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Cash-strapped Derbyshire council's plan to turn County Hall into luxury hotel could cost £100m

Work to turn a Derbyshire council’s sprawling historic headquarters into a hotel and build a new base could cost more than £100 million.

Derbyshire County Council aims to move out of its historic Matlock headquarters in a former spa and move into a new eco, smaller building within the Bank Road grounds.

Reports published by the authority detail the potential cost of each scheme, with the new eco office for 500 employees potentially costing £34 million, the hotel conversion costing £72 million and the creation of homes in a block on the site costing £26 million.

They detail that its new HQ could be open by 2027 but advisors recommend the opening of the new office and the hotel conversion are synced up, with the hotel conversion potentially being open by 2029.

The move away from its historic headquarters comes as the cost of maintenance (£57 million), a repairs backlog (£56 million) and the price of decarbonising County Hall (£59 million) total £172 million.

Annual costs are around £3.3 million a year, it is estimated.

It would look to avoid the bulk of these costs by handing it over to a hotel operator, though some essential repairs would be required in the years before its potential transfer and any agreement reached over its continued upkeep – which would form part of the deal.

Now, within the authority’s budget for the next year, the county council has outlined plans to spend £20 million over the next three years on the planned move from its headquarters, conversion into a hotel and the building of a new HQ.

So far it has set aside £375,000 to be spent over the next financial year for preparation work on a business case for the combined project, including appointing property agents, legal advisors, finding ways to bridge the funding gap and carrying out traffic and travel surveys ahead of a planning application to Derbyshire Dales District Council.

Meanwhile, in the 2025 financial year, it looks to spend £15 million, followed by a further £5 million in 2026 – totalling more than £20.5 million over three years.

READ MORE: https://www.questmedianetwork.co.uk/news/glossop-chronicle/derbyshire-council-taxpayers-are-set-to-pay-nearly-100-extra-a-year-with-the-countys-largest-authoritys-financial-sustainability-at-real-risk/

The council details that half of that £20.5 million would be funded through grants and half would be borrowed, and a small chunk from capital receipts from land sales.

It details in its budget report, to be discussed next week: “The vision for County Hall includes conversion of the principal listed buildings into a hotel, spa, conference facility and performance venue, together with residential accommodation and facilities for new businesses. 

“A key component of the vision is a low carbon, efficient building, providing new offices for the council, with scope to share space with public sector partners or commercial tenants.

“The direct benefits to the council will include significantly reduced operating costs, the provision of a modern, flexible workplace to support users, the potential generation of a capital receipt, and a major reduction in the council’s carbon emissions. 

“Wider benefits include a major boost to the local economy, support for local businesses, the creation of new jobs, and new residential accommodation to meet local demand. 

“The community will benefit from having access to spaces such as a renovated Winter Garden for events, leisure facilities and new landscaped gardens. 

“It will be a condition of any sale agreement that the listed buildings are enhanced and protected, and that the landscaped grounds are recreated. 

“The soft market testing exercise has already generated serious interest from hotel operators and specialists in the conversion of listed buildings. 

“More expressions of interest are expected as our advisors continue to target potential investors, developers and operators. 

“The council’s commitment to the project, evidenced by the commissioning of a business case, has provided confidence to the market that the council is committed to this strategic project. 

“Further technical, legal and financial support is required to prepare and take the opportunity to the market. 

“This will include a planning pre-application, development of the design for the new offices, environmental and biodiversity due diligence of the site, assessment of the impact on local roads, and the preparation of a full technical pack for potential bidders and draft contract documents.”

The planned hotel conversion is expected to create 130 full-time jobs, boost the Derbyshire economy by £147 million and the Matlock economy by £56 million, along with £1.2 million a year in extra council tax.

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