BELFAST BRIEFING:What has happened to the plan to transform an old government building into a posh aparthotel?

A GROWING number of ambitious projects in Belfast are coming under threat due to the downturn. The latest appears to be the £20 million (€23.48 million) regeneration of Armagh House, a disused former government building close to the city centre.

Two years ago, the North’s Minister for Social Development, Margaret Ritchie, unveiled details of a multimillion-pound project to transform Armagh House into an upmarket aparthotel that would cater for visitors who wanted the flexibility of an apartment with the advantages of a hotel.

It was envisaged that 30 apartments would be developed on the site, including two penthouse suites.

According to the Minister, the project would bring “significant new jobs” to the area, with an estimated 71 full-time and 20 part-time jobs.

The Department for Social Development awarded the contract for the project to Tullymore House, a Northern Ireland company owned by well-known local hoteliers Nicholas and Paul Hill.

The Ballymena-based Hill brothers own the luxury Galgorm Resort and Spa and until last year owned Belfast boutique hotel Ten Square.

The Hill brothers were selected as the “preferred developer” of Armagh House only after other bidders had been ruled out by the department’s Belfast regeneration office.

At the time, Ritchie said her department’s selection process had been extensive.

“I believe the proposal presented by Nicholas and Paul Hill offers an opportunity to create something new for Belfast which will bring quality development, vitality and vibrancy to this area and long-term benefit to the local community through the creation of new employment opportunities,” she said.

Paul Hill was equally optimistic about the project two years ago.

Speaking at the launch of the scheme, he said it represented a “long-term commitment” by his firm. He intended “to sympathetically restore and extend” the old building to produce a “unique luxury development”.

Work was expected to begin on transforming Armagh House from an empty shell into a luxury respite last autumn. But the building, despite its prime location, remains in its same sorry state.

So what has happened to the ambitious plans for the site?

Firstly, despite all appearances to the contrary two years ago, everything was not quite signed and sealed on the Armagh House project between the Department for Social Development and Tullymore House.

In spite of the extensive tender process and the cost to the public purse of selecting a developer, not everything was agreed with Tullymore House.

According to Tullymore House finance director Karen Dundee, the department released details pertaining to the bid process, “with no formal contract signed”.

Secondly, the local landscape has changed dramatically since the Hill brothers won the bid to develop Armagh House.

They no longer operate a boutique hotel in Belfast following the sale of Ten Square to Northern Ireland businessman John Miskelly, so Armagh House does not “complement” the Hills’ interests as it previously did.

Thirdly, there is the not insignificant factor of the downturn in the local economy to consider.

Although Tullymore House maintains that there “is still an interest in the regeneration project”, it has hinted that it is unlikely to proceed with its original plans for the scheme unless it is “at a price reflective of the current market value”.

The Department for Social Development is keen to point out that it is still in contact with representatives of Tullymore House and has held discussions relating to the terms of a contract for the regeneration of Armagh House.

A spokesman for the department added: “In the present economic climate, these discussions tend to take some time. Retendering is not under consideration at this time.”

But if the current state of play is anything to go by, the £20 million regeneration of Armagh House, along with the economic benefits it could deliver for Belfast, is looking increasingly uncertain.

Meanwhile, on a more positive note, 70 jobs that were under threat at Co Armagh plastics manufacturer Reflex Mouldings, which went into administration in June, have been saved following the sale of the business.

Administrator PricewaterhouseCoopers has confirmed that Lisburn-based FHS Group acquired Reflex Mouldings and its assets for an undisclosed sum.