Concerns raised over 'comically small' sum paid for Seaburn Inn land at Sunderland seafront

The site of the former Pullman Lodge, which now houses the Seaburn Inn hotel, was the focus of a recent meeting of Sunderland City Council.

Opposition Conservatives launched a debate looking at the land deal which paved the way for the seafront venue, as well as the relationships between companies involved and whether “best value” was achieved.

Calls were also made for the local authority to commission an independent review of other relevant land disposals in the city under an ‘option agreement’ and the “assumptions” made by valuers in these cases.

The disposal of the site happened through the council’s arms length regeneration company Siglion, with the hotel opening to the public in 2021.

At a council meeting at City Hall on June 14, 2023, Sunderland City Council bosses defended the disposal process, noted the hotel’s benefits to the area and said the seafront land with a hotel use had been valued as “nominal”.

It was also noted housing on the site could have generated a larger land value, but a hotel use was proposed instead in line with the results of a public consultation on regeneration priorities for Seaburn.

Councillor Antony Mullen, Conservative Group leader, stressed the motion was “not an allegation of corruption towards the council, nor of impropriety towards any individual”.

Cllr Mullen continued: “It is however, an example of a land deal which is ethically unacceptable and professionally ambiguous.

“Equally none of us in the Conservative Group question we want to see progress across the city in respect of new development.

“But the question before us with this motion is, are we willing to cross ethical lines to achieve and if we are, how far beyond those lines are we willing to go”.

Councillors heard the “prime piece of publicly-owned land” was disposed of by Siglion, which was allowed to draw down parcels of land under a 2014 option agreement with the council, with a minimum requirement for land receipts.

While acknowledging the arrangement provides flexibility when disposing of land for development, or for projects where there are viability issues, Cllr Mullen said £1,000 for the Seaburn site was a “comically small sum of money”.

It was claimed the disposal decision didn’t “trigger” Local Government Act rules requiring the consent from the Secretary of State because of the status of parties involved.

Cllr Mullen said this was because the arms length nature of Siglion meant it was an “entity independent of the council and therefore independent of the best value duty that applies to local authorities”.

Councillor Paul Stewart, Labour cabinet secretary, responded to the Conservative motion and confirmed the “premium” for the long lease of the land was £1,000.

He also set out the details of the disposal to Inn Collection (Seaburn) Limited and the processes followed.

Cllr Stewart said an agreed premium to dispose of the long leasehold interest in 2019 was “supported by external advice” that confirmed the open market value was considered “nominal only given the proposed hotel use”.

The council boss said “separately in 2020 and prior to the transfer of the hotel site” to Siglion, the council obtained its own independent valuation advice on the hotel from Bradley Hall Ltd.

Councillors were told this “confirmed a residual land value of a negative £1.5million for the proposed development site”.

Cllr Stewart added: “It is also noteworthy that prior to the disposal Siglion completed extensive public consultation on the proposed masterplan for the Seaburn regeneration.

“The development of the hotel reflects the desire of the local community and local members to create a high-quality leisure-led development as part of a transformation of the seafront, rather than residential development that could have potentially generated a higher land value”.

Cllr Stewart said the Seaburn Inn had been an “integral part” of the regeneration of the seafront, generating nearly £7million of private sector investment and attracting 105,000 annual visitors with 19,000 overnight stays, as well as boosting spending in the area and creating jobs.

He added the council continued to work with private sector organisations to “drive social and economic regeneration across the city”, noting Siglion’s record in delivering housing, leisure and commercial projects, including at Riverside Sunderland.

However opposition Conservative councillors continued to question the process by which a surveyor, commissioned by the council through company Bradley Hall, had valued the land at Seaburn.

Councillor Michael Hartnack said appointing Bradley Hall, which has a publicly documented relationship working with Inn Collection Group in the past, could create a potential conflict of interest.

Councillor Dominic McDonoughsaid an independent investigation would stop residents “bringing their own conclusions” and “inspire trust” in the council.

Councillor Antony Mullen added the Conservative Group had already referred the matter to the relevant Secretary of State and to the Royal Institute of Chartered Surveyors.

He said this was to seek answers Sunderland City Council officers couldn’t provide because of a “three-month email retention policy”.

Cllr Mullen added: “About Siglion’s contribution in terms of the wider portfolio, it is allowed to make a loss on land that is commercially unviable in order that it then balances out by making a profit elsewhere.

“But an acre of land on the seafront at Seaburn is not unviable, parcels of land next to it sold for millions.

“These questions are important and they can be answered by having the independent review, but they haven’t been answered tonight”.

After being put to the vote, the Conservative motion was defeated with 23 votes in favour and 34 votes against.

Sunderland City Council were approached for comment after the council meeting, which is available to watch on the council’s YouTube channel.

A council spokesperson said: “Both the city council and development company Siglion are committed to city regeneration.

“In acquiring or disposing of land and property, this is always about achieving best value for council tax payers, aiding the city’s on-going regeneration and boosting economic growth”.

An Inn Collection Group spokesperson added: “We’re obviously delighted the multi-million pound investment made by us in creating The Seaburn Inn has been warmly received by people in the area and has met their wants and needs.

“We’re also pleased The Seaburn Inn’s contribution to the social and economic regeneration of the area has been acknowledged and praised”.

Bradley Hall were also approached for comment.