Newspaper article The Journal (Newcastle, England)

Council Will Fund a Four-Star Hotel; Pounds 30m Loan Pays for Development

Newspaper article The Journal (Newcastle, England)

Council Will Fund a Four-Star Hotel; Pounds 30m Loan Pays for Development

Article excerpt

Byline: Adrian Pearson

CITY leaders are to borrow pounds 30m to build a four-star hotel in the centre of Newcastle, it emerged last night.

Newcastle Council says it has no choice but to borrow the cash if it wants to see the Stephenson Quarter regeneration project behind the Central Station go ahead.

Council leaders hope to create 2,200 jobs with work set to start early next year.

The jobs hope is, however, offset by news the council will lose 2,000 posts over the next four years as a result of a pounds 110m shortfall following the Government's spending cuts.

Leaders believe the pounds 30m borrowing is justified by the need to keep the city economy going during the nest few years.

City treasurer Paul Woods will lend a slice of the cash that's borrowed by the council to the developer, Silverlink Holdings, which will build the four-star hotel overlooking the River Tyne.

The building will then be handed over to the operator, Crowne Plaza, and the loan repaid.

The council will use the rest of the of the money to buy plots of land near the hotel site and kick-start work on buildings that will be sold on at commercial rates.

Council bosses say they have to contribute to the redevelopment of the Quayside as a key location for conferences.

Gateshead Council is currently trying to find funding for a conference centre to be built near the Balltic arts facility, on the other side of the Tyne. If Newcastle did not borrow the cash and hand it over to developers, it is feared the land would remain derelict for another decade at least.

Instead, construction is set to start in March 2011 with phase one due to be completed in the late summer of 2013.

In its entirety, the development includes the 251-bed four-star hotel, a 60-bed boutique hotel, business centre, exhibition space, commercial offices and 156 residential apartments.

David Slater executive director of environment and regeneration at Newcastle City Council, said: "This is one of the key development opportunities in the city centre, therefore Newcastle needs to grasp the opportunity to move things forward, working in partnership with developers. …

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