Elected Member Briefing Note - 1-5 High Street timeline of decisions

About this Briefing Note

Report by: Thomas Glen, Chief Executive

Date: 11 February 2026

Subject: 1-5 High Street briefing for Council

Details

Purpose

As instructed by Council at the meeting on Wednesday 14 January 2026, this briefing note has been prepared to provide a timeline of decisions and when information was available to inform the discussions at Council in December in relation to the future of the building at 1-5 High Street.

The instruction of Council was for a briefing note which includes:

• Timeline and what occurred when
• Confirmation of the basis of negotiations with the directors of Lock Terrace after Henley Group went into administration
• Whether additional information, if available at the December Council meeting, would have indicated a significant change in circumstances

As agreed by Council this briefing note has been published on our website after circulation to elected members. Please note that the version of this briefing note emailed to elected members included direct links to private committee papers which are not accessible by the public, for the purposes of sharing this briefing note publicly these have been replaced on this page with links to the publicly available minutes of those meetings as these include the decisions made on the private papers.

Timeline and engagement with Henley Group/ Lock Terrace

Please note a summary timeline was provided as part of the information note provided to Council on the morning of the December meeting and published as an addendum to the reports. This is a longer version of that timeline to provide more insight into the circumstances and decisions and to include the email correspondence which subsequently emerged about other interest in the building.

2011

Perth Office Accommodation Review concludes that listed status, complex layout and areas of historic interest offered limited re-use options for the building. Suggested subdivision might work, but would not be commercially viable in local market without significant public sector contribution. External property consultants who carried out the assessment advised Council to sell instead.

2012

• Property consultant appointed to assess if 1-5 High Street could become a hotel. Reached similar conclusion to 2011 consultant, ie that building complexities would appeal to a niche developer and would be unlikely without public sector grant.
• The then Council Leader agreed that the building could be soft market tested through property agents to establish market appetite and a handful of interested parties viewed the property. The only external interest (Scottish Youth Hostel Association) withdrew after survey, concluding that costs of conversion were unviable without the Council first undertaking boiler and heater replacement and other works. No further marketing was undertaken as consideration of the building became wrapped up in the rationalisation of the Council's city centre portfolio.
• 19 December - report on essential maintenance and compliance works (Report No. 12/597) noted that the rationalisation of Council's city centre property portfolio excluded 1-5 High Street as, outwith the remaining services delivered from the ground floor, the higher floors were neither safe nor suitable for employees to be working in.

2013

Perth City Plan report to Council on 1 May (Report No. 13/216) identified need for additional choice in local hotel accommodation to support growth of city centre market. 

2014

8 October - report to Council on Perth Office Programme (Report No. 14/439 - a private paper which Councillors can access, but for public purposes the decisions made are recorded in the meeting minutes) notes that 1-5 High Street remains outwith scope of the programme, however, agreed that a further report is brought back on possible options for the building.  

2015

• 1 July - refocused Perth City Plan developed with business representatives on the Perth City Development Board highlights lack of 4/5 star hotel accommodation in the city is a constraint on the conference and tourism market. 1-5 High Street was not identified as a potential site for the hotel in the draft Perth City Plan presented to Council in Report No. 15/298. 
• 18 November - Council approved Perth Office Programme (Report No. 15/536) and accepted a recommendation to progress refurbishment of 2 High Street. In relation to 1-5 High Street elected members unanimously agreed to note the preliminary technical review of the refurbishment of the offices there at a cost of £3.3m (at 2015 prices and reflective of the building upgrade requirements at that time). 
• Council also agreed to instruct consideration of the potential future of the building as part of the Corporate Property Asset Management Review. 
  • It was noted in the report that the relocation of the existing Chambers to the Old Chambers room at 1-5 High Street was discounted because it was not large enough to accommodate all elected members, officers and members of the public, and that together with the upgrades including disabled access which would be required, meant that it was not a practical option.
  • It was also noted that all city centre workstation needs for the Council could be absorbed in 2 High Street, Pullar House, St Martin's House, and Carpenter House.

