A senior councillor is demanding answers about a mothballed hotel development in the heart of Leeds’s flagship Arena quarter, and more than £4m of public funding which was used to shore up the £32m project.
The Arena Hilton hotel scheme has been languishing in building limbo for more than two years, when the original contractor went into administration.
The project is part funded by a taxpayer-backed loan of more than £4m from the Leeds City Region Enterprise Partnership (LEP) to Oxford GB Two Limited, the hotel development arm of the original contractor. However in March last year, that company also crashed.
Renewed concerns were raised at today’s (Wednesday) Leeds City Council cabinet meeting, during a discussion on an anticipated hotel boom in the city if the upcoming 2023 European Capital of Culture bid is successful.
Councillor Andrew Carter, leader of the opposition Conservative group, said that while talk of new hotels was all well and good, “the building over the road...has been standing with no work on it for two years”.
“It had a loan of public money given by the LEP,” he said.
“We have [council] representatives on the LEP. I want to know what has happened to £4m of public money.”
Coun Carter has now written to the LEP and West Yorkshire Combined Authority, which he said now administers the loan, and asked the question ‘will we see the £4m again?’
Councillor Stewart Golton, leader of the Lib Dem group, agreed that the project, and the investment, should be “scrutinised” further.
Martin Farrington, Leeds City Council’s Director of City Development, said the positive spotlight on hotels in Leeds was timely, as Premier Inn, Ibis and Dakota have all recently opened in the city.
But he stressed that while he acknowledged the concerns about the Arena Hilton delays, further action “needs to be done through the LEP”.
Tom Riordan, chief executive of the council, said he would pass feedback from the meeting to colleagues on the LEP.
But he pointed out that “the real problem is a very complex financial arrangement” and “unblocking” it was not straightforward.
“It’s a very complex legal and financial arrangement, and that’s why it’s taking so long,” he said.
Papers presented to the executive board at today’s meeting said the Arena Hilton remained “in an incomplete state”.
A non-public part of the document provided councillors with “an update on the current position” and the discussions that council officers have had with the Co-Op Bank and administrators Duff and Phelps, the report added.
The YEP reported earlier that a new report estimates at least 15 new hotels - and more than 8,500 hotel bed spaces - will need to be built to cope with an influx of tourists if Leeds wins its European Capital of Culture 2023 bid.