Aberdeen city councillors have reaffirmed their commitment to Aberdeen Exhibition and Conference Centre – and have agreed to investigate new ways of creating a four-star hotel at the venue.

The Full Council meeting accepted that the intended financial package to deliver AECC's proposed hotel development carried too much risk for the council because of the current economic climate – and voted by 24 votes to nine that alternative financial structures to deliver the facility should now be sought.

Aberdeen City Council Leader Councillor John Stewart said: "All of the professional advice we have received shows that a four-star hotel would boost AECC business and bring significant economic returns to the city.

"The venue already contributes almost £80million a year to Aberdeen City and Shire – far outstripping the financial support it receives, which is far less that the investment of public funds enjoyed by the conference centres in Edinburgh and Glasgow.

"That is a very good return on public money and we need to continue to support AECC, which has performed excellently this year on its operational budgets. The Energy Capital of Europe clearly must have a major conference centre and we will now strive to ensure it continues to make a major contribution to Aberdeen City and Shire."


The decision follows four months of strenuous efforts to negotiate a deal to create a hotel, involving the city council, AECC, financial institutions, a construction company, a hotel operator, and legal and technical advisers. The negotiations were carried out following an instruction to council officers at the February Full Council meeting to continue to work with AECC on its hotel proposal, subject to any agreement being acceptable to the Council.

The deteriorating global economic climate, however, led to significant changes to the terms of the proposed financial structure – prompting council officers to recommend to councillors that the level of risk to the Council was unacceptable.

A report to the council meeting said: "The commercial justification for a hotel project on the planned site has never been questioned throughout the due diligence process. It is therefore envisaged that a hotel development can be delivered using a structure that exposes the Council to less risk whilst still making use of the substantial investment made to date in this project."

AECC has spent £2.3million on architectural, legal and other professional fees on the scheme. City councillors agreed to grant the venue £568,000 to address the cash flow implications of writing off the sum and to extend the repayment date of AECC's loan facility to 17 May 2017.

All possible means will be used to ensure that the intellectual property rights relating to the professional work on the hotel development carried out thus far are transferred to the City Council to assist with the investigation of new mechanisms to deliver the project.

AECC managing director Brian Horsburgh said: "We appreciate the Council's position and are reassured by the news that investigations into alternative methods of delivering the hotel will still go ahead. Being able to offer four-star accommodation next to the Centre will enable us to attract larger and more high-profile events from across the globe."

(GK/KMcA)