Controversial Hastings hotel cost could almost double to £13.6m

The budget of a controversial hotel building project in Hastings could be set to almost double.

On Monday (September 4), Hastings Borough Council’s cabinet is set to consider a report on plans to build an 84-bedroom hotel — to be operated by Premier Inn — at the former Cornwallis Street Car Park.

When first agreed in October 2019, the project was expected to cost around £7m to build out.

In this latest report, cabinet members are asked to back increasing the project’s capital programme budget to £13.6m.

The final say on this budget increase will come down to a full council vote, likely to be held later the same month.

According to cabinet papers, the council is already ‘committed’ to the building project, through an agreement signed in January 2021. This means failure to agree further funding could prove costly.

Cabinet papers say the project’s costs have risen partly as a result of new building regulations, which will require the hotel to incorporate low energy measures and reduced carbon emissions.

However, the £13.6m figure also includes a ‘significant contingency budget’; an exact figure for this has not been included in the publicly-available documents.

And the council says it has negotiated an ‘improved offer’ with Premier Inn, including: higher rent; a reduced rent-free period; and an extension to the date construction would need to be completed.

The council also says the value of the hotel as an asset (of which it will retain a freehold ownership) has increased since the project was first tabled.

The decision comes at a time when the council faces significant financial pressures.

To mitigate this, cabinet papers recommend that the project be partly funded through the sale of ‘surplus assets’ as a way to reduce borrowing costs associated with the project. The use of these funds will also require full council approval.

The council secured planning permission for construction of the hotel in February 2022.