The future of Perth and Kinross Council’s ambitious plan to transform its former offices at 1-5 High Street into a luxury hotel has been thrown into disarray following the collapse of the chosen developer, Henley Homes, with debts exceeding £67 million.
Five years ago, the council selected Henley Homes, a London-based firm, as the preferred bidder for the project. The redevelopment was envisioned to breathe new life into the historic High Street building, creating jobs and boosting the local economy. Now, with Henley Homes in liquidation, the council is left to grapple with the project’s uncertain future. Significant Financial Troubles Plague Former Developer
The liquidator’s report, available at Companies House, details the extent of Henley Homes’ financial difficulties. The staggering £67 million debt includes £36 million related to the failure of its construction arm, £9 million earmarked for cladding remediation, and a substantial £2.38 million payout to a former director following a contentious exit from the company. In addition to these major liabilities, Henley Homes also owes over £350,000 to HMRC and more than £294,000 in redundancy payments to former employees. Unsecured creditors are expected to receive a mere fraction of what they are owed. New Company Steps in with Existing Connections
Despite the setback, a new company, Lock Terrace Ltd, has submitted a planning application to convert the High Street property. Interestingly, Lock Terrace Ltd is led by two former Henley Homes officers, raising questions about the connection between the two entities. Originally, it was believed that the hotel, to be named The Capital, would operate under the umbrella of the Rogue City Hotel Group, another company linked to Henley Homes. However, recent reports indicate that Rogue City Hotel Group is also facing liquidation. Further complicating matters, the Dunalastair Hotel Suites at Kinloch Rannoch, another property connected to the group, has entered administration.
The council’s initial decision to sell the B-listed building for a nominal £1 while simultaneously leasing office space at Pullar House drew criticism from some quarters. Adding to the controversy is the £1.9 million in heritage funding intended for the project, which the council is expected to cover. Council Remains Hopeful Despite Developer’s Insolvency
Perth and Kinross Council has stated it is aware of the ongoing situation with Henley Homes and expects to review Lock Terrace Ltd’s planning application later this year. While the future of the High Street hotel project remains uncertain, the council’s commitment to its eventual completion suggests a determination to overcome the challenges presented by Henley Homes’ financial collapse.
This situation has left many local residents concerned about the potential impact on Perth city centre. The promised 200 jobs and the projected £1.12 million annual boost to the local economy are now in jeopardy. The council faces the difficult task of balancing its desire to revitalize the High Street with the need to ensure a responsible and financially sound approach to the project’s future.
Local businesses and community members are watching closely as the council navigates these unforeseen circumstances. The hope remains that a viable solution can be found to bring the long-awaited hotel project to fruition and deliver the promised benefits to the Perth community. The unfolding events serve as a reminder of the complex landscape of property development and the potential risks involved, even for projects backed by local authorities.
The council’s previous head of planning and development, David Littlejohn, had lauded Henley Homes as a high-calibre investor, highlighting the supposed attractiveness of Perth for development outside of Edinburgh and Glasgow. This confidence now appears misplaced in light of Henley Homes’ financial demise. The situation raises questions about the council’s due diligence process and its assessment of Henley Homes’ financial stability. Residents are likely seeking reassurance that future development projects will be subject to more rigorous scrutiny.
The involvement of former Henley Homes officers in Lock Terrace Ltd adds another layer of complexity to the story. The council’s upcoming review of Lock Terrace Ltd’s application will likely involve careful consideration of the new company’s financial standing and its ability to deliver on the project’s promises, given the previous developer’s failure. The community will be watching closely to see whether the council’s decision ultimately benefits Perth and Kinross.
Five years ago, the council selected Henley Homes, a London-based firm, as the preferred bidder for the project. The redevelopment was envisioned to breathe new life into the historic High Street building, creating jobs and boosting the local economy. Now, with Henley Homes in liquidation, the council is left to grapple with the project’s uncertain future. Significant Financial Troubles Plague Former Developer
The liquidator’s report, available at Companies House, details the extent of Henley Homes’ financial difficulties. The staggering £67 million debt includes £36 million related to the failure of its construction arm, £9 million earmarked for cladding remediation, and a substantial £2.38 million payout to a former director following a contentious exit from the company. In addition to these major liabilities, Henley Homes also owes over £350,000 to HMRC and more than £294,000 in redundancy payments to former employees. Unsecured creditors are expected to receive a mere fraction of what they are owed. New Company Steps in with Existing Connections
Despite the setback, a new company, Lock Terrace Ltd, has submitted a planning application to convert the High Street property. Interestingly, Lock Terrace Ltd is led by two former Henley Homes officers, raising questions about the connection between the two entities. Originally, it was believed that the hotel, to be named The Capital, would operate under the umbrella of the Rogue City Hotel Group, another company linked to Henley Homes. However, recent reports indicate that Rogue City Hotel Group is also facing liquidation. Further complicating matters, the Dunalastair Hotel Suites at Kinloch Rannoch, another property connected to the group, has entered administration.
The council’s initial decision to sell the B-listed building for a nominal £1 while simultaneously leasing office space at Pullar House drew criticism from some quarters. Adding to the controversy is the £1.9 million in heritage funding intended for the project, which the council is expected to cover. Council Remains Hopeful Despite Developer’s Insolvency
Perth and Kinross Council has stated it is aware of the ongoing situation with Henley Homes and expects to review Lock Terrace Ltd’s planning application later this year. While the future of the High Street hotel project remains uncertain, the council’s commitment to its eventual completion suggests a determination to overcome the challenges presented by Henley Homes’ financial collapse.
This situation has left many local residents concerned about the potential impact on Perth city centre. The promised 200 jobs and the projected £1.12 million annual boost to the local economy are now in jeopardy. The council faces the difficult task of balancing its desire to revitalize the High Street with the need to ensure a responsible and financially sound approach to the project’s future.
Local businesses and community members are watching closely as the council navigates these unforeseen circumstances. The hope remains that a viable solution can be found to bring the long-awaited hotel project to fruition and deliver the promised benefits to the Perth community. The unfolding events serve as a reminder of the complex landscape of property development and the potential risks involved, even for projects backed by local authorities.
The council’s previous head of planning and development, David Littlejohn, had lauded Henley Homes as a high-calibre investor, highlighting the supposed attractiveness of Perth for development outside of Edinburgh and Glasgow. This confidence now appears misplaced in light of Henley Homes’ financial demise. The situation raises questions about the council’s due diligence process and its assessment of Henley Homes’ financial stability. Residents are likely seeking reassurance that future development projects will be subject to more rigorous scrutiny.
The involvement of former Henley Homes officers in Lock Terrace Ltd adds another layer of complexity to the story. The council’s upcoming review of Lock Terrace Ltd’s application will likely involve careful consideration of the new company’s financial standing and its ability to deliver on the project’s promises, given the previous developer’s failure. The community will be watching closely to see whether the council’s decision ultimately benefits Perth and Kinross.