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Travelodge accuses Croydon Council of pricing firms out of town

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TOP brass at a major hotel chain are claiming Croydon Council is in danger of pricing them out of the borough.

Paul Harvey, Travelodge's managing director for development, has said new charges introduced by the council are making the company think seriously about abandoning plans to open new hotels in Purley and Norbury.

Council leader Mike Fisher has, however, hit back, claiming the new charges are about half the London average and that the borough still represents good value for money for developers.

At the root of the clash is the change in the way developers pay for improvements to the infrastructure of an area – such as new schools and better transport facilities – and an improved environment.

The charges are levied as a condition for granting planning permission. In the past year the long-established Section 106 agreements covering these payments have been replaced by the Community Infrastructure Levy (CIL).

Travelodge is claiming that under the old system the contributions due as a result of developing two hotels would have been about £286,000.

Under CIL, Croydon is charging £120 per square metre for developments and added to this, according to Travelodge, is another £35 per square metre for the Mayor of London's office.

This, it says, would bring the total development charges for the hotels to £952,000, making them potentially unviable.

Mr Harvey said: "Instead of supporting the growth of the hotel industry in Croydon, the council is setting such high costs on development that they will actually lose out on long-term growth, revenue and job opportunities.

"If we opened two new hotels in Croydon then we would create 50 jobs, with all entry-level roles going to the long-term unemployed thanks to our partnership with Jobcentre Plus."

He added: "Croydon needs a good mix of hotels, due to many of the existing B&Bs and hostels offering inadequate accommodation, poor value and extortionate prices.

"Unfortunately the high level of the proposed tax means the borough will miss out on the benefits that additional hotels would bring."

Councillor Fisher said it was difficult to comment on the costs stated by Travelodge, because the council was not aware of the size of the proposed hotels and Section 106 agreements were also tailored to individual developments.

He said: "We are charging £120 per square metre across the board, except for a zero CIL for residential developments in the town centre and office developments outside the centre.

"The average CIL across London is £241 and our charge is the third-lowest in the capital.

"If they are looking for this kind of quality elsewhere in London, in most cases they are going to have to pay more in CIL."


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