Leeds Council asked to stump up extra £900,000 for new 'apart hotel' in Leeds city centre

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Developers have asked Leeds City Council to spend an extra £900,000 towards the cost of a proposed new “apart-hotel” complex next to Leeds Market.

Plans to redevelop Kirkgate Market’s frontage onto George Street with a “multi-storey building” of nine ground floor shops and an “apart-hotel” have already been given the green light by the authority.

The authority decided in late 2017 to contribute £12.9m to the scheme, in order to have a fifty percent share in the hotel’s lease once it was completed.

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But council decision-makers are now set to discuss spending an extra £917,000 due to “an increase in estimated construction costs”.

Credit: Town Centre SecuritiesCredit: Town Centre Securities
Credit: Town Centre Securities

However, a council report claims that the extra cost is offset by an increase in the site’s value.

A full planning application to build a six-storey “apart-hotel”, which will feature a mix of residential and hotel accommodation, has already been approved by the council.

But a report which is set to go before the council’s executive board next week states that developer Town Centre Securities have approached the council asking for the authority’s contribution to the scheme to increase by £917,000.

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The report added: “This is due to an increase in the estimated construction costs, principally associated with an increase in the number of rooms in the aparthotel (136 from 128) to meet customer demand and the associated fit-out costs.”

It added that the increased cost has been “more than off-set” by an increase in the investment value of the finished scheme, which, it claims, is “in excess of the increased cost”.

It added: “The increased value is as a result of improved lease terms being agreed with the aparthotel operator. The revised overall cost of the scheme to the Council, including to acquire a fifty percent share ownership, is now estimated to be £14.07mm (sic).”

Councillors on the panel are recommended to: “Approve the injection into the Capital Programme and authority to spend of an additional £917,000 for the purpose of acquiring a fifty percent share of the completed development.

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“Approval is also sought for the council’s payments to acquire its interest in the completed development being made on a phased basis through the construction period against approved architect’s certificates.”

The report will be discussed during Leeds City Council’s executive committee meeting on Wednesday, October 16.