Ageas Bowl hotel 'could cost extra £10m'

The hotel under construction at the Ageas Bowl last month

The hotel under construction at the Ageas Bowl last month

First published in News

FEARS have been raised that a setback in the building of a taxpayer-funded luxury hotel could add a further £10m to the bill.

Work on a four-star 175-bed Hilton hotel at the Ageas Bowl, the home of Hampshire cricket, came to a dramatic halt two weeks ago after Denizen, the firm building it, went into administration.

The project is underpinned by public money from Eastleigh Borough Council.

But the director of a hotel firm, who opposed the council’s involvement, said he estimates that even if a replacement contractor can be found, the delays and costs could take the £30m project to £40m.

This claim has been refuted by the council.

And Leader Keith House said legal agreements were in place so that whatever the cost of the project, the council would be buying it for the same amount when it was complete so the taxpayer would not be affected.

Meridian Leisure was one of the companies that originally called for a judicial review into the use of taxpayers’ money in the project.

Managing director Moez Janmohamed said the Ageas Bowl was a complex project and that it was not simply a matter of bringing in another contractor.

He said whoever took over would have to re-assess everything, sorting out sub-contractors, which he estimated could take two to three months and increase the costs “That’s the additional costs with my experience of this scale of project – I’m adding 25 per cent, that’s to be expected,” said Mr Janmohamed.

“It’s a nightmare scenario.”

He said the project could end up being one of the most expensive hotels of its type in the country and questioned whether the council had made any guarantees on the loan to the lender.

In 2010 Meridian Leisure, along with Shire Hotels and MacDonald Hotels called for an investigation into the use of taxpayer’s money on the scheme, but it was thrown out and the trio withdrew their appeal.

The council has also bought the lease of the 167-acre site for £6.5m.

Last Friday it emerged that Denizen had plunged into administration with the firm pointing to “serious flaws” in the pricing of a number of the contracts by the previous management team.

Duff and Phelps has been appointed as administrators to identify if buyers can be found for the contract and the company’s assets.

Cllr House said a contractor was not yet in the pipeline, but said the banks, working with partners including the council, were in ongoing discussions to secure a contractor.

He said they hoped to retain the sub contractors that had been working on the building and that once a new contractor was found work could restart.

He disagreed about the potential extra cost, saying that parts of the structure were complete and only needed fitting out.

But he said it was impossible to put a figure on how much replacing Denizen might add to the project cost, but said this would not affect the council.

He said a contract was in place to acquire the building for a fixed rate of around £30m and the council expected to do that.

“This is an issue for the banks to consider how they get themselves out of the position they’re in,” he said.

Asked if the council had made any guarantees to the lender, he said: “We have a structure of agreements about what the council has agreed to do.

“We spent a great deal of time on legal agreements to make sure that the council is protected.

“The council tax payer is not at risk as a result of one contractor going into administration.”

Comments (19)

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8:25am Sat 19 Oct 13

Micle1974 says...

The council went with the company offering its services at the lowest price and paid the ultimate price because the company folded because it couldn't carry out the works at such a low price.
REMEMBER : You buy cheap then you buy twice!
It happens all the time, how many times do you hear of cheap stuff breaking.
Same with services, book a "cheap" entertainer, disco or bouncy castle for the kids party....don't expect them to turn up because they might get a better job offer after yours, or even realise that they can't do it for that price.
I hardly ever go for rock bottom price because I learned the hard way, shame the council always go rock bottom price with corners cut
The council went with the company offering its services at the lowest price and paid the ultimate price because the company folded because it couldn't carry out the works at such a low price. REMEMBER : You buy cheap then you buy twice! It happens all the time, how many times do you hear of cheap stuff breaking. Same with services, book a "cheap" entertainer, disco or bouncy castle for the kids party....don't expect them to turn up because they might get a better job offer after yours, or even realise that they can't do it for that price. I hardly ever go for rock bottom price because I learned the hard way, shame the council always go rock bottom price with corners cut Micle1974
  • Score: -1

9:05am Sat 19 Oct 13

derek james says...

