Officials have stressed that a high profile Durham hotel is trading as normal despite administrators being called in to two firms which own the venue’s leasehold interest.
Administrators have been appointed to Closegate Hotel Development (Durham) Limited and Closegate (Durham No.2), the developers and holding firm which oversaw the creation of the 207-bedroom hotel on the banks of the River Wear.
Radisson Blu took on the lease and operate the branding and booking system for the hotel, but Joe McLean and David Dunckley of Grant Thornton UK LLP have now taken on the operation of the business, which is continuing as normal.
The hotel development at Durham’s Riverside North West area was first announced by Closegate Hotel Developments back in 2002, but the project was hit by delays which saw £4m being added on to the estimated cost of the development and it finally opened in 2008, three years later than planned.
It is has not been disclosed why administrators have been brought in.
Latest accounts for Closegate Hotel Development Ltd, for the year ended December 2011, show that the firm incurred a loss of £2.4m for the year. This was shortened from the previous year’s £4.8m loss, however. At the balance sheet date there was also a deficiency of shareholders’ funds of £13.2m.
Accounts for the same time period for Closegate (Durham No.2) Ltd, the finance vehicle for the operation of the leasehold hotel, said the company was affected by the delays in the project, which was financed through a development loan.
The report details how the loan was refinanced on March 6, 2008 but the directors said that they were claiming against its bankers “concerning events surrounding the completion of the refinancing and alleged overspend on the hotel facility”.
A statement issued by Grant Thornton stressed that the hotel was open for business as usual
The administrators said: “Joe McLean and David Dunckley of Grant Thornton UK LLP were appointed joint administrators of Closegate Hotel Development (Durham) Limited and Closegate (Durham No.2) Limited on 11 October 2013.
“Together these businesses own the leasehold interest in the Radisson Blu Hotel in Durham, which continues to operate normally.
“The hotel operates under the Radisson Blu brand – Radisson operates the booking system for the hotel but the administrators remain responsible for the operation of the business.
“Some 85 people are employed at the hotel which has 207 rooms. All bookings at the hotel are being honoured, including for functions.”