EAST HAMPSHIRE District Council is set to sell a loss making and empty hotel it controversially bought to make money.

The building cost the council £1.2m in November 2014 and has been empty virtually ever since, and has cost – or lost – the council more than £250,000.

This includes £100,000 in vandalism, holding costs of about £34,000 a year, and about £50,000 a year in lost business rates income.

On top of that the council hasn’t had any rental income from the two-storey Travelodge-style building.

And the authority refuses to say how much that loss might be, claiming revealing the figure might jeopardise a future sale.

Included in the original deal was a Starbucks café next to the hotel on the A3 at Liphook.

A council spokesman said: “Throughout our possession of the site we have enjoyed a regular rental income from the successful Starbucks cafe on site. But we have not been able to find a financially-viable solution for the remainder of the plot (hotel) and as a result it makes sense to sell it.

“Building a balanced and profitable portfolio is a dynamic process and sales and acquisitions are a part of property management.”

This setback follows news that repayments on future loans from the government’s Public Works Loans Board may cost more.

The council agreed the loan facility so it could invest in more income-generating properties.

So far it’s thought more than £100m has been borrowed from the board – the council couldn’t give an exact figure as the Post went to press – but the interest rate increase will see it pay back more in future.

The council spokesman added: “The Public Works Loan Board has increased its interest rates from 1.81 per cent to 2.82 per cent for all new loans.

“This means that money borrowed at the old interest rate will continue to be paid back under those terms.

“The council still has plans to increase its property portfolio. However, the interest rate rise will require us to review how we fund future acquisitions.”

The interest rate increase could see the council paying up to an extra £1m in repayments if it borrows the estimated £100m remaining from the £200m loan facility.