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Cash-strapped council could give £5.8m loan to turn empty buildings into new hotel

Cash-strapped Middlesbrough Council could give £5.8m loan to turn empty buildings into new hotel

By Lucy Richardson

Ray Mallon looking out onto Centre Square, Middlesbrough from the rooftop gallery of Mima art gallery with the Cleveland Centre on the far left of the picture

A CASH-strapped council is poised to hand over a loan of almost £6m to create a new hotel in a last ditch attempt to bring empty town centre buildings back to life.

A Holiday Inn Express with 138 bedrooms is earmarked for the Cleveland Centre in Middlesbrough with views over Mima art gallery and the historic central library.

The town centre is already served by two hotels, the Thistle on Fry Street and a Travel Lodge at Cannon Park.

To ensure the redevelopment at Cook and Endeavour House on Albert Road goes ahead – buildings which have been predominantly vacant for 20 years – Middlesbrough Council is acting as a bank by giving a secured commercial loan over eight years.

At its executive meeting on Tuesday members will be asked to follow the officers’ recommendations and approve the £5.8m loan to developers Ashall Projects Limited for the new hotel, which is expected to cost £12m to build and employ 100 staff.

Financial cuts totalling £85m will need to be made in Middlesbrough over the next five years, it has been estimated.

The town’s elected mayor Ray Mallon has also confirmed the loss of 300 council jobs this year, while another 300 will be transferred to other organisations contracted to carry out some council services.

A report prepared for Mr Mallon and his executive to consider next week stated: “In these times of significant budget cuts imposed on the council, investing such a significant amount of money into such a scheme would be a significant undertaking.

“However, it is clear that there is unlikely to be alternative resources available for the re-use of these buildings from either the private sector or Government-based regeneration funds.

“The proposal would appear to be the only feasible way by which these buildings will be brought back into use.”

It is just one of a series of major initiatives to be considered at the meeting.

Other proposals include the permanent closure of Southfield Road for the next phase of Teesside University’s campus and the management transfer of Mima art gallery to the university.

Mr Mallon said: “In challenging economic times, this council has been forced to transform the services it is able to deliver and the way it delivers them, and the impact of those cuts is hitting every part of the town.

“That is why it is more important than ever that we continue to invest in the sort of initiatives that will ensure Middlesbrough has a secure and prosperous future.”

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