Procurement to be reopened for Bournemouth Hotel development

Posted on Thursday 24th May 2018

The Council has formally responded to the threat of legal challenge in relation to the hotel development adjacent to the BIC, made on behalf of two companies with existing hotels in Bournemouth.

The Council is satisfied that there is no basis for the claim, and that leave for judicial review would not be granted by the Courts.

Cabinet Member for Local Government Reorganisation and Economic Growth, Cllr Philip Broadhead said: “We stand wholeheartedly by the proposed model for the hotel development – the funding approach, site location and demand forecasts.  On that basis, we fully expect to proceed with the development.

“However, the argument made that the ‘rollback’ part of the procurement stopped other interested parties from bidding on the project has led to Cabinet agreeing to reopen the procurement process, so enabling other bidders to come forward.”

Cllr Broadhead continued, “Furthermore, as we enter a hugely intensive period of activity on local government reorganisation, we need Council resources focused on that, rather than dealing with distractions such as this.  Therefore, Cabinet today agreed to reopen the procurement, allowing us to re-advertise the opportunity and so test the market.  It is hoped that a new procurement process can commence quickly, enabling this important element of the town’s regeneration to proceed.

“I must stress, the recommendation to Cabinet is in no way a reflection on the quality of the bid being advanced and in fact just this past week, significant progress has been made on reaching a position that would have satisfied the Council’s previously agreed requirements.”

The final decision to appoint a preferred bidder and enter into the relevant contracts will be taken by Full Council once the new procurement process has concluded.

Regardless of the Cabinet decision this morning, in responding to the pre-action protocol letter received on behalf of Bespoke Hotels Ltd and Peel Hotels PLC, the Council reconfirmed that a careful process of procurement and decision-making has been followed, and that we are satisfied that the decisions made so far would be found by a Court to be lawful.  In fact, we consider the threat of judicial review nothing more than a scare tactic constructed as an attack on the decision-making process, via a large number of spurious grounds, aimed solely at disrupting the project.  Analysis within the claim is simplistic, with vague and unsubstantiated arguments throughout. 

We remain confident that the funding model is robust and represents the right approach.  Industry-backed projections demonstrate the investment will achieve financial return over its course, as well as raising the profile of Bournemouth as an international conference destination and thereby achieving additional benefits to the town’s economy. 

Therefore, the Council is satisfied that the financial model behind the development of the hotel is robust and that taxpayers’ money is not unreasonably being placed at risk.  It is projected that the earnings generated from the hotel will fully cover the base rent from the second year of hotel operations, and then increase.  Furthermore, the projected initial yield exceeds the target yield set down in the Council’s Asset Investment Strategy.

On other points, the legal frameworks by which the development is governed are clear and the Council is fully compliant.  We are confident we have the powers within various legislative provisions, to proceed with the development in this form, including the Local Government Act 2003 and the Localism Act 2011, as well as being fully compliant with relevant sections of the Local Government Act 1092 and The Town & Country Planning Act 1990.

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