Newcastle City Council has faced scrutiny over its financial involvement with the Crowne Plaza Hotel in the Stephenson Quarter, near Central Station.
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00:00Newcastle City Council has faced scrutiny over its financial involvement with the Crowne Plaza Hotel here in the Stephenson Quarter, near Central Station.
00:10Since 2013, the Council has provided substantial loans to Stephenson Hotel Ltd, totalling to approximately £39.5 million.
00:19These loans aim to develop the four-star hotel as a catalyst for regenerating the Stephenson Quarter area.
00:25The financial support included an initial £15 million loan in 2013, followed by £14.8 million in 2019 as part of a refinancing package,
00:35and an additional £1 million during the Covid-19 pandemic to assist struggling businesses.
00:41Despite these efforts, the hotel reported significant losses, raising concerns about its financial viability.
00:49In response to the mounting debt and to protect taxpayers' interests, the Council took ownership of the 251-bed hotel in early 2024.
00:57This move was intended to prevent a potential £25 million debt write-off if sold to a third party and to allow the Council to benefit from the hotel's future profits.
01:07Opposing politicians have criticised the Council's repeated loans to the hotel, questioned the transparency of the financial decisions
01:14and the prioritisation of funds, especially given the city's budget constraints and public service cuts.
01:20They argue that resources might have been better allocated to address pressing community issues.
01:25Council representatives defend the loans, stating that the funds were provided at no cost to taxpayers.
01:31They emphasise that the hotel has been a significant economic asset, creating jobs and contributing to the local economy.
01:38The Council say they remain committed to recovering the loaned amounts through the hotel's operations.