National hotel developers selected as preferred bidders for an opulent Perth city centre property could purchase the building for just £1.
Perth and Kinross Council would also foot the bill for £1.9m in heritage funding to upgrade and maintain the stained glass and other historic features at 1-5 High Street as part of the deal if proposals are signed off.
Accepting the tiny nominal fee has been slammed because on the same day a prospective developer was selected for the boutique hotel, councillors narrowly voted against pleas to hand over a much smaller vacant public building to a community group for the same £1 fee.
The council wants to save the £143,000 per year currently needed to run the building and believes the cut-price offer is the best way to draw in investors.
Planners say revamping the premises could cost more than £7m and the subsidised asking price will draw in wealthy developers.
Henley Homes Group was announced as the preferred bidder last week. The firm wants to renovate the building through its Rogue City Hotel Group (RCHG) brand, the team behind Dunalastair Hotel Suites in Kinloch Rannoch.
This decision, while not binding either party to an agreement, allows the council to start negotiations with the group.
Local authority chiefs would also have to turn to prudential borrowing to garner the seven-figure funds mandated for restoring and preserving the structure’s historic facade.
Perth and Kinross Council say they are looking at a long-term benefit, expecting the project to bring millions of pounds a year into the city and create more than 100 jobs during construction and a further 71 jobs after its revamp.
SNP group leader Grant Laing said it is the wrong deal at the wrong time.
He said: “I’m not against there being a boutique hotel at the site, I’m against selling a major asset for £1, losing control of the building and having to borrow £1.9m at a time when budgets are already tight.
“It’s not the right deal or the right time, as society is in flux and it could prove useful to hang onto the building for now.”
A council spokesperson said: “The council currently spends £143,000 per annum on operating 1-5 High Street.
“The overall cost of the development will be excess of £7m and without grant support to contribute to the restoration of key heritage features, the project is not financially viable.
“To finance the conservation grant of up to a maximum of £1.9 million, the council proposes to borrow from the Public Works Loan Board with the borrowing costs met from savings made through not having to operate the building.”
The local authority refused to sell another, significantly less valuable property, to a community group in Kinloch Rannoch for the same £1 fee, insisting the community asset transfer group source £75,000 to complete the handover.