Questions asked over £10m council loan to stalled Sands Hotel development in Blackpool

Uncertainty remains over the future of a stalled hotel development on Blackpool seafront which received a £10m loan from the council.

The opening of the Sands Hotel on Central Promenade has so far been held up for more than two years due to legal wrangles.

Developer Peter Swann received £10m through his company Coolsilk from the council’s business loans fund in 2018 towards the project to build a 91-bedroom hotel initially expected to launch in 2021. The venue will also include the council’s Showtown Museum which is due to open on March 15, having also been delayed from June 2021.

Coun Paul Galley, leader of the Conservative group on the council, raised concerns at a meeting of the full council about the “big black empty building” due to become the Sands Hotel.

He asked: “The council made a loan of £10m to Coolsilk. When will it open and are interest payments being made on that building?”

Council leader Coun Lynn Williams said the council’s loan was secured but she could not give out any further information due to legal proceedings.

She told the meeting: “There is a legal dispute between the owner and his contractors. We are not involved in that so I can’t comment further. It is frustrating. The amount mentioned is secured. Those negotiations are ongoing and when everything is resolved we can give the information. We have taken all steps necessary to secure that investment.”

The council’s draft statement of accounts for the year ending March 31 2021, said: “At its meeting on 16th April 2018 the executive agreed to the provision of a £10m loan to Coolsilk. The loan is to facilitate the redevelopment of Palatine Building into a five-star Sands Venue Resort hotel. The loan, including interest, is repayable over 25 years and is secured against the completed development.”

Following the meeting, Coun Galley added: “Not only has the Labour council agreed the loan provision for this scheme, it cannot tell us when the hotel will open.

“I will continue to ask questions about this deal, all I do know at this stage is the loan is ‘secured against the completed development’ and we have a hotel that is definitely not completed sat empty in one of our prime areas of the Promenade.”