Micle1974 wrote:
The council went with the company offering its services at the lowest price and paid the ultimate price because the company folded because it couldn't carry out the works at such a low price.
REMEMBER : You buy cheap then you buy twice!
It happens all the time, how many times do you hear of cheap stuff breaking.
Same with services, book a "cheap" entertainer, disco or bouncy castle for the kids party....don't expect them to turn up because they might get a better job offer after yours, or even realise that they can't do it for that price.
I hardly ever go for rock bottom price because I learned the hard way, shame the council always go rock bottom price with corners cut
a bit like those councils who invested their pensions in icelandic banks
[quote][p][bold]Micle1974[/bold] wrote: The council went with the company offering its services at the lowest price and paid the ultimate price because the company folded because it couldn't carry out the works at such a low price. REMEMBER : You buy cheap then you buy twice! It happens all the time, how many times do you hear of cheap stuff breaking. Same with services, book a "cheap" entertainer, disco or bouncy castle for the kids party....don't expect them to turn up because they might get a better job offer after yours, or even realise that they can't do it for that price. I hardly ever go for rock bottom price because I learned the hard way, shame the council always go rock bottom price with corners cut[/p][/quote]a bit like those councils who invested their pensions in icelandic banks derek james
  • Score: 1

9:07am Sat 19 Oct 13

What garbage says...

if the council insist that they will only spend £30m then no one else will do the work at a loss, so will never be built saving the council £30m and plenty o space for houses when the club finally goes bust. Perhaps the council knew this.
if the council insist that they will only spend £30m then no one else will do the work at a loss, so will never be built saving the council £30m and plenty o space for houses when the club finally goes bust. Perhaps the council knew this. What garbage
  • Score: 0

9:51am Sat 19 Oct 13

WILLIAM HAGUES TWIN BROTHER. says...

hasty meeting has been convened at the lodge of bodge.
hasty meeting has been convened at the lodge of bodge. WILLIAM HAGUES TWIN BROTHER.
  • Score: 4

10:27am Sat 19 Oct 13

ameliaS says...

Keith House is an astute politican who seems to be able to hoodwink the Eastleigh residents at election time. Can someone please remind me of his business credentials? The quote from him in this article is laughable.
Keith House is an astute politican who seems to be able to hoodwink the Eastleigh residents at election time. Can someone please remind me of his business credentials? The quote from him in this article is laughable. ameliaS
  • Score: 3

10:43am Sat 19 Oct 13

Eastleigh Bloke says...

What garbage wrote:
if the council insist that they will only spend £30m then no one else will do the work at a loss, so will never be built saving the council £30m and plenty o space for houses when the club finally goes bust. Perhaps the council knew this.
Quite.

If the council insist they will only buy the hotel for £30 million, but a builder can't be found who can deliver for £30 million, then what? Stalemate?

Where has the money come from that has paid for the work so far?
[quote][p][bold]What garbage[/bold] wrote: if the council insist that they will only spend £30m then no one else will do the work at a loss, so will never be built saving the council £30m and plenty o space for houses when the club finally goes bust. Perhaps the council knew this.[/p][/quote]Quite. If the council insist they will only buy the hotel for £30 million, but a builder can't be found who can deliver for £30 million, then what? Stalemate? Where has the money come from that has paid for the work so far? Eastleigh Bloke
  • Score: 2

1:13pm Sat 19 Oct 13

Turtlebay says...

Just say 'NO MORE MONEY AVAILABLE', take it or leave it!
Just say 'NO MORE MONEY AVAILABLE', take it or leave it! Turtlebay
  • Score: 0

1:24pm Sat 19 Oct 13

Positively4thStreet says...

HO HUM!! :0)
HO HUM!! :0) Positively4thStreet
  • Score: 0

2:26pm Sat 19 Oct 13

vpharm says...

Why are the council building something that is NOTHING to do with the taxpayers?
The only thing councils should build are leisure centres, schools & ROADS!

How many pot holes will all these MILLIONS of pound had fixed?
As usual a HUGE loss for the taxpayers & I bet promotion for the idiot that said this scheme was a good idea!
I say sack all those councillors & staff that backed this scheme WITHOUT any pay off for gross misconduct!
Why are the council building something that is NOTHING to do with the taxpayers? The only thing councils should build are leisure centres, schools & ROADS! How many pot holes will all these MILLIONS of pound had fixed? As usual a HUGE loss for the taxpayers & I bet promotion for the idiot that said this scheme was a good idea! I say sack all those councillors & staff that backed this scheme WITHOUT any pay off for gross misconduct! vpharm
  • Score: 2

2:29pm Sat 19 Oct 13

vpharm says...

I want to be a councillor & I have just had my common sence removed so will get in power then & then my first thing will be buy a company that makes chocolate teapots & then wonder why it is a failure!

