Exeter City Council has confirmed that it is unable to provide a start date for Royal Clarence Hotel renovation works despite nearly eight years passing since the historic Cathedral Yard building burnt down in October 2016.
The council planning committee approved the redevelopment of the derelict hotel nearly two years ago, but a series of subsequent deadlines to sign a section 106 agreement requiring developer contributions to health, education and affordable housing elsewhere in the city were not met.
The agreement was eventually signed in August last year but it does not include all the contributions stipulated by the committee. £13,500 for local GP surgeries and £22,500 for the Royal Devon NHS Trust has been included as intended but £85,152 towards school provision has not.
Because the hotel redevelopment plans, for five floors of luxury flats above a ground floor bar and restaurant, do not include any affordable housing, a much larger sum of £2.175 million towards the provision of affordable housing elsewhere in Exeter has also been agreed.
However none of these sums will be finalised until three months after construction is complete and will then be reviewed, based on final build costs and profit margins submitted by the developer, at which point a viability appraisal may conclude that none of the contributions are due after all.
The remains of The Royal Clarence Hotel last week
Diana Moore, a Green party councillor in St David’s ward, in which the remains of the hotel sit, tabled several questions about its restoration prospects at a council scrutiny committee meeting last week.
Labour councillor Matt Vizard, responding in council leader Phil Bialyk’s absence, said that the developer had made “some progress” since the plans were approved two years ago.
However he confirmed that the council had yet to receive any applications to discharge the conditions agreed when planning consent was granted last year.
These require full details of demolition, archaeological investigation and construction methods, waste and noise impact analyses and a historic building record programme to be provided before any restoration works can commence.
Additional conditions require the provision of design and materials details, a biodiversity enhancement plan and energy performance calculations before restoration can continue once the foundations are in place.
Matt Vizard said: “The council currently cannot provide a specific start date for construction works. While the developer has indicated a potential start date in spring 2025, this is contingent on completing the detailed design phase to RIBA stage four and subsequent procurement.
“Given that these elements are outside the control of the council, we are cautious about setting public expectations. We continue to engage with the developer to encourage timely progression but it is essential to note that these timelines may be subject to change.”
The Royal Clarence Hotel 2022 restoration plans front elevation. Source: Exeter City Council.
Matt Vizard also told the meeting that “urgent works” had taken place to stabilise the shell of the building, including the addition of internal structural scaffolding to “prevent the risk of collapse”.
He said that standing water was being pumped out of the basement and vegetation removed, with weekly inspections “to ensure the integrity of the scaffolding and check for structural defects”.
“However”, he added, “these inspections and maintenance works are carried out by the owner’s representatives rather than the council”.
Diana Moore said she was concerned about the situation because the developer had told the council planning committee two years ago that he was “going to get on with it”.
She added: “This is a big heel-dragging exercise. So when will you be saying enough is enough and enforcing action to protect this important building for the city?”
Matt Vizard replied that he would take the question away and ask for a written response to be “shared with the committee”. None has so far been provided.
The Royal Clarence Hotel in 2010 from the north tower of Exeter Cathedral.
Photo: Small Jim under a Creative Commons license.
The Royal Clarence Hotel was built in the late 1760s on the site of several medieval buildings, parts of which were retained in its fabric. There is also evidence of Roman occupation at lower basement level.
It was initially known simply as “The Hotel”, and provided assembly rooms, a coffee house and a tavern before becoming a coaching inn. It became “The Cadogen Hotel” then “Thompsons”, then “Phillips Hotel”.
Its aristocratic renaming followed an 1827 visit by Adelaide, Duchess of Clarence, around which time it was partly remodelled to incorporate the former Exeter Bank building next door.
Other alterations followed. In 1953 it was added to what is now the National Heritage List for England as part of a group of important Cathedral Yard and Deanery Place buildings.
Local celebrity chef Michael Caines and Andrew Brownsword ran the hotel in partnership for fifteen years from 2000, launching a chain from the premises.
Andrew Brownsword Hotels still owned the building when a major fire that began in the adjoining 18 Cathedral Yard early on 28 October 2016 destroyed most of its interior and frontage.
The Royal Clarence Hotel fire in October 2016. Photo: The Devon and Exeter Institution.
In December 2017 the city council granted planning consent for the building’s partial demolition and reconstruction as a 74-bedroom hotel.
The reconstruction was expected to take eighteen months to complete, but the hotel was instead put up for sale in August 2019.
Accounts filed at Companies House say that insurers agreed a settlement of £22.3 million to compensate for losses following the fire in accordance with the complete impairment of all tangible fixed assets and the works required to protect and restore the site’s historic fabric.
At the time Andrew Brownsword said the cost of partial demolition, historic fabric recovery and redevelopment enabling works meant rebuilding to match his hotel group’s standards was not viable.
According to the Land Registry, South West Lifestyle Brands Limited, a company controlled by former Plymouth Argyle Football Club chairman James Brent and Nicola Brent, bought the hotel for £100,000 the following August.
The Royal Clarence Hotel Limited, a subsidiary of Andrew Brownsword Hotels, registered a charge against the property which refers to a clause in the unpublished sale contract on the same day. (It also recorded a £10 million dividend payment to its parent at Companies House in 2022.)
James Brent is listed as currently or previously a director of 35 other companies, one of which is Suite Hospitality, the chain which operated Buckerell Lodge Hotel in Topsham Road before it went into administration in June 2020 owing £4.1 million to creditors that included Exeter City Council.
It was dissolved less than three weeks before the council planning committee met to approve the current restoration plans in October 2022.
The Royal Clarence Hotel and adjacent buildings fire damage, October 2016. Photo: Exeter City Council.
Nine months before the committee met, the developer provided a viability assessment which said the planned restoration would cost £14.3 million, including fees and financing costs, and so could not offer any health or affordable housing contributions to the council at all.
The council commissioned its own viability assessment in response. It broadly agreed that the 23 flats would sell for at least £13.8 million, following a Knight Frank market appraisal that was by then fifteen months old, but said some might fetch more, citing an “extremely active” property market.
It also broadly accepted the proposed residential build cost calculations but significantly reduced the costs associated with the ground floor commercial units.
Having cut the restoration, fees and financing costs to a total of £9.1 million it projected a £3.2 million surplus from the project, all of which the council could seek to provide healthcare and affordable housing elsewhere in Exeter.
Unsurprisingly the developer disagreed, recalculating costs and margins to yield a surplus that was still too small to make any such contributions.
A fortnight later the September 2022 “mini-budget” prompted a fall in the value of sterling to its lowest-ever level against the dollar. 40% of the UK’s mortgage market products were withdrawn, domestic mortgage rates hit their highest levels since 2008 and house prices fell.
Whether the Royal Clarence Hotel restoration plans were viable when the council approved them in October 2022, even without the health and affordable housing contributions included in the section 106 agreement between the developer and the council, is moot.
Do recent signs of life in the housing market make them more viable now as higher government borrowing than forecast reaches 100% of GDP and the country braces itself for tax increases in next month’s budget?
Nearly two years after the plans were approved and eight years since the fire, the developer is running out of time to wait and see.
The current planning consent will expire on 25 August 2026 if its pre-commencement conditions are not all satisfied and works do not commence between now and then.
