Under Jo “We’re Not Stupid” Negrini, Croydon Council last month paid £29.8million to buy the Croydon Park Hotel – nearly £5million more than the asking price when the property was put on the market just weeks earlier.
Negrini, the council’s chief executive, reckons that the Croydon Park Hotel can make £1million a year for the Town Hall’s stretched coffers.
Trade press magazine Property Week reports that Croydon Council agreed a price with owners Evans Randall Investors that is £10million more than they paid for the hotel when they acquired it less than five years ago.
Evans Randall had put the hotel on the market in June this year for just £25million.
When Croydon Council announced the deal, it refused to state what price had been paid to buy the hotel. Property investment traders contacted by Inside Croydon suggested then that £20million might be towards the top end of the hotel’s value.
Croydon Council has used money borrowed from the Government’s Public Works Loans Board. Any money that Croydon might make from entering the hotel business will have to first pay off the loan and its interest.
The hotel, the council stated, will be “part of its drive to seek innovative ways to generate income for frontline services”.
The council’s press release said that the hotel purchase “is expected to generate around £1million net revenue per annum, helping to protect local services for residents. The purchase supports the council’s financial strategy as well as its aim to invest in the borough where possible”.
In 2017, the hotel’s owners sold it after it had made a loss in the previous six months’ trading.
This large-scale purchase by the local authority, using millions of pounds of public money, has never been discussed publicly by elected councillors in the Town Hall.
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