Sack the idiots that said building this with TAXPAYERS MONEY & GUARANTEES is a good idea. I say arrest them for misconduct in public office (near fraudlent use of taxpayers money)!
I want to be a councillor & I have just had my common sence removed so will get in power then & then my first thing will be buy a company that makes chocolate teapots & then wonder why it is a failure! Sack the idiots that said building this with TAXPAYERS MONEY & GUARANTEES is a good idea. I say arrest them for misconduct in public office (near fraudlent use of taxpayers money)! vpharm
  • Score: 3

8:58pm Sat 19 Oct 13

Eastleigh Bloke says...

vpharm wrote:
Why are the council building something that is NOTHING to do with the taxpayers?
The only thing councils should build are leisure centres, schools & ROADS!

How many pot holes will all these MILLIONS of pound had fixed?
As usual a HUGE loss for the taxpayers & I bet promotion for the idiot that said this scheme was a good idea!
I say sack all those councillors & staff that backed this scheme WITHOUT any pay off for gross misconduct!
No staff backed the scheme. The decision was made by the LibDems.

The council will have nothing to do with the running of the hotel, they will just own the building. Just like the Travelodge, Lloyds Bank and Wetherspoons buildings in Eastleigh, and B&Q and Halfords and Costa and Matalan etc.
[quote][p][bold]vpharm[/bold] wrote: Why are the council building something that is NOTHING to do with the taxpayers? The only thing councils should build are leisure centres, schools & ROADS! How many pot holes will all these MILLIONS of pound had fixed? As usual a HUGE loss for the taxpayers & I bet promotion for the idiot that said this scheme was a good idea! I say sack all those councillors & staff that backed this scheme WITHOUT any pay off for gross misconduct![/p][/quote]No staff backed the scheme. The decision was made by the LibDems. The council will have nothing to do with the running of the hotel, they will just own the building. Just like the Travelodge, Lloyds Bank and Wetherspoons buildings in Eastleigh, and B&Q and Halfords and Costa and Matalan etc. Eastleigh Bloke
  • Score: 2

11:32pm Sat 19 Oct 13

vpharm says...

Build affordable home there instead of a hotel. At least make it something useful for the people of Hampshire!
Build affordable home there instead of a hotel. At least make it something useful for the people of Hampshire! vpharm
  • Score: 1

1:46pm Sun 20 Oct 13

breenger says...

This is a betrayal of the local electorate, and is an abuse of tax-payers money, which surely amounts to a corrupt local government. The Ageas concern is continually ripping people off, as was evident on Friday 11th of this month when many fans attended a gig by "GrooveJuice", where ALL beers at BOTH bars was watered down to such an extent that most drinkers resorted to buying 5 bottles of Carlsberg Lager for the offered price of £10. this was only 2 days short of it's best before date, but was a helluva lot better than paying for ILLEGALLY "doctored" draught beers and lagers. Ageas, you should think black,burning shame of yourselves, and hang your heads in disgrace, but will you, will you hell, as long as there are some idiots who will buy and consume your watered down product!!
This is a betrayal of the local electorate, and is an abuse of tax-payers money, which surely amounts to a corrupt local government. The Ageas concern is continually ripping people off, as was evident on Friday 11th of this month when many fans attended a gig by "GrooveJuice", where ALL beers at BOTH bars was watered down to such an extent that most drinkers resorted to buying 5 bottles of Carlsberg Lager for the offered price of £10. this was only 2 days short of it's best before date, but was a helluva lot better than paying for ILLEGALLY "doctored" draught beers and lagers. Ageas, you should think black,burning shame of yourselves, and hang your heads in disgrace, but will you, will you hell, as long as there are some idiots who will buy and consume your watered down product!! breenger
  • Score: -1

4:12am Mon 21 Oct 13

dolomiteman says...

