FURTHER details have emerged of the calculations being made by a cash-strapped council which is hoping to borrow £17m to build a hotel.

It was reported last week how Stockton Borough Council intends to make an annual profit on the Riverside hotel - which would be operated by Hampton by Hilton Hotel.

It would pay the loan back at £830,000 a year over 35 years.

The Northern Echo has seen confidential papers which reveal the authority is projecting an 83.6 per cent occupancy rate at the 125-bedroom hotel over the next five years.

It has hired an internationally renowned hotel management company to run the proposed hotel and expects the average room rate to be £80.25.

This would lead to a net operating profit, after all hotel costs, wages and fees, of £1.2m before the borrowing repayment is deducted.

After that tax and other costs would be taken off but it is still hoped the hotel could generate £90,000 a year for the council.

The issue was debated at Stockton council's cabinet last Thursday before the press and public were asked to leave on the grounds that financial details were to be discussed.

During the debate, the cabinet was told by Richard McGuckin, head of economic growth, that Hampton by Hilton was a above the budget hotel market but below the high-end Hilton hotels. It is hoped the hotel would create 30 direct jobs and another 70 supply chain jobs.

There was enthusiasm from cabinet members. Nigel Cooke, Labour, cabinet member for regeneration, said: "This is a really exciting proposal for this town and the Tees Valley as a whole."

Cllr Steve Nelson described the plan as "visionary".

However, opposition councillors were cautious. Cllr Sylvia Walmsley, Thornaby Independent, said: "This sends mixed messages. We talk about massive cuts and then find £17m. We're told there's demand because of the High Street (regeneration). Well, The Swallow hotel (which has been closed for six years) is on the High Street. All the risks associated with this lie with the council. Why wouldn't a private company want to be involved with no risk?"

Cllr Lynn Hall, Conservative, said the confidential council figures were optimistic. The average rate for a Hampton by Hilton was £67.

Cllr Phil Dennis, Conservative, said he had spoken to family run hotels in Eaglescliffe which were already struggling to fill hotel rooms and were worried about the plan. "If this is such a dead-cert, why is no commercial company doing it themselves?"

However, Mr McGuckin responded that detailed studies showed there was a "massive under-provision" of hotels in the Tees Valley. "For it to fail it would have to be the worst-performing hotel in the entire Tees Valley," he said.