Coal Exchange hotel revamp gets £2m Cardiff council loan
The controversial renovation of a Grade II* listed building as a luxury hotel has secured council funding.
Cardiff council has approved a loan - believed to be about £2m - to the owners of the city's Coal Exchange.
The first phase of the 173-bed Exchange Hotel, in Cardiff Bay, opened in 2017 following a £15m refurbishment.
Cardiff South MP Stephen Doughty had urged the council to reject the request from controversial Liverpool company Signature Living.
Mr Doughty raised concerns over the financial and business background of the company's owner Lawrence Kenwright.
Mr Kenwright said he was "delighted" funding had been secured for the "jewel in the crown" of Cardiff's heritage and hoped work would be completed by April.
The council said the loan, which will cover half of the remaining costs to complete the work on one of the city's most significant buildings, was subject to "strict conditions" to safeguard the investment.
Built in 1883, the Coal Exchange was once where the world price of coal was set and the first £1m cheque was signed.
The boutique hotel and wedding venue opened in 2017 with 56 bedrooms and a renovated great hall.
The renovation was partly funded by private investment, with investors purchasing individual rooms for tens of thousands of pounds.
Rooms were then leased back to the hotel owners in return for an annual dividend of about 8% and the opportunity to eventually sell the rooms back to the hotel for a profit.
However, investors in other another Signature hotel said they have been through "a nightmare" trying to get money from the company.
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Mr Doughty said investors in the Coal Exchange had raised similar complaints.
"I have serious concerns about [the council's] ongoing relationship with Mr Kenwright without some very significant safeguards in place," he said.
"He clearly hasn't followed through on the promises in terms of the development and his ability to get it done.
"We find ourselves in the situation where investors haven't been paid and where the building remains uncompleted, as well as a series of other complaints being raised by local residents."
Heritage campaigners have also expressed concern for a building "of great importance" to Wales.
"The most important thing is protecting the building," said Dr Elaine Davey of the Cardiff Civic Society.
"The Coal Exchange is of enormous significance because of its function in establishing the Victorian town, now capital city.
"Signature Living should honour their promises and commitments to the city and to the Exchange."
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The loan application was made through the Welsh Government's Town Centre Loan Scheme, which has been used to prioritise regeneration schemes in disadvantaged areas.
The council said the Welsh Government had agreed in principle, subject to the council's own due diligence and the loan being appropriately secured.
The further refurbishment work will add 117 bedrooms and complete repairs to the building's exterior.
Conditions for the loan stipulate it will be paid in phases and independently verified that the money is being spent on the Coal Exchange.
A council statement said: "As well as preserving, for good, one of the most important buildings in Cardiff's history, completing the redevelopment would also provide significant relief to the residents living around the Coal Exchange, who have endured disruption and building work for the past five years."
Mr Kenwright said investors would see a full return on their investment once work was finished.
"We're incredibly excited to see the finish line in our project to restore this historic building to its rightful place as a jewel in the crown of Cardiff's heritage," he said.
"Once construction is complete, we will get the hotel re-valued as a fully finished trading hotel, enabling us to refinance or sell the property and buy out remaining individual investors, delivering their full return on investment."
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