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Decision details
Cornwallis Street Hotel Part 2
Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
Decisions:
The Chief Executive presented a report to recommend as an alternative to the current legal agreement with Whitbread Plc, that the land at Cornwallis Street be sold to Whitbread Plc with the caveat that they build the Premier Inn hotel at their cost and release the council from all previous agreements.
Councillor Willis proposed approval of the recommendations, seconded by Councillor Roark.
RESOLVED (unanimously):
1. That Cabinet agree to sell the land at Cornwallis Street to Whitbread PLC on the proviso that the Premier Inn hotel is built at their expense, within a reasonable timeframe (to be confirmed subject to legal due diligence) and that the council is released from all liabilities contained in the current agreement.
2. That the Chief Executive, Chief Legal Officer and Chief Finance Officer be delegated authority to conclude the legal details of the new agreement (as per the requirements set out in the Part II confidential report) with Whitbread Plc in consultation with the Leader of the Council and the Finance Portfolio Holder.
Reasons:
1. The council entered into an agreement in 2021 to build and lease a hotel on the site at Cornwallis Street.
2. The council tendered for the build work and following two procurement exercises, the costs of the build work exceeded the estimated capital programme budget.
3. Officers have negotiated with Whitbread PLC (in the light of the council’s financial challenges bought about by the housing crisis and requirement for the council to spend over £5.5m p.a. on temporary accommodation), an alternative agreement which enables the much-needed hotel to be built without the need for council investment.
4. The council is at present still legally bound by the original agreement which contains significant financial penalties if the hotel is not built within the specified timescale.
5. The existing agreement places significant financial and potential legal risks on the council’s sustainability and therefore the new agreement is strongly recommended as a solution.
(The Chair declared the meeting closed at 8.13pm)
Publication date: 30/01/2024
Date of decision: 29/01/2024
Decided at meeting: 29/01/2024 - Cabinet
- Restricted enclosure View reasons restricted
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