2017

22 June report to Council on support for Perth City Economy (Report No. 16/282) does not mention 1-5 High Street, but references preparation of Smart Growth Prospectus via the Scottish Cities Alliance in respect of hotels, housing and renewables.

2018

• Work with Scottish Development International (SDI) to secure new hotel investment in Perth and Kinross ongoing and 1-5 High Street mentioned in informal discussions as possibility. Hotel consultants appointed to assess the local market showed an undersupply of around 100-125 rooms of 4 star quality.
• 28 November - update to Strategic Policy and Resources Committee on Corporate Property Asset Management Transformation Programme (Report No. 18/387) highlighted 1-5 High Street and the remaining leased office accommodation should be part of a second phase of the Perth Office Programme.

2019

• Spring 2019 with support of SDI and Scottish Cities Alliance presentations and meetings were held at Scotland House in London and at MIPIM, the world's largest real estate investment event, to promote Perth as a hotel development opportunity. A number of developers, investors and operators agreed to visit Perth. However, only three specifically expressed an interest in a redevelopment project rather than a new build or purchasing an existing hotel.
• 14 August - confidential briefing given to the then Council Leaders setting out the rationale for identifying 1-5 High Street as surplus to operational requirements and commence a three-month marketing exercise for potential hotel developers, a proposal which was consistent with previous reports to committee set out above on the need for a hotel and 1-5 High Street's unsuitability for future operational use by the Council. That confidential briefing also highlighted that the 'significant financial support' by way of a conservation grant for built heritage in the region of £1.5-2 million would be required in order to deliver a viable development. Following agreement to the approach by Council Leaders, on 29 August 2019 the then Executive Director (Environment) declared the property surplus to operational requirements. This declaration was carried out under the delegated powers authorised by Section 3 of the Scheme of the Administration at that time (section 37.17 of the current Scheme of Administration is the current version of the same delegated authority). 
• November - Consultants Avison Young marketed 1-5 High Street as a hotel opportunity on behalf of the Council. The marketing material says that heritage grant support for the restoration of the prominent listed building may be available.
• 18 December - Perth Common Good Fund Committee (Report No. 19/373) advised that 1-5 High Street has been declared surplus to Council requirements with a view to securing a hotel developer. The report advises that this option is regarded by officers as the only viable use for it and recommends disposal by sale or long lease, noting that marketing would conclude in mid-January 2020. Committee members agreed that a report on disposal should be brought back when the outcome of the marketing and the statutory consultation under the Community Empowerment (Scotland) Act 2015 have concluded.
• 18 December - full Council endorsed draft updated Perth City Plan (Report No. 19/360) developed by the business-led Perth City Development Board, which refers to having a new 4/5 star hotel open in Perth as an ambition for 2025.

