Council slammed over £1 hotel deal

£1.9m of heritage funding lined up for revamp of historic building

A prominent riverside property in Perth could be sold to hotel developers for just £1.

A preferred bidder to turn 1-5 High Street into a boutique hotel was agreed at a private meeting last week.

As well as the knockdown price, the council is prepared to borrow £1.9 million in heritage funding to attract a prestigious operator and maintain historic features of the building.

It needs more than £7m to be renovated into a boutique hotel and is currently costing the taxpayer more than £140,000 per year to run.

However, opposition councillors have called it the “wrong deal at the wrong time”. They pointed out that a similar £1 transfer of a building in Kinloch Rannoch, for community use, was rejected at the same meeting.

Council bosses say without the concessions, renovation of the vacant property would not be viable.

National hotel developers selected as preferred bidders for an opulent Perth city centre property are tabling a bid of just £1.

Perth and Kinross Council would also foot the bill for £1.9 million in heritage funding to upgrade and maintain the stained glass and other historic features at 1-5 High Street if proposals are signed off.

The move has been slammed because on the same day a prospective developer was selected for the boutique hotel, councillors narrowly voted against pleas to hand over a much smaller vacant public building to a community group for the same £1 fee.

The council wants to save the £143,000 per year currently needed to run the building and believes the cutprice offer is the best way to draw in investors.

Planners say revamping the premises could cost more than £7m and the subsidised asking price will draw in wealthy developers.

Henley Homes Group was announced as the preferred bidder last week.

The firm wants to renovate the building through its Rogue City Hotel Group (RCHG) brand, the team behind Dunalastair Hotel Suites in Kinloch Rannoch.

This decision, while not binding either party to an agreement, allows the council to start negotiations with the group.

Local authority chiefs would also have to turn to prudential borrowing to garner the seven-figure funds mandated for restoring and preserving the structure’s historic facade.

Perth and Kinross Council says they are looking at a long-term benefit, expecting the project to bring millions of pounds a year into the city and create more than 100 jobs during construction and a further 71 jobs after its revamp.

SNP group leader Grant Laing said it is the wrong deal at the wrong time.

He said: “I’m not against there being a boutique hotel at the site, I’m against selling a major asset for £1, losing control of the building and having to borrow £1.9m at a time when budgets are already tight.

“It’s not the right deal or the right time, as society is in flux and it could prove useful to hang on to the building for now.”

A council spokesperson said: “The council currently spends £143,000 per annum on operating 1-5 High Street.

“The overall cost of the development will be excess of £7m and without grant support to contribute to the restoration of key heritage features, the project is not financially viable.

“To finance the conservation grant of up to a maximum of £1.9m, the council proposes to borrow from the Public Works Loan Board with the borrowing costs met from savings made through not having to operate the building.”

Planners say revamping the 1-5 High Street site may cost more than £7m.