Major plans for £15m hotel complex on Scarborough's former North Bay indoor swimming pool site scrapped over council disagreement

The project to build a 100-bedroom hotel on the site of the former indoor swimming pool on Ryndle Crescent was revealed by businessman Nick Thomas MBE in July.

It included several suites, both with and without sea views, a bar, restaurant and meeting space on the ground floor.

HQ Hotels, a subsidiary of Mr Thomas’ Qdos Entertainment group, which includes The Plough at Scalby and The Copper Horse at Seamer, was set to buy the site.

The development was subject to purchasing land from Scarborough Council, which was approved by the authority’s cabinet on July 26, but required final approval from North Yorkshire County Council.

In May, the seven district and borough councils in North Yorkshire had their spending powers stripped, ahead of being dissolved next year to form a new North Yorkshire Council.

The county council’s decision-making committee was given the power to veto financial decisions concerning land sales greater than £100,000.

Mr Thomas and his wife Sandra have now withdrawn their commitment to purchasing the land after accusing North Yorkshire County Council of working against them.

“Sandra and I wanted to create a destination hotel for Scarborough. In the style of Leeds’ popular Dakota Hotel, our HQ Hotel would have complemented and not competed with the town’s existing accommodation,” Mr Thomas said.

“Our hotel would have been the perfect centrepiece for the North Bay Masterplan, and as Scarborough’s only high-quality four-star-plus offer, it would have attracted more affluent visitors to the town.”

Scarborough Council obtained an independent valuation from property regeneration consultants, which Mr Thomas said deemed the value of the land at £318,500 for the hotel site and £1,110,000 for car parking; totalling £1,428,500.

Mr Thomas offered £1m to purchase the land from Scarborough Council, claiming that it “fulfilled the authority’s obligation to achieve best value”.

The council’s constitution states that all land and property sales must be subject to a competitive tendering process, however, on this occasion the council elected to sell the land directly to HQ Hotels.

A provision under the Local Government Act 1972 allows local authorities the power to sell the land “in any manner they wish”, however a council cannot sell its land for a consideration less than the best that can be reasonably obtained.

Some Scarborough councillors on the authority’s places and future overview and scrutiny committee heavily criticised the approved sale, raising “concerns that the property is being sold without being adequately marketed to raise the highest possible sum”.

However, the committee ultimately decided that “no further action be taken” and the sale can proceed subject to approval from North Yorkshire County Council.

Criticism was levelled by councillors regarding concerns about due process, transparency, and a perceived lack of public involvement. Council officers strongly denied any claims of impropriety or deviation from regulations.

The hotel development would have created 120 new full-time jobs, providing an additional 70,000 overnight bed spaces per year and contribute an extra £3.4m to the local economy, it was claimed.

Demolition of Scarborough's much-loved indoor pool, which stood for nearly 50 years, got underway in March this year.

The venue, which opened in January 1973, had remained closed and boarded up since June 2017 following the opening of Scarborough Sports Village.

The hotel plan would have meant the loss of 137 car parking spaces in North Bay, which generates £76,000 per year, but the authority said this would be offset by other council car parks and the potential for a multi-storey car park on the former Atlantis site as part of the North Bay Masterplan.

The approval of the sale - called section 24 consent - was set to be discussed by the county council’s executive on Tuesday October 25, but the item was withdrawn from the agenda and did not take place.

Mr Thomas said he contacted Cllr Derek Bastiman, the county council’s executive member for open to business, hoping to discuss the project, but did not receive a reply.

“On October 24, Scarborough Council officers forewarned me that the county council intended to oppose the deal on grounds of ‘best value’ at its October 25 meeting,” said Mr Thomas.

“We were not prepared to debate the specious notion that paying £1m for a site valued at £318,500 to deliver a flagship asset for Scarborough, was anything but ‘best value’.

“We, therefore, withdrew our offer before the county council could oppose it, and so unfortunately a unique opportunity for Scarborough has been halted by what appears to be a political power play.”

A report prepared for the county council said: “Scarborough Council have taken the view that, whilst the sale is at a lesser value than may be obtained by a sale for alternative uses, it is permitted to agree a sale with an undervalue of less £2m where the proposed sale assists in the promotion or improvement of economic wellbeing.”

Cllr Steve Siddons, leader of Scarborough Council, said: “The way that the new unitary authority has used its powers has led to a lack of confidence by a major investor.

“This has resulted in them withdrawing their investment in this borough and an investment that delivered transformational opportunities creating a new hotel, 150 jobs enjoying the living wage and a training academy as well as a high-quality amenity for visitors to this tourist town.

“At a time when every local authority is searching for ways to deliver regeneration and improve residents’ life chances, North Yorkshire’s behaviour makes no sense.

“The real losers here are the residents of this borough with opportunities for jobs, training and a high-quality hospitality offer being thrown to the wind.

“Scarborough Council has a number of transformational projects in the pipeline and I urge North Yorkshire to work with us to deliver the regeneration investment that this borough badly needs.”

In a statement, Cllr Gareth Dadd, North Yorkshire County Council’s executive member for finance, assets and resources, said: “This application was withdrawn before any formal consideration or decision could be made. It would therefore be inappropriate to comment further on it.”