Airport owners front-runners to build hotel

Jan 7 2009 by Peter McCusker, The Journal

Multi-million pound plans for three hotels and three business parks have been approved in and around Durham Tees Valley Airport. Now a race is under way to get the developments started, Peter McCusker reports

WE don’t see this as a race, we have a strategy in place and we intend to see it through.” These are the words of Hugh Lang, group airports director, of the Peel Airports Group, which owns Durham Tees Valley airport.

Late last year Peel won approval to build a 100-bed, £8.5m hotel 300 metres from the existing terminal building. It hopes work will start by the spring.

But two other developers have also approval for hotels at the airport – and have signalled their intention to press ahead with their plans.

The owner of Darlington Football Club, George Houghton, won approval for an 80-bed hotel last year and developer Lancaster House was given approval for a £4m, three-star, 130-bedroom hotel in October.

Mr Houghton said: “I am not concerned about anyone else’s development near the airport and I am pressing ahead with our plans.

“We are currently submitting detailed planning for our 80-bed value hotel, which will be project managed and developed by my company, North Star Capital Projects.”

Jeremy Good, of England and Lyle, the agents for Lancaster House, which is owned by CG Robinson, of Stockton, has planning permission for a brownfield site on the northern edge of the airport.

He said: “There is a race on to find an operator. We are currently speaking to two interested parties. There is some latent demand for more hotel bed space. The airport may support two more hotels but I doubt wether there is room for three.”

Despite a 6% slump in demand for air travel in 2008, Durham Tees Valley airport owners foresee a very prosperous future with aims to more than double passenger numbers to three million by 2015. This expected increase in passengers and an anticipated similar growth in demand for freight traffic is fuelling the ambitious development plans in and around the airport.

Since Peel Airports Group took over the running of the airport more than five years ago it has set in motion ambitious plans to facilitate its growth. And its track record – with its significant improvements at Robin Hood Airport, near Sheffield, and John Lennon in Liverpool which it also owns – suggest they will materialise.

Peel recently finished multi-million pound improvements to runway lighting and drainage and has given the airport terminal building a facelift as well as implementing the name change from Teesside Airport to Durham Tees Valley airport.

One Tees Valley insider with a close handle on development in and around the airport doubts whether all three hotels will be built

“There is just not the room for three hotels at the airport and it’s difficult to see how all of the business parks will go ahead in the current economic climate.

“Some developers appear to have submitted speculative planning applications in the hope of securing partners to proceed with a development at a later date.”

The front-runner for the developments seems to be the Peel group.

It recently announced it was in talks with a major hotel chain and expected to see work begin in the new year.

It is also confident work will start on its Skylink Business Park this year. This proposed £110m development is earmarked for 250 acres to the south of the airport and work is expected to start in March.

It is also confident a second business park development on land near to its proposed hotel will also come on stream and is intent on improving facilities for the handling of cargo at the airport in due course.

Meanwhile, a second company, Sven Investments, secured planning permission for its own similarly named Skyline Business Park, a £26m development on land to the north of the airport a few weeks ago, and it expects to begin work next autumn.

Joe Docherty, chief executive of public sector body Tees Valley Regeneration, is backing Peel’s plan. He said: “Skylink is a stand-alone project that will start in spring.

“It is one of the five big projects the partnership has identified for the Tees Valley and the funding is in place. Peel is an experienced developer who has identified a commercial demand for the business park.”

Skylink, which is eventually expected to create around 2,000 jobs, is a joint project being developed by Peel Holdings, Tees Valley Regeneration, One NorthEast and English Partnerships.

The 250-acre park will offer over two million sq ft of business space – aimed at businesses needing between 20,000 and 500,000 sq ft with particular emphasis on “airport business” and freight companies which can provide and operate very large sheds next to an international airport

To the north of the airport Sven Investments intends to construct a £26m business park which will include an office development of 11 units, limited to airport-related business.

That development will focus on smaller start-up businesses with office and warehousing space, which will include car parking, new access roads and landscaping.

The units will be built on a leisure development which was never completed adjacent to the A67.

Steve Barker, planning consultant from Darlington-based Prism Planning, which acts as agents for Sven, said: “Peel and ourselves are offering different products for different market places and I believe we can exist side by side.

“What we are offering is a viable product designed to be flexible and aimed at smaller enterprises.”

When the proposals were approved by Darlington Borough Council’s planning committee in November Peel made an unsuccessful last minute objection in a bid to have the scheme rejected.

Mr Barker added: “We were surprised by Peel’s last minute objection to our proposals. We do not want a fight with them and belive there is room for both to exist side by side.”

Mr Barker told the meeting: “We want to work with the airport operator to work on the site. We find their objections to developing an eyesore, perplexing and rather perverse.”

A letter read out at that meeting from Peel said: “Additional office space could prevent the airport from becoming an economic driver in the region.”

Peel’s objections to Skyline’s plans echo its earlier disapproval of the hotel proposal by George Houghton.

In 2007 Mr Lang said planners in Darlington should not have granted Mr Houghton permission as there is not sufficient demand for hotel beds at the airport to support both schemes.

At the time Mr Lang said: “We have taken two-and-a-half years to get to this stage with our development and had to take in a whole range of conditions on highway upgrades, etc.

“We are disappointed that somebody can now come in under the radar and get permission for another hotel. We have permission for our development based on the needs of the airport. Is there a need for another hotel?” But Mr Houghton said: “The hotel plan near the airport is part of a £100m investment strategy by my businesses in and around Darlington. There is no doubt that the area needs new hotels and I have presented a perfectly viable planning proposal which has been accepted on its merits.

“Durham Tees Valley Airport does not have a divine right to priority in the planning system. There has been a massive overreaction by the airport’s managing director (then Mr Lang).

“Instead he should be ready to compete to provide passengers and the public with the facilities they need and deserve. Simply complaining because an enterprising company has entered the market will not do.”

With Peel seemingly ruffling a few feathers in its bid to stamp its pre-eminence on any future airport developments, 2009 promises to be an interesting year in determining what developments eventually take place at Durham Tees Valley Airport.

1 Skylink Business Park. Cost; £110m. Expected to start Spring 2009. Developer; Peel Holdings.

2 Skyline Business Park. Cost; £26m. Developer; Sven Investments

3 Cargo village. Cost; £6m. Developer; Peel Holdings

4 Hotel and business park. Cost; £25m, Developer; Peel Holdings.

5 Hotel, 3-star, 130 bedrooms. Developer; Lancaster House

6 Hotel, 80 bedrooms. Developer; George Houghton, owner of Darlington FC

With Peel seemingly ruffling a few feathers 2009 promises to be an interesting year