gosford Developments Limited will pay the open market value for the developed site - £6.58m and just £3 in rent per year on 250-year leases, as revealed by the Local Democracy Reporting Service last week.
The money, which the council would normally receive for the land, will be paid in Performance Security Deposits and given back to the developer when milestones are met.
The council will keep the cash if the developer does not meet these obligations.
It will also forgo its existing rental income on the three sites on Chapel Street, Lamb Street and Bishop Street - £623,000 on varying leases.
A council report had described the hotel as “unviable” on its own due to the significant costs.
But at full council on Tuesday cabinet member for jobs and regeneration Councillor Jim O’Boyle said there was “no other deal on offer” and it was the only way for the hotel to go ahead.
No money would be given to the developer upfront, he added.
The deal also ensures inactive land is brought back into use, helping the redevelopmentof the city by bringing business rates, jobs, and visitor spend.
He added: “This equates to an investment of circa £120 million in our city. That is consider-
able and not to be shirked at.”
But Conservative opposition leader Cllr Gary Ridley said it does not represent value for taxpayers’ money.
“It is impossible to get through the first page of this report without it talking about it not being viable,” he added.
“You have to look at that with some serious concern and a heavy heart and say we are not getting the best deal for the taxpayer.”
Cllr Ridley also called the deal a “ransom strip”.
He added: “We are told the council cannot act unilaterally therefore the land is worthless, but the truth of the matter is there’s a valuation for the land.
“We all know it amounts to a public subsidy. Whatever the mechanism, up front cash or contribution of land, this amounts to a subsidy.
“It talks about issues of legal aid and a thorough investigation by legal services before entering into an agreement. I am deeply concerned that any report can brought before elected members before these issues have been resolved.
“A conscientiousopposition cannot vote to use up huge amounts of resources which belong to the taxpayer without sufficient guaranteesthat firstly it is legal, and secondly in the best interests of the taxpayer.”
Cllr O’Boyle said the council’s position was protected by the contract, and emphasised a deal wouldn’t be signed until issues over state aid were clarified.
He added: “When someone says it’s a bad deal for taxpayer what I will say is at the moment £8,000 is what the authority gets from these leases per annum.
“Some of these run till 2106 so it wouldn’t realise any of the money from the leases until the 22nd century.
“If we want to be serious about redevelopment within our city we need to be serious about working in the real land.
“We will take the decisions and we will be brave.”
The deal was passed, with the Conservatives and the council’s sole Independent voting against it.
Last week, a spokesperson for Far Gosford Developments Ltd, said the cost to the council for the scheme was a modest £160,000. They said: “The investment in the Coventry Telegraph regeneration project is £120m, which will include a unique new hotel and student accommodation which will bring economic activity and value to a vital area of the city centre. This has been secured with a council cash input of the loss of ground rents of only £8,600 a year. The value of this input is £160,000.”