Townsville’s Hilton hotel developer accuses council of failing $60m project, ratepayers

Townsville’s Hilton hotel developer has accused the council of failures in supporting their $60m project, including ignoring 25 emails over the past two months.

Focus Pacific Australasia director Michael Graham is bitterly disappointed that he won't be able to build the $60 million hotel next to Queensland Country Bank Stadium after it was rejected by Townsville City Council. Picture: Evan Morgan

Townsville’s $60m Hilton hotel loss will be Toowoomba’s gain according to its frustrated developer who claims his frantic efforts to seek an extension for the project were ignored by Townsville City Council.

After successfully overcoming delays created by the pandemic and a challenging construction environment, builders were on the cusp of breaking ground at the fenced Hilton Garden Inn project site next to Queensland Country Bank Stadium.

The developer, HHNQ (part of the Focus Pacific group) chief executive Michael Graham was blindsided by a media release from Townsville City Council on Wednesday saying the hotel would “no longer proceed, after expiry of the development arrangements”, and would now consider alternative opportunities.

A fifth-generation born and bred Townsville resident, Mr Graham was incensed by the way their privately-funded, 186-room project, had been derailed after investing five years and more than $2.3m towards realising it.

The project promised to create 50 construction jobs, 42 operational roles, and support hundreds of indirect jobs, with a previous AEC report forecasting an annual benefit of $25m for the city.

Focus Pacific Australasia director Michael Graham was ready to turn the sod on the Hilton Garden Inn project. Picture: Evan Morgan

Mr Graham accused the council of never really acting as a “genuine partner to the project, despite them being the instigator and importantly our future landlord”.

“It’s an absolute disgrace that council has denied our request for a (less than three month) extension given we have been ready to start construction for several months now and simply required some formal approvals to proceed with our works,” he said.

“It’s even further disappointing that the council weren’t prepared to meet with us to discuss their position, despite numerous requests to do so. This is in addition to more than 25 emails going unanswered over the past two months.

“How could council make such a decision without first seeking a meeting with myself to explain in detail the status of our project and the benefits to the city.”

He said they had proved to council that their full construction program would have seen the hotel delivered sooner than council’s own expectations and demands and had indicated in May that the hotel would have opened by December 2025.

Interior images of Townsville's proposed Hilton Garden Inn project. Picture: Focus Pacific.

“This clearly demonstrates that council sees itself as being immune from acting commercially, collaboratively, reasonably and ethically. I genuinely believe Council has failed its ratepayers as they easily could have supported this project proceeding,” he said.

“The value of bringing a Hilton-branded hotel to town cannot be overstated. This project would have been outstanding for the city, and no doubt would have delivered significant economic and social benefits to the region.

“One would ask whether council had an agenda to deliberately derail our project, no doubt with a belief they had alternative options for our site.”

New architectural drawings of the Hilton Garden Inn, which was proposed to be built next to Queensland Country Bank Stadium. Picture: Conrad Gargett.

While he could understand the council’s desire to see the project underway, consideration needed to be given to the impact of Covid when no hotels were being built, followed by unprecedented rises in construction prices over the past two years.

“We were forced to make significant changes to our construction methodology and that simply required more time,” he said.

Interior images of Townsville's proposed Hilton Garden Inn project. Picture: Focus Pacific.

“The sad part is I keep seeing how other regions such as Cairns, Mackay, Gold Coast, Sunshine Coast and Toowoomba continue to outperform Townsville. It’s no wonder there are very few cranes on the skyline or projects actually being delivered in the city.

“We are likely to now exit Townsville completely, and instead, we will fast-track our plans to deliver a Hilton Garden Inn in Toowoomba, which will be a huge win for Toowoomba and a massive loss for Townsville … and it didn’t need to be the case.”

Townsville City Council responds to Hilton developer’s accusations

A Townsville City Council spokesman has hit back at Mr Graham’s claims about a lack of support for the Hilton project, saying its support extended back to 2017.

“Council has worked alongside the developer to adopt a number of significant changes, including the design and rebranding of the project from a DoubleTree to a Garden Inn,” the spokesman said.

“Over this time Council has continued to support HHNQ, agreeing to numerous extensions for the continuation of the project.

New architectural drawings of the Hilton Garden Inn, which was proposed to be built next to Queensland Country Bank Stadium. Picture: Conrad Gargett.

“The arrangements have been reset and extended various times since Covid to account for the impacts of the global pandemic, supply chain issues and other reasons offered by developer HHNQ. The developer has had several years post-Covid to progress the project.”

He said key milestones, which were agreed to by both parties, were not achieved by the developer.

“The end of the project was not due to the Council’s performance or actions. This was a consequence agreed to and understood by the developer,” he said.

“HHNQ was advised ahead of time that no further extensions would be permitted. Council is not obligated to vary its contracts because a party requests it to, particularly if Council has made it clear that further extensions of time will not be permitted.

“Council has invested significant time, cost and effort into this proposal and rejects the characterisation that the organisation did not ‘act as a genuine partner’ as the contractual arrangements and Council’s expectations of the developer were always clear.”

The council will now consider alternative opportunities for this site, and consult with key stakeholders as part of its strategy for development of the North Queensland Stadium Precinct.

Originally published as Townsville’s Hilton hotel developer accuses council of failing $60m project, ratepayers