"Cash-strapped" city council in secret talks to buy Coombe Abbey Hotel

[dutchman]

The deal, which would be worth millions, could be agreed behind closed doors



Coventry City Council is in secret talks to buy Coombe Abbey Hotel in a deal which would be worth millions of pounds.

The local authority will meet to discuss the deal behind closed doors during the private part of a full council meeting scheduled for Tuesday.

Cllr Jim O’Boyle, the council’s cabinet member for business, has confirmed to the Telegraph that the purchase of the hotel will be discussed as part of the private agenda item headed ‘Project CAP’.

He also said the exact value of the deal being discussed could not be revealed ahead of completion due to legal restrictions on the council.

The local authority is already the freehold owner of the hotel, which means they own the bricks and mortar, but the council is now discussing the purchase of the property’s lease - essentially the hotel business.

Coventry City Council also owns the surrounding country park.

The hotel is currently owned by No Ordinary Hotels Ltd and Coombe Abbey Park Ltd, both headed by businessman Gordon Bear.

Cllr O’Boyle told the Telegraph: “Yes we are discussing the potential purchase of Coombe Abbey Hotel. Yes it is due to be discussed as part of private business at full council.

“We are already the freehold owners and we have been for many years. We are only just realising that asset now.

“In the late 1980s / early 1990s we did a deal with the current owner Gordon Bear because it was a Grade 1 listed building and it was costing us money.

“It was dilapidated. It had no roof and was falling down. We had responsibility to maintain it.

“But I believe it is now an asset rather than a liability.”

He added: “It will give us revenue, something close to a 10 per cent return.

“No other investment we come across would net that kind of return for the taxpayer.

“We believe it’s a good return for the taxpayer.”

Asked if the council would be involved in the running of the hotel, Cllr O’Boyle said: “The council will not be running the hotel.

“We will be the one and only shareholder, but it will be run on our behalf.

“There is already a team running the hotel and we would like to retain that team. We would appoint someone to run it on our behalf.

“The council has no business running hotels and that’s why we would get someone to do it on our behalf.”

[rebbonk]

I'm totally against this. Didn't the council bail the place out in some way a few years back?

If the council are to go ahead with this, I hope that they employ a decent firm to do the due diligence. - We need someone far smarter than the average councillor to cover our corner.

[dutchman]

I'm totally against this. Didn't the council bail the place out in some way a few years back?

Yes:

It comes after the council four years ago bought out the then struggling hotel’s £6.5million bank loan. The council took over as mortgage lender to the privately owned medieval-themed hotel, which could then borrow at much cheaper interest rates.

At the time, Labour council leaders assured council taxpayers the hotel’s post-credit-crunch problems, when profits halved, were temporary, and the loan would be repaid.

While the details were private in 2013, it was understood Clydesdale Bank had been about to call in the hotel’s loan of around £6.5mlllion amid concerns about repayment; and that loans had been taken out for a 39-bed extension prior to the 2008 financial crash.

The then Labour councillor Lynnette Kelly had told the council it was a quite different scenario to the local authority’s controversial £14million bank loan buyout in private of the Ricoh Arena company earlier in 2013, when the council argued it was protecting its investment in the stadium company as a shareholder.

She told the council at the time: “It is not a failing company. It’s performing well. However, the financial situation we have at the moment means the loan needs to be refinanced.”

The deal would protect rent payments and the council’s potential return on any sale, she had claimed.

[Melisandre]

I am sure they can afford it with having all that money they fined the people on the bus gate thread which they refuse to give back to them . a law for one and a law for another

[dutchman]

The council claims it does not have enough money to maintain basic social services at their current level yet is somehow able to find £11m from its magic money tree to purchase a hotel.

[dutchman]

Secret council deal to buy Coombe Abbey Hotel branded "a disgrace"



Former Labour MP and councillor Dave Nellist, who is now a passionate anti-cuts campaigner, has branded the potential purchase “a disgrace” when services to some of the city’s most vulnerable residents were being axed .

He told the Telegraph: “Why do the deal in private? Discuss it in public and show us the figures.

“I guess the deal will include writing off at least some of the £6.5million loan they made to the hotel a few years ago.

“It will take years to get a return on this purchase, but the pain of the cuts to services is here and now.

“That’s where I think a proper Labour council should be focusing its time, energy and resources.”

Private talks about the deal will take place as anti-cuts campaigners gather outside the Council House to voice opposition to £600,000 of cuts to school transport which has hit hundreds of disabled children in the city.

Mr Nellist added: “To spend 20 times what they are saying they can’t afford to retain school transport for some of the most vulnerable children to buy a luxury hotel is frankly a disgrace.”

[Melisandre]

The council claims it does not have enough money to maintain basic social services at their current level yet is somehow able to find £11m from its magic money tree to purchase a hotel.

Years ago the public could openly examine the councils accounts not sure if this still stands.

[dutchman]

Coombe Abbey Hotel purchase WILL go ahead in deal branded a 'Fawlty Towers farce'



Coventry City Council will go ahead with controversial plans to buy Coombe Abbey Hotel in a deal branded by the opposition as a “Fawlty Towers farce”.

The sale was discussed during the private part of a full council meeting today under an agenda item called Project CAP .

Unconfirmed reports put the price tag at £11million.

Cllr Jim O’Boyle, Labour’s cabinet member for business, confirmed that the council had voted to go ahead with the purchase of the hotel business.

Speaking to the Telegraph this evening, he said: “Coventry Council will now be the sole shareholder of the Coombe Abbey Hotel which means we will generate 10% return on the investment.

“This is a serious amount of money and it will be a really good way of investing in services going forward.

“We believe it is good value for money for the tax payer.

“Local government is still at risk of losing funding so this is a way that we can make our own revenue going forward - we are investing in a profit making business.”

The Conservatives have opposed the deal and hit out at the council for their handling of the issue.

Prior to the decision, the leader of Coventry Conservatives , Cllr Gary Ridley, issued the following statement: “Traditionally when the Labour administration discusses an item of private business there is a public report to accompany it with the confidential detail removed.

“It’s a great shame that on this occasion this process wasn’t respected and adhered to.

“It places the public at a disadvantage because they’re not given any insight into the decision and even now limits what I can say publicly.

“In an interview with the media the cabinet member acknowledges there is a level of risk to this deal.

“It raises questions about the state of the business, remedial work and whether a local authority should be involved in running a hotel at all.

“Just like Fawlty Towers this process has been a farce but I don’t see anyone laughing."

[dutchman]

Luxury Coombe Abbey Hotel set to get millions more of Coventry council taxpayers' money



Opposition leader, Conservative councillor Gary Ridley said: “I’m not sure what qualifies a local authority to run a hotel and they should never have purchased it in the first place.

“This loan is another example of poor leadership from this failing Labour administration which seems determined to put more taxpayer’s money at risk.

“They should ditch this Fawlty Towers fantasy as soon as possible and focus on their core mission of providing services to the people of Coventry.

“At the moment it feels more like a real life game of monopoly and it’s the people of Coventry who’ll pick up the tab.”

But Jim O’Boyle, Labour cabinet member for jobs and regeneration, said the Coombe Abbey Hotel buyout and loan arrangements were on track to bring a seven-figure return to the taxpayer.

He said a partnership with Go Ape to provide the high wires assault course would see revenues shared between Go Ape and the council owned hotel.

He added: “We will share in the overall profits of the business.”

[rebbonk]

The place is a money pit.