Council flogs off hotel for less than £29.8m it cost to buy

CROYDON IN CRISIS: While one Labour MP dines out with a notorious property lobbyist whose employees include the council’s deputy leader, one of the firm’s clients has snapped up the Croydon Park Hotel at a bargain basement price. EXCLUSIVE By STEVEN DOWNES

Stuart King: in charge of council property sales. While working for a property developers’ PR firm

The council’s Labour leadership is heading for another crisis of its own making, after the controversial sales of two multi-million-pound town centre properties.

One, the Croydon Park Hotel,  is understood to have been flogged off at a massive loss, bought by a company that is, or has been, represented by the Terrapin Group, the property PR firm run by Peter Bingle.

A senior account director at Terrapin is Stuart King.

This is the same Stuart King who is the deputy leader of the council and the cabinet member for  “Croydon renewal”. According to the council’s website, at the top of the long list of responsibilities of King’s cabinet brief is “assets management”. This includes the sale of tens of millions of pounds’ worth of Brick by Brick sites and other public property. Including the Croydon Park Hotel.

There is no suggestion of any wrong-doing on King’s behalf. All the proper declarations of interest have been made, and King has assured Inside Croydon personally that he has recused himself from all meetings and briefings where his day job with Bingle might have come close to his public responsibilities as a Croydon councillor.

But to be able to regard any of this as acceptable conduct at Croydon’s crisis-hit council is either hugely naive or monumentally stupid. Or maybe King and his council colleagues really do believe that the Croydon public are stupid – after all, this is the same Croydon Labour group that for six years gave Paul Scott, the director of a firm of architects,  a “special dispensation” so that he would never have to declare any interests while he was chair of… the planning committee.

At Monday night’s cabinet meeting, King did at least declare an interest. Item 5 on the agenda was “Property disposal update as part of the interim asset disposal strategy”, also known as the bankrupt borough’s fire sale.

King’s head was down, perhaps to read a prepared statement from a tablet or phone, but it made him look as if he was at monastical prayers, possibly saying a mea culpa.

“My declaration of interest is up to date,” he told the meeting.

Prayer time: Cllr King reading his declaration of a ‘perceived’ conflict of interest

“On Item 5 of the agenda, I have what I perceive to be a conflict of interest arising from my employment.” Our italics. For emphasis.

“I sought the advice of the interim monitoring officer and I accept his advice that I should withdraw from the meeting when we get to that item on the agenda.”

Item 5 was, in fact, the very next item on the agenda, and King duly shuffled out of the meeting. The loud crashing noise to be heard around the Town Hall Chamber as he did so was the sound made by the slamming of the stable door six months after Red Rum had galloped off over the horizon.

King was made redundant during lockdown late last year, and he has a mortgage and young family to support. Evidently, the £42,044.80 he receives in special responsibility allowances from the council for his role as deputy leader is insufficient to that end, and so he sought a new job.

He started working for Bingle’s Terrapin Group in April, when Croydon Council’s property disposals strategy which he was overseeing, including the sale of the Croydon Park Hotel, had already been set in motion. It could be argued that, from that moment, King’s position as a council cabinet member was utterly untenable.

Cheers: Peter Bingle possibly toasting the latest property deal in Croydon

Bingle is a former Tory councillor in Wandsworth who has been described as “a sleazebag lobbyist”.

In 2011, Bingle boasted, “I probably sold more council properties than anyone else.”

His company’s current client list includes some of the bigger housing interests operating in London – the likes of Bellway, Fairview New Homes and LaSalle Investment Management – while former clients include Barratts, Delancey and LendLease.

Part of Terrapin’s schtick is to offer influence on planning matters to developers.

“The politics of planning in London has never been so prone to risk,” Terrapin’s website states.

“Terrapin understands the London political scene. Our consultants are experienced advisers who are able to de-risk large, complicated schemes at the start of the planning process and then work with clients to ensure a successful outcome.” There were more subtle come-ons in Victorian era brothels.

Stuart King is just one of a handful of serving councillors from London boroughs that Bingle has on his payroll. The others include Peter John, the former leader of Southwark Council (where LendLease has done such good business over the past decade…).

Steve Reed’s Bingle mingle: how Guido Fawkes broke the dinner story last week

Last week, the Guido Fawkes website reported that Bingle was wining and dining Steve Reed OBE, the Progress MP for Croydon North.

Bingle’s dinner invite described Reed in glowing terms from the time when he was the leader of Lambeth Council.

Reed was “supportive of development”, Bingle said, adding that “he worked well with developers and won their respect and trust. Steve changed Lambeth for the better”. Which is nice.

Reed, of course, is Labour’s front bench spokesperson on local government. The timing of his “Bingle mingle”, just as the vultures are circling around Croydon Council ready to pick the juiciest bits of meat from the bankrupt borough’s carcass, is, of course, purely coincidental.

Councillor King, meanwhile, has assured Inside Croydon that he did not attend last week’s Bingle-Reed dinner.

The head-on collision between King’s day job and his public responsibilities as a cabinet member at the cash-strapped council were entirely predictable. Indeed, Inside Croydon actually predicted Bingle’s interest, on behalf of major development clients, in Croydon Council’s fire sale of properties.

Much of the hard detail on the property disposals at Monday night’s council cabinet meeting was discussed only in secret, in the “Part B”, section of the meeting, with attendees, including Labour and Conservative councillors, sworn to secrecy.

The details have also been seen by the government-appointed improvement board who have previously stepped in and blocked commercial deals negotiated by the council when they have considered them to represent poor value to the Council Tax-payers –  such as the £100million discount stitch-up proposed on the sale of Brick by Brick. 

