£4.8m taxpayer loan at stake after developer heads into administration

An artist's impression of the new Hilton hotel to be built in Leeds by GB Group

The Leeds City Region Local Enterprise Partnership approved the loan to GB Group in 2013 to help build a Hilton hotel near the Leeds Arena.

The LEP allocated the public money from its £36m Growing Places fund for projects that create economic and employment growth for the city region.

It emerged this week that GB Group Holdings Ltd intended to call in administrators, casting doubt over the future of the scheme.

Announcing the deal in November 2013, the LEP said the 206-room hotel would create more than 100 long-term jobs as well as 370 short-term construction jobs.

LEP chairman Roger Marsh hailed the deal as “fantastic news for businesses, visitors and residents within the Leeds City Region”.

The Yorkshire Post asked the LEP what has happened to the funding, what due diligence it carried it before making the loan and what is happening to the hotel project.

A spokeswoman for the LEP said: “Until we have spoken to other lenders involved in the project and had the opportunity to contact and discuss with the appointed administrators, it is premature to offer a comment.”