Hastings car park site earmarked for Premier Inn hotel set to be sold after costs double

On Monday (January 29), Hastings Borough Council’s cabinet committee will be discussing a recommendation to agree to sell the land at Cornwallis Street to Whitbread Plc on the proviso that the hotel is built at the firm’s expense, within a reasonable timeframe and that the council is released from all liabilities contained in the current agreement.

When first agreed in October 2019, the project was expected to cost around £7m. But last September cabinet members backed proposals to increase the project’s capital programme budget to £13.6m.

The council said the hotel build process will create around 35 construction jobs and when it opens it will provide 84 beds, around 30 jobs and bring an estimated visitor spend of £2.1m a year.

A report by Jane Hartnell, the council’s chief executive, which will be presented to the authority’s cabinet committee on Monday, said: “The council entered into an agreement in 2021 to build and lease a hotel on the site at Cornwallis Street.

“The council tendered for the build work and following two procurement exercises, the costs of the build work exceeded the estimated capital programme budget.

“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.

“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.

“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 current agreement is unaffordable now that build costs have increased significantly since the date this project commenced.”Cllr Julia Hilton, leader of the council, said: “All councillors are grateful to officers who have been working hard for several months on this to achieve a much better outcome for the council.

“This project is a legacy project that was agreed before Covid. It will provide much-needed hotel bed space for our tourism economy while removing any financial risk to the council. We will be ensuring that Whitbread keep residents in the area fully updated about what is happening and that the hotel is built as quickly as possible.”