Going cheap: the Croydon Park Hotel

It is therefore of some assurance that they appear to be allowing these sales to go through, helping to drive down the council’s £1.5billion mountain of debt a few million at a time.

What is already in the public domain is that the valuations of the College Green site – where Brick by Brick was granted planning permission for 421 flats – and Croydon Park Hotel were carried out by Royal Institution of Chartered Surveyors-registered surveyors, while the council relied on a single sales agent, Savills, to market the properties.

The College Green site, which with its existing planning permission might be expected to yield more than £100million in the eventual sales of flats, attracted bids from six prospective buyers, all of the bids “over £15million”, according to King’s cabinet colleague, Callton Young. One lucky developer may have just ensured their fortune over the next five years.

Savills received 72 enquiries about the hotel site, which was whittled down to a shortlist of eight bidders, all of whom offered more than £19.5million. According to Young, the value of the offers “were increased because of competition”.

Inside Croydon understands that the eventual sale price of the hotel is less than Croydon Council paid for the property when they bought it in 2018.

The council paid £29.8million for the freehold of the loss-making hotel – £5million more than the then asking price, and according to industry sources, £10million more than the property had been offered to other buyers just a few months earlier.

The council’s purchase of the hotel was bulldozed through Town Hall procedures three years ago without proper scrutiny or due diligence – which should have exposed how the leaseholders, a hotel management company, was already a struggling business.

‘The price is right’: Callton Young defends the low-ball sale of the Croydon Park Hotel

Young, the cabinet member for no resources and little financial governance, told Monday’s meeting that the hotel had been sold for “a better price than anyone might have anticipated”.

He said, “The price is right,” and proved himself to be a crap Leslie Crowther impersonator. “We’re paying down our credit card,” Young said, calling the asset sales “a significant step for us in Croydon”.

“We’re making headway,” Young said, without mentioning the egregious links between the property lobbyists where his cabinet colleague, King, works and the people who had purchased the hotel at a bargain basement price.

The next step could be a planning application to redevelop the Croydon Park Hotel site into flats. If that is the case, we can suggest just the man to help get the money-spinning scheme through…

“Terrapin,” says the company’s website, “has a superb track record of helping our clients achieve successful planning consents right across Greater London. If you would like to discuss a potential assignment please contact : peter.bingle@terrapingroup.co.uk.”

Come on down! The price is right!

Read more: Council deputy leader gets new job working for lobbyists
Read more: Administrators accuse council of forcing hotel out of business
Read more: Conflicts of interest, incomplete contracts, unlawful payments


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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11 Responses to Council flogs off hotel for less than £29.8m it cost to buy

  1. Ian Ross says:

    The price is right. Right down the pan where this rabble belongs. Where is the accountability for the excessive price paid and the massive loss to Croydon’s tax payers? You couldn’t make it up!

    • The accountability for the over-priced purchase is in the Report In The Public Interest and subsequent “Penn Report” which led to Tony Newman and Simon Hall being suspended from the Labour Party and standing down from the council. That, as we understand it, is a disciplinary process still on-going.

      As for the loss being incurred on the sale of the hotel, that is a new and separate matter. Thing is, if the “market value” of the hotel in 2018 was actually £25m, and the council has managed to sell it in 2021 for, say, £24m, when there is no real hotel business at the moment due to covid, then they might have got the price right… The loss is then all a matter related to the over-priced purchase in the first place.

      But the site is probably looked on now for development, rather than as a hotel going concern, and that may mean that Croydon will get barely £20m for it. It will, at least, save the council £610,000 per year in ongoing costs.

      • Ian Ross says:

        Thank you for the explanation. I guess the real issues are how it was allowed to happen and what prevents a recurrence. “Strong leader” is a Putinesque term meaning “I do what I like and you don’t question”. Truly appalling in a 21st Century democracy. Suspension from the Labour Party seems little punishment.

        • Suspension from the Labour Party is not a punishment. It’s an administrative move while the party decides what disciplinary action, if any, it intends to take. It is getting on for a year now, with no announcements at all on hearings or investigations, so they are probably hoping that if they leave it for long enough, everyone will just forget and the whole thing will simply drift away.

          That there has been no formal inquiry or action from other bodies – beyond the damning reports from the auditors – is because the Tories local government minister, “Big” Eric Pickles, did away with district auditors and the powers to levy charges against council employees and councillors where appropriate.

          Which has left us all in a bit of… a Pickles.

  2. This is what PR companies in the property sector do – they recruit people with inroads to local authorities – if you are a PR company, why wouldn’t you? In Kings case he was probably searched out as he was on the job market.

    This requires council leaders to be on the case. The previous administration with Fisher had two members of the Croydon planning committee who were employed by PR company servicing the development sector. They sat on the committee for almost a year before somebody (me) brought it to Fisher’s attention and he told them to resign the committee.

    Ali must do the same. I’m sure King has done nothing wrong but he needs to distance himself from anything to do with property in the council.

    Let’s not forget the hotel was originally bought by our ‘strong leader’ who essentially signed off the transaction himself. One very expensive mistake and a grossly poor business decision that he was not qualified to make.

  3. AJ says:

    How is it remotely possible for Croydon Council to pay over the asking price for anything?

    I assume they were in a bidding war, but has there been any public confirmation?

    • There was no bidding war. Just Tony Newman playing Billy Big Bollocks with millions of pounds of public money.

      • AJ says:

        How was that even legal? What sort of procurement rules allow that kind of wilful misspending? A £5m bung with no scrutiny?

        • It sort of wasn’t legal (see Grant Thornton’s Report In The Public Interest this time last year; just search for it on the site), but since Eric Pickles removed District Auditors, there’s no real mechanism to impose old-style surcharging and the like.

  4. Nick Davies says:

    Nice Rotten Boroughs… keep up the good work!

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