£4.5m bid to kickstart end to Prom eyesores

It has emerged Blackpool Council has already intervened in the long-running dispute over eyesore hotels on South Promenade by buying the site.

Now councillors are being asked to agree to a £4.5m loan towards the redevelopment of the fire-ravaged Palm Beach and Bourne Hotels on Bourne Crescent, to pave the way for a new Hilton by Hampton Hotel.

Blackpool-based company Create Construction was granted planning permission last August for the 130-bedroom scheme.

There is already £8m committed to the scheme, including £1m from Create Construction and £7m from a PLC pension fund.

But there is still a funding shortfall in the financing of the plans.

The council loan could fill this gap, ensuring the full investment can go ahead.

A spokesman for Create Construction said: “This is a key site for Blackpool being on a major gateway route into the town.

“We are keen to do this development and the council can help us to make it happen.

“With their investment, plus our own personal investment of almost £1m and a major PLC pension fund already committed to providing in excess of £7m, we can achieve this.

“We are hopeful the council will provide the final piece of the jigsaw in the funding of this scheme.

“The arrangement makes good commercial sense for all parties, as it will unlock the development, in an area in need of re-generation, and will provide the council with a healthy return on their investment.”

The council bought the site earlier this year for £450,000 through the Blackpool Housing Company Ltd, an arms length organisation set up to tackle poor accommodation in the town.

The move ensured the development did not fall through as time was running out to make the purchase and also opens the way for the demolition of the eyesore hotels at a cost of £400,000.

Blackpool Council’s executive will consider three options for the site, including making a £4.5m loan, when it meets on Monday.

The other options are to pursue demolition and go out to tender to seek the best use for the site, or for the council to go it alone by providing the full funding.

But a report to the committee recommends the loan option.

Council leader Coun Simon Blackburn said: “These two properties on Bourne Crescent have been a blot on the landscape for far too long.

“We regularly received complaints from residents, visitors and businesses  who were concerned about them falling victim to anti-social behaviour and affecting the appearance of the area.

“A decision was made to acquire the two properties to ensure that action was taken.

“The site has huge potential but the priority in the first instance is to demolish the existing buildings, make the site safe and remove these eyesores from South Promenade.”

The Palm Beach was damaged by fires in 2014 and 2015, and the site has been the target of repeated vandalism.

Create Construction was granted planning permission last August to build a 130-bedroom hotel scheduled to be branded Hamptons by Hilton.

Councillors are being recommended to “make a secured loan of £4.5m to Create Developments (Blackpool) Ltd to facilitate the development of the 135 bedroom hotel to an agreed standard”.

A report adds: “This would result in the demolition of the burnt out properties and the development of a modern high quality hotel, enhancing the attractiveness of the area and providing modern facilities.”

If the loan is agreed, it is expected to be for a three-to-five year period after which it is possible the hotel would be sold on as an investment.

The loan would be granted with an 8.5 per cent interest rate.

The £450,000 purchase price of the site would be repaid to the Blackpool Housing Company in return for the transfer of the freehold of the site to the scheme’s other ‘first’ funder.

But the proposal has come under fire from Conservative group leader Coun Tony Williams who said the council was proposing to use “money they haven’t got to build a hotel at the wrong end of town.”

He added: “With new hotel schemes being looked at in Talbot Square and also the Winter Gardens it makes no sense at all to build a hotel in the southern end of town that would be in direct competition to these new ventures and our existing hotel offers.

“It would be closer for guests staying there to travel to St Annes than Blackpool.

“This area should be allocated for up-market permanent homes that would see people moving into the area and uplifting the local economy.”