Developer pulls plug on hotel plans

A proposal to build a long-awaited four-star hotel on the Albany Waterfront has been scrapped despite the State Government's efforts to entice the developers by offering them the land for free.

The Government has spent the past four years trying to facilitate the development of the $1.5 million site next to Albany Entertainment Centre, including its latest effort with the developer and operator consortium of Diploma Group and Quest Serviced Apartments.

Lands Minister Terry Redman told the Albany Advertiser yesterday the latest efforts to "incentivise" the development had failed.

In May, LandCorp was hopeful the development would come to fruition after Diploma Group returned to the discussion table after initially walking away because of concerns about its viability.

"The State Government spent many months on a development submission by Diploma-Quest in a bid to provide as much support as possible to help bring the people of Albany their much-wanted hotel to that site," Mr Redman said.

"This involved a package of incentives, under the State Government's hotel development incentives policy, including offering the developer the $1.5 million site for free. "The site has previously gone to market three times, but interested parties were unable to progress submissions due to its lack of commercial viability, a factor which contributed to this bid being unsuccessful."

Mr Redman said he was "bitterly disappointed" the waterfront hotel would not go ahead and market conditions would have to improve for hope of a development proceeding in the future.

"I have now asked LandCorp to meet with the City of Albany and key Government and industry bodies to discuss future options for the site," he said.

"I have also encouraged LandCorp to maintain a dialogue with Diploma to investigate potential developments for the site."

Albany MP Peter Watson said the failed negotiations were "extremely disappointing" and he believed LandCorp and the State Government had "gone to sleep at the wheel" with their handling of Albany's two prime vacant hotel sites.

"They have had adequate time to deal with both parties," he said.

"It's an absolute disgrace to have two empty hotel sites.

"We have to look at alternatives.

"We have got to have some sort of accommodation down there."

Diploma Group refused to comment.