Cash-strapped Middlesbrough Council could give £5.8m loan to turn empty buildings into new hotel

Ray Mallon looking out onto Centre Square, Middlesbrough from the rooftop gallery of Mima art gallery with the Cleveland Centre on the far left of the picture

Ray Mallon looking out onto Centre Square, Middlesbrough from the rooftop gallery of Mima art gallery with the Cleveland Centre on the far left of the picture

First published in News
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A CASH-strapped council is poised to hand over a loan of almost £6m to create a new hotel in a last ditch attempt to bring empty town centre buildings back to life.

A Holiday Inn Express with 138 bedrooms is earmarked for the Cleveland Centre in Middlesbrough with views over Mima art gallery and the historic central library.

The town centre is already served by two hotels, the Thistle on Fry Street and a Travel Lodge at Cannon Park.

To ensure the redevelopment at Cook and Endeavour House on Albert Road goes ahead - buildings which have been predominantly vacant for 20 years - Middlesbrough Council is acting as a bank by giving a secured commercial loan over eight years.

At its executive meeting on Tuesday members will be asked to follow the officers’ recommendations and approve the £5.8m loan to developers Ashall Projects Limited for the new hotel, which is expected to cost £12m to build and employ 100 staff.

Financial cuts totalling £85m will need to be made in Middlesbrough over the next five years, it has been estimated.

The town's elected mayor Ray Mallon has also confirmed the loss of 300 council jobs this year, while another 300 will be transferred to other organisations contracted to carry out some council services.

A report prepared for Mr Mallon and his executive to consider next week stated: “In these times of significant budget cuts imposed on the council, investing such a significant amount of money into such a scheme would be a significant undertaking.

“However, it is clear that there is unlikely to be alternative resources available for the re-use of these buildings from either the private sector or Government-based regeneration funds.

“The proposal would appear to be the only feasible way by which these buildings will be brought back into use.”

It is just one of a series of major initiatives to be considered at the meeting.

Other proposals include the permanent closure of Southfield Road for the next phase of Teesside University’s campus and the management transfer of Mima art gallery to the university.

Mr Mallon said: “In challenging economic times, this council has been forced to transform the services it is able to deliver and the way it delivers them, and the impact of those cuts is hitting every part of the town.

“That is why it is more important than ever that we continue to invest in the sort of initiatives that will ensure Middlesbrough has a secure and prosperous future.”

Comments (3)

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6:41am Thu 27 Feb 14

George19 says...

Financial cuts totalling £85m will need to be made in Middlesbrough over the next five years, it has been estimated." With not a jot of financial loss or austerity concerning Mallon or the council executives".
Financial cuts totalling £85m will need to be made in Middlesbrough over the next five years, it has been estimated." With not a jot of financial loss or austerity concerning Mallon or the council executives". George19
  • Score: 5

12:25pm Thu 27 Feb 14

Claude Ted says...

This could well be absolute folly. I wonder whether the management of the Thistle Hotel have been consulted.
Is there really a business case to give a company that appears to have been operating for only 2 years a loan of £5.8M!
This council has a pretty lousy record when it comes to its record on building projects.
I note that when £750K of ratepayers cash was given as a grant for Crown House the expectation was that 30-40 businesses would set up in that building, I don't think that is the case in reality!
I am all for redevelopment but it must be done on a sound basis with an audited business plan, why would MBC think it should be giving loans underwritten by ratepayers to private developers?
If it's such a good deal then let the developers fund the project at their own risk.
In this times we cannot afford risking £6M for something that may never come to fruition especially when promoted by publics service officials that have blighted the town with their demolition projects!
This could well be absolute folly. I wonder whether the management of the Thistle Hotel have been consulted. Is there really a business case to give a company that appears to have been operating for only 2 years a loan of £5.8M! This council has a pretty lousy record when it comes to its record on building projects. I note that when £750K of ratepayers cash was given as a grant for Crown House the expectation was that 30-40 businesses would set up in that building, I don't think that is the case in reality! I am all for redevelopment but it must be done on a sound basis with an audited business plan, why would MBC think it should be giving loans underwritten by ratepayers to private developers? If it's such a good deal then let the developers fund the project at their own risk. In this times we cannot afford risking £6M for something that may never come to fruition especially when promoted by publics service officials that have blighted the town with their demolition projects! Claude Ted
  • Score: 5

3:51pm Thu 27 Feb 14

DarloXman says...

Does Middlesbrough really need another hotel? I would think not!
Does Middlesbrough really need another hotel? I would think not! DarloXman
  • Score: 2

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