£250,000 tram levy discount smooths path for new hotel

Published on Friday 22 January 2010 08:48

A HOTEL developer is being given a £250,000 "discount" on its tram levy in order to ensure it pushes ahead with its plans.

Developer Fraser Hamilton is planning a 121-bedroom "aparthotel" beside the tram route at Shrub Place, off Leith Walk.

City planners calculated the project would be liable for a 917,947 payment under the council scheme which forces private firms who stand to benefit from the trams to contribute towards them – a quarter of a million pounds more than the council demanded for earlier plans, lodged in 2005, to build residential flats.

Officials are convinced the developers cannot reasonably afford any more than the lower bill, which shot up because the council demands bigger payments from commercial developers than house builders.

Councillors looks set to agree to the 253,000 discount, but Cllr Ian Murray, finance spokesman for the Labour group on the council, has questioned it. He said: "There is no doubt that a commercial development should pay more than residential because they will benefit commercially from a tram stop on their door.

"While I sympathise that they will feel they are being punished with an extra 250,000, they should have to pay it to get a tram stop that will give them a commercial advantage.

"Traders in Leith Walk have suffered from the development of the tram and I'm sure it will stick in their throats if a new developer is not paying their way."

The development, expected to be finished in 2011, will create around 50 jobs.

It is not the first scheme to be given a tram contribution discount. In December, planners agreed that developers of a new ten-storey hotel next to the Ocean Point One office development in Leith would get a 250,000 discount on its 752,174 tram bill to make the scheme commercially viable.

The expansion of the Edinburgh International Conference Centre was due to result in a 1.4m tram contribution, but planners cut it to 830,574 because of "abnormal construction costs" associated with the project.

Council chiefs need to raise 25m of their 45m share of the 545m tram project through contributions linked to developments along the length of the route.

Planning officials have recommended that the aparthotel proposal for Shrub Place gets the go-ahead. Councillors will make a final decision on Wednesday.

John Bury, the council's head of planning, said: "Council officers have been given access to the financial appraisal for the project and, in line with policy provisions relating to project viability, the applicants proposal is considered acceptable."