Council to vote on loan for new hotel opening

A city council is being asked to approve the next stage of a regeneration project by providing a loan so a new hotel can open.

Gloucester City Council is being asked to confirm a decision taken in 2022 that it will provide the commercial loan of up to £4m to the management company of the city's new Hotel Indigo at the Forum.

The money will come from the Public Works Loan Board (PWLB) and will fund pre-opening costs and provide initial working capital, the authority said.

Council leader Jeremy Hilton said the loan would "ensure the hotel opens on the strongest possible footing" and without it, the hotel would be unable to open.

He told BBC Radio Gloucestershire: "The Forum is a big project and it's probably caused some of the problems for the council's finances because of the investment that's taken place but it will be a success.

"The Forum is a transformational development for Gloucester, and Hotel Indigo will be a flagship destination within it."

The decision comes after the city council applied to the government for a bailout of up to £17.5m in December as it struggles to balance the books - money which is yet to be guaranteed.

Costing £107m, The Forum is 142,000 sq ft of office space in the Kings Quarter area of Gloucester.

Alongside the city's first four-star hotel, the site includes more than 40 apartments and a multi-storey carpark with nearly 400 spaces.

The council, which will retain ownership of the hotel, said the arrangement is expected to deliver a strong long-term financial return for the local authority, especially as interest will be applied to the loan.

It also said it would benefit from guaranteed rental income of around £500,000 a year after 2027, with additional income expected through performance-linked dividends.

In December, GCC confirmed plans to regenerate the nearby Greyfriars Quarter, providing a new indoor market, a food hall and a performance and cultural venue.

Hotel Indigo is expected to open in February.

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