£15m Scarborough Hotel Plan Shelved

Proposals for a luxury hotel on the site of Scarborough's former indoor swimming pool on Ryndle Crescent wont be going ahead.

Local businesses man Nick Thomas MBE and his wife Sandra say they have withdrawn their £15m investment to build a new ‘4-star +’ HQ Hotel on Scarborough’s North Bay old Indoor Pool site. 

Explaining the couple’s decision, Mr Thomas commented;

“Sandra and I wanted to create a destination Hotel for Scarborough.  In the style of Leeds’ popular Dakota Hotel, our HQ Hotel would have complemented and not competed with the town’s existing accommodation.

Our Hotel would have been the perfect ‘centre piece’ for the North Bay Masterplan, and as Scarborough’s only high-quality 4-star + offer, it would have attracted more affluent visitors to the town. 

In December 2021, Scarborough Borough Council (SBC) independently determined a site valuation of £318,500 for a 100-bedroom hotel and £1,110,000 for car parking. We offered £1,000,000, which fulfilled the SBC’s obligation to achieve ‘best value’.  The deal was confirmed by Cabinet on 26th July 2022 and cleared by SBC’s scrutiny committee on 31st August 2022.

The deal was then submitted to North Yorkshire County Council (NYCC) for Section 24 clearance under Local Government Reorganisation rules. 

On 24th October SBC officers forewarned me that NYCC intended to oppose the deal on grounds of ‘best value’ at its 25th October meeting.

We were not prepared to debate the specious notion that paying £1,000,000 for a site valued at £318,500 to deliver a flagship asset for Scarborough, was anything but ‘best value’. We therefore withdrew our offer before NYCC could oppose it, and so unfortunately a unique opportunity for Scarborough has been halted by what appears to be a political power play.”  

Mr Thomas wanted to build a 100-bedroom hotel, including several suites, both with and without sea views.

On the ground floor there would be a bar, restaurant and meeting space.

It was claimed the hotel would have created around 120 new jobs, provide an estimated 70,000 additional overnight bed spaces per year and contribute an extra £3.4 million to the local economy.

In July this year Scarborough Borough Council's cabinet approved the sale of the swimming pool land to HQ Hotels, but the deal was subject to county council approval.

Scarborough Borough Council will cease to exist in April next year when along with the county council it will be abolished and replaced with a single unitary council for the whole of North Yorkshire. As part of the transition arrangements the government put in place a special direction earlier this year giving North Yorkshire County Council power over any large financial transactions that borough or district councils want to make. The legislation restricts district and borough councils from entering into revenue contracts and disposals of land in excess of £100,000 or “capital contracts” exceeding £1m without the consent of the county council’s executive.

The sale of the swimming pool land was scheduled to be discussed by the County Council's executive today but the item was withdrawn from the agenda and no discussion took place. The report presented to the county council's executive asked councillors :

"to consider whether or not they wish to grant consent under Section 24 of the Local Government and Public Involvement in Health Act 2007 so
that Scarborough Borough Council may dispose of the former indoor pool and its associated car park site"

The report made no recommendation but did outline a number of "issues for consideration" including:

1. Does the council support a change of use of the asset?
2. Would the Executive seek to maximise financial return in any sale or would it wish / be prepared to support specific alternative uses such as those set out in the North Bay Masterplan?
3. If the Executive is content to support alignment with the North Bay Masterplan, is the Executive sufficiently satisfied with the details of this particular proposed sale as negotiated?

The report also highlighted that:

"It is the view of SBC officers that the proposal from SBC complies with the relevant legislation for the disposal of a council asset"

Scarborough Borough Council Leader, Councillor Steve Siddons said;

“The way that the new Unitary authority has used its powers, has led to a lack of confidence by a major investor. This has resulted in them withdrawing their investment in this Borough and an investment that delivered transformational opportunities creating a new hotel, 150 jobs enjoying the Living wage and a training academy as well as a high quality amenity for visitors to this tourist town.

At a time when every Local Authority is searching for ways to deliver regeneration and improve residents’ life chances, North Yorkshire’s behaviour makes no sense.

The real losers here are the residents of this Borough with opportunities for jobs, training and a high quality hospitality offer being thrown to the wind.

Scarborough Borough Council has a number of transformational projects in the pipeline and I urge North Yorkshire to work with us to deliver the regeneration investment that this Borough badly needs.”

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