Essex

Sale of £1m hotel plot put on hold by Basildon Council

Proposed hotel site
Image caption The plot of land earmarked for the hotel lies between a golf course and a main road

A deal in which a council offered to sell a million-pound plot of land to a developer for £1 is to be put on hold.

Basildon Council had originally purchased the plot for the development of a four-star hotel.

The council's new administration is to halt the sale plans, as well as £500,000 for a new road, after the ruling Conservative group lost control.

The developer, Bran Investments, said the dramatic price reduction was the only way to make the scheme viable.

The council's independent new deputy leader, Kerry Smith, said: "The brakes are to be applied to this pound-shop hotel to defend the public purse.

"We will go back to square one and do this right."

Image caption Deputy council leader Kerry Smith said they would go back and "do this right"

In March 2017, the council's cabinet approved the purchase of the 2.1-hectare site at Clay Hill Lane for £1.025m and a bidder was sought to develop a hotel.

Documents obtained by the BBC, reveal 26 parties showed an initial interest and four financial offers were made.

Bran Investments made the highest offer of £1.17m, plus a £250,000 contribution towards an access road.

It was selected on the basis it had proof of funds and met the council's aspirations for the site.

However, leaked documents from a closed meeting in February reveal Bran revised its offer after its own study showed "anticipated room rates were below what had been previously estimated".

Councillors then approved a purchase price of £1 and to meet the full £500,000 cost of building the access road.

Image copyright Empics
Image caption The hotel is proposed for a site on the outskirts of Basildon

Councils are able to sell land for less than it is worth provided the undervalue does not exceed £2m.

Another feasibility study also identified a shortfall in value against the construction costs.

Emails between Bran, the council and surveyors GVA from June 2018, obtained under the Freedom of Information Act, indicate the authority had rejected a revised offer from Bran.

Subsequent negotiations resulted in the £1 sale price and the council meeting the full cost of the road.

How this came about is unclear as the emails have been heavily redacted.

Image caption Former council leader Andrew Baggott defended the original proposal

Andrew Baggott, Conservative group leader and the council leader when the deal was struck, said the £1 sale was not for the disposal of the land, but its use.

"We are not giving it so that someone else makes a profit. That site is there to be a hotel and it will be there as a hotel unless the council decides otherwise."

Bran Investments, which is owned by the Billericay-based care home specialist Hallmark Group, said it respected the decision and would work with the council "to find a suitable route forward".

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