Agenda item

Further to Minute 93 of the Cabinet, the City Council considered a joint report of the Director of Property Services and Development and the Director of Finance which indicated that the Council has a long-held ambition to realise the delivery of high-quality new hotels within the city. To support the realisation of this ambition, the Council agreed in September 2019 to enter into the necessary property arrangements with Castlebridge to help bring forward a Hotel Indigo within the Friargate area of the city. The Council also agreed funding necessary for infrastructure and public realm provision around the proposed hotel site. As a result of these decisions, the Council has been able to enter into an Agreement for Lease with Castlebridge in relation to the site for the Hotel Indigo.

The report indicated that, in order to take forward the construction of the hotel, Castlebridge need to secure the necessary development financing. Their ability to do so has, unsurprisingly, been affected by the COVID-19 crisis over the past 12 months which has had a significant impact on the leisure and hospitality sector as well as all other sectors of the economy. Notwithstanding this, they have a private funding offer which, along with their own equity injection, will fund the majority of the cost of developing out the hotel.

A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposals. (Minute 113 below refers.)

This report therefore sought approval to enter into a repayable loan facility agreement with Castlebridge (for an amount that is set out in the private element of this report) in order to fund the development of the hotel. The terms of the loan will be finalised following a comprehensive due diligence process to ensure the Council’s position is suitably protected.

The Cabinet:

1)  Approved the Council entering into a loan facility agreement with Castlebridge for an amount that is set out in the private elements of this report to be used solely as development finance for the delivery of the hotel in Friargate, Coventry.

2)  Delegated authority to the Director of Finance (S151 Officer) and the Director of Law and Governance, following consultation with the Director of Property and Development Services, the Cabinet Member for Jobs and Regeneration and the Cabinet Member for Strategic Finance and Resources, to undertake the necessary due diligence and approve the terms of the loan funding agreement and, thereafter, enter  into any associated legal agreements that are necessary to give effect to the recommendations within this report.

3)    Delegated authority to the Director of Finance (S151 Officer) and the Director of Law and Governance, following consultation with the Director of Property and Development Services, the Cabinet Member for Jobs and Regeneration and the Cabinet Member for Strategic Finance and Resources, to manage the loan facility. The authority under this recommendation shall include the power to negotiate and agree subsequent variations to the terms of the loan facility.

RESOLVED that the City Council approves a loan for an amount that is set out in the private elements of this report to be added to the Council’s Capital programme as appropriate and used to provide a loan facility agreement with Castlebridge for the delivery of the hotel in Friargate, Coventry.

(Note: A vote on this was taken by name)