FFS echo try doing some real journalistic work, the council have an agreement in place where they will pay £30M on completion of the build so there is no extra cost to the tax payer.
If the building is never finished the council don't pay, if it goes over budget the council still only pay £30M what is so hard to understand about that?
FFS echo try doing some real journalistic work, the council have an agreement in place where they will pay £30M on completion of the build so there is no extra cost to the tax payer. If the building is never finished the council don't pay, if it goes over budget the council still only pay £30M what is so hard to understand about that? dolomiteman
  • Score: 0

4:20am Mon 21 Oct 13

dolomiteman says...

breenger wrote:
This is a betrayal of the local electorate, and is an abuse of tax-payers money, which surely amounts to a corrupt local government. The Ageas concern is continually ripping people off, as was evident on Friday 11th of this month when many fans attended a gig by "GrooveJuice", where ALL beers at BOTH bars was watered down to such an extent that most drinkers resorted to buying 5 bottles of Carlsberg Lager for the offered price of £10. this was only 2 days short of it's best before date, but was a helluva lot better than paying for ILLEGALLY "doctored" draught beers and lagers. Ageas, you should think black,burning shame of yourselves, and hang your heads in disgrace, but will you, will you hell, as long as there are some idiots who will buy and consume your watered down product!!
And you reported this watered down beer to trading standards did you?
It is virtually impossible and very dangerous to mix water into a pressurised barrel and would make any carbonated alcoholic drink go very flat and difficult to draw from the pump and there is nothing wrong or illegal about selling bottles before their sell by dates?
[quote][p][bold]breenger[/bold] wrote: This is a betrayal of the local electorate, and is an abuse of tax-payers money, which surely amounts to a corrupt local government. The Ageas concern is continually ripping people off, as was evident on Friday 11th of this month when many fans attended a gig by "GrooveJuice", where ALL beers at BOTH bars was watered down to such an extent that most drinkers resorted to buying 5 bottles of Carlsberg Lager for the offered price of £10. this was only 2 days short of it's best before date, but was a helluva lot better than paying for ILLEGALLY "doctored" draught beers and lagers. Ageas, you should think black,burning shame of yourselves, and hang your heads in disgrace, but will you, will you hell, as long as there are some idiots who will buy and consume your watered down product!![/p][/quote]And you reported this watered down beer to trading standards did you? It is virtually impossible and very dangerous to mix water into a pressurised barrel and would make any carbonated alcoholic drink go very flat and difficult to draw from the pump and there is nothing wrong or illegal about selling bottles before their sell by dates? dolomiteman
  • Score: -1

11:07am Mon 21 Oct 13

one in a million says...

EBC are a joke, roll on the May elections when we can have a chance to get rid of the fib-dems and their strangle hold on decision making in the borough. They are systematically destroying the area with there ill-conceived, hasty decision making.
EBC are a joke, roll on the May elections when we can have a chance to get rid of the fib-dems and their strangle hold on decision making in the borough. They are systematically destroying the area with there ill-conceived, hasty decision making. one in a million
  • Score: 2

11:10am Mon 21 Oct 13

one in a million says...

fib dems...
fib dems... one in a million
  • Score: 1

5:54pm Mon 21 Oct 13

Eastleigh Bloke says...

You can't get rid of them in May. Even if they lose all their seats that they have up for election, they'll still have a majority. A different leader maybe...

People will just vote the same as they always do though, nothing will change.
You can't get rid of them in May. Even if they lose all their seats that they have up for election, they'll still have a majority. A different leader maybe... People will just vote the same as they always do though, nothing will change. Eastleigh Bloke
  • Score: 0

11:47am Wed 23 Oct 13

lozgordon says...

dolomiteman wrote
And you reported this watered down beer to trading standards did you? It is virtually impossible and very dangerous to mix water into a pressurised barrel and would make any carbonated alcoholic drink go very flat and difficult to draw from the pump and there is nothing wrong or illegal about selling bottles before their sell by dates?][/quote

Yes the watered down beer was indeed reported to trading standards. also as an ex-publican it is not impossible to water down barrels, the breweries are more than happy to sell or give the publicans the tools of the trade. watered down beer is very flat but as newer bars now have "assisted" pumps there is not a problem drawing beer, when cleaning pipes water is used, your argument is therefore unfounded.
dolomiteman wrote [quote]And you reported this watered down beer to trading standards did you? It is virtually impossible and very dangerous to mix water into a pressurised barrel and would make any carbonated alcoholic drink go very flat and difficult to draw from the pump and there is nothing wrong or illegal about selling bottles before their sell by dates?][/quote Yes the watered down beer was indeed reported to trading standards. also as an ex-publican it is not impossible to water down barrels, the breweries are more than happy to sell or give the publicans the tools of the trade. watered down beer is very flat but as newer bars now have "assisted" pumps there is not a problem drawing beer, when cleaning pipes water is used, your argument is therefore unfounded. lozgordon
  • Score: 0

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