Belfast Telegraph

Friday 1 August 2014

£20m city hotel project scrapped

A Government-backed hotel project has fallen through after its developers walked away, claiming the proposals were no longer commercially viable.

The Department for Social Development said Tullymore House Ltd, owned by Co Antrim brothers Paul and Nicky Hill, has withdrawn from plans to develop Armagh House on Belfast’s Ormeau Road into an upmarket hotel because of the impact of the recession. The blow comes less than a month after DSD announced Big Picture Developments had pulled the plug on a hotel and apartment scheme backed by the department at Foyle Street in Londonderry.

DSD appointed Tullymore House as its preferred developer for the disused Armagh House in 2007, based on plans to turn it into a four or five-star apartment-hotel and bar as part of a £20 million regeneration of the building.

But the Hill family, which owns Galgorm Manor hotel near Ballymena, decided a new hotel in the city is not commercially viable given the significant downturn in the economy.

A spokesman for Tullymore House said: “Unfortunately we have taken the decision to postpone any future development in Belfast at the moment. This is due to the prevailing economic situation and the current oversupply of bedrooms in Belfast.”

A DSD spokesman said the department was disappointed but “recognises that this is a difficult time for all developers”.

“The contribution of the private sector is vital in our efforts to regenerate areas of deprivation and it is disappointing that this investment proposal has been lost,” the spokesman said.

“The department will be considering what other options might be possible including a new development brief competition.”

Big Picture Developments, run by Policing Board chairman Barry Gilligan, last month pulled out of a £23m project to transform the former City Hotel site in Derry.

The developer also blamed current market conditions for its decision to bin the Foyle Street project.

The department said then it intends to put the site on the market again as soon as conditions pick up.

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