Businessman fears he has no prospect of getting money back from delay-hit scheme
An investor who ploughed £50,000 into the proposed George Best Hotel in Belfast has said he hasn’t been consulted over a plan by its former owner to complete the venue.
Belfast Telegraph has seen court documents which show that administrators sought the go-ahead last month to sell the listed Scottish Mutual Building at Donegall Square South, where the themed hotel was to open three years ago.
However, it has not yet gone on the market. According to an affidavit filed by an administrator of Bedford Hotel Ltd, the work on the building is 70% complete but needs another £1m to £1.5m spent on it.
The project, led by Liverpudlian businessman Lawrence Kenwright of Signature Living, was beset by delays, including a row with planners at Belfast City Council over refurbishments to the interior.
It was to have been part-funded by investors paying for a bedroom, in the promise that their investment would pay off after the venue was open.
According to the affidavit, £4m was paid over by investors, with one individual paying £78,000 upfront.
The affidavit says Bedford Hotel Ltd does not have the money to repay the investors and that the administration would have the best outcome if the hotel was sold.
Financial problems at the business had led to Bedford Hotel, the vehicle for the George Best Hotel, going into administration last year. They were appointed by lender Lyell Trading, to which the business owes £7.2m.
Now a spokesman for Mr Kenwright has said 49 bedroom investors are backing him to complete the project.
But investor Anthony Kieran said he had not been contacted and expressed scepticism about the idea of backing the business again.
“I think it’s ridiculous. We got communications on June 29 from the administrators and the administration is progressing through the courts. We’ve been pretty much told we’re getting nothing.”
He invested £50,000 in the hotel through his Belfast-based business Aurient Ltd.
"We’re lucky in one way. We did this as a business venture, but we know people who put every last penny for their retirement into the George Best Hotel, and those are the people we feel sorry for,” he said .
"But there have been no communications to myself of any scheme to resurrect the project.”
Mr Kieran said the business seemed a sound investment, and that he researched the company by visiting Signature Living’s Shankly Hotel, named after former Liverpool manager Bill Shankly.
"I thought to myself, Signature Living seem to have their act together – £50,000 seemed a good bet.
"Initially it was going to be £100,000 but then I went back and agreed to put £50,000 in upfront and another £50,000 upon completion of the building.”
Now he says he wished he’d retained the funds for Aurient’s own projects, in particular the regeneration of the old Regency Hotel at Upper Crescent in Belfast.
A spokesman for Signature Living and Lawrence Kenwright said the “majority” of the bedroom investors believed backing him again was the right thing to do.
“They feel that the local economy and indeed those who invested in the project would be better served by completing the hotel project and providing an iconic hotel brand in the heart of Belfast.
"To this end, the investors are collaborating with Lawrence Kenwright on the recovery plan.”
He said that of the GB Hotel bedroom investor group of 50, only one was opposed to the plan and “the overwhelming majority therefore are prepared to actively support the collaboration with Lawrence Kenwright”.
However, there were another eight investors who had not been reached, he said.
Chris McCracken, chief executive of the Linen Quarter Business Improvement District, where the building is located, said he hoped a hotel project could be realised.
“It’s a beautiful red sandstone building, it’s listed and it forms one of the most important parts of Donegall Square South, a gem of Victorian heritage in Belfast.”
Meanwhile, a spokesman for the joint administrators at Kroll said they were aware that Mr Kenwright had been in talks with private investors.
But they said they had not yet received any proposals, adding that plans “will need to demonstrate that they do not compromise the rights of other classes of creditors and have a realistic prospect of success”.