2020

• 17 January - closing date for submission of offers to formal marketing of the building as a hotel only Henley Homes Group submitted a compliant bid. Due diligence was carried out as part of the bid by Avison Young consultants who had supported the Council with the marketing of the building.
• 30 January-27 March - statutory consultation on proposed reuse of former Council Chambers and Justice of the Peace Court within hotel development. 24 responses received with 62.5% of respondents either strongly agreeing or agreeing with the proposed redevelopment for this purpose.
• 20 May - briefing in private session of full Council on progress of 1-5 High Street disposal. While it was originally intended to be a report to Council to progress the disposal, in the days leading up to the meeting it became clear that elected members had a number of outstanding questions and the report was withdrawn in favour of a verbal briefing by the then Head of Planning and Development. Following the briefing it was agreed by Council that the report would be submitted to the Council meeting on 24 June 2020 for consideration.
• May - as a result of questions which had been asked during the presentation to Councillors cost consultants were appointed to revisit potential of subdividing the building as a residential conversion. This concluded that while the scale of the rooms overlooking Tay Street (excluding Old Chamber and courtroom) offered opportunity to create quality residential environment, depth of the building meant that this would be likely to create internal rooms with no natural light, limiting design options. Consultants concluded that around 50% of the theoretical number of potential flats would not be capable of providing a suitable residential environment and as a result the redevelopment of the building for housing was financially unviable even with Council grant funding and sale of the building at nil value. This was reported to Council as part of the June/July reports on the disposal of the building.
• 24 June - Report 20/106 (private paper requiring additional login, decisions recorded in meeting minutes) recommending Henley Homes Group is confirmed as the preferred bidder and noting approval also required by Perth Common Good Fund Committee was taken by Council in private session. Following a recess Council resolved to defer consideration of the report to the July meeting.
• 30 July - Updated report 20/128 (private paper requiring additional login, decisions recorded in meeting minutes) and including additional appendix with preliminary due diligence information on Henley Homes Group which had not been available with the June report, brought to Council. While the report recommendations did not change between the two, the July version of the report offered more detail on the heritage grant arrangements and on the preferred bidder process safeguards which were in place. Following an amendment to defer the appointment of a preferred bidder, the majority of Councillors voted for the motion to confirm Henley Homes Group as the preferred bidder.
• 19 October 2020 - Perth Common Good Fund approved (Report No. 20/187) disposal of 1-5 High Street as a hotel, and the required court process for disposal was subsequently undertaken.

2020-2022

The process to develop proposals was paused to allow time for market conditions caused by the Covid-19 pandemic and related uncertainty which particularly impacted on the hospitality market.

2021

On 23 June Perth Sheriff Court Consent granted for the disposal of 1-5 High Street for the redevelopment of the building as a hotel. This was required as 1-5 High St formed part of the Common Good. 

2022

• March - external advisors carried out a re-assessment of the current hotel development market. This assessment confirmed the continuing need for additional hotel rooms in Perth city, and that the Henley Homes Group proposal would contribute to meeting that need.
• 27 April, Council considered an update report (Report 22/107 - private paper requiring additional login, decisions recorded in meeting minutes) on progress of the bid and agreed that a development lease should be entered into with Henley Homes Group, or their nominees, with an option to purchase the building on completion. Council further agreed that should Henley Homes Group or their nominees fail to conclude a development lease the property should be remarketed at the earliest opportunity.
• Following the May 2022 elections progress updates were provided to the new Council Leader/Depute Leader in June and December.

2023

• 14 February - Lock Terrace Ltd incorporated by directors of Henley Homes PLC, Tariq Usmani MBE and Kashif Usmani.
• April - At both the Council Leaders and Independents' Group meetings with ELT clarification was sought on whether any decision to extend the purchase timescales for the developer would need to come back to Council for approval. Officers advised that elected members would be kept updated on any developments.
• 21 August - Administrator appointed for Henley Homes PLC. Rogue City Hotel Group, the hotel division of Henley Homes Group, remained operational and assured officers of their continued commitment to the development of 1-5 High Street. The April 2022 decision of Council approved a development lease with Henley Homes Group or their nominees, and the bid proposal attached to the Council report was in the names of both the Henley Group and Rogue City Hotel Group. On that basis officers continued to engage with Rogue City Hotel Group to see if the scheme could still be delivered and achieve the additional hotel accommodation and positive addition to the city centre visitor economy which Council had restated support for on multiple occasions, despite the situation Henley Homes were in.
• 23 September - Email received from Craig Wallace of Wilsons Pet Food to the general Estates Team email enquiring about the status and availability of 1-5 High Street. No details were provided about what the extent of the interest was and no proposal made at that time.
• 25 September - Email response sent from Council Estates and Commercial Investment Team advising that the current position was that there was a proposal agreed by Council for the property to be developed as a boutique hotel, and was therefore not available. The email did indicate that the hotel proposal was on hold, but said that the situation may be reviewed in March 2024. The offer was made of assistance to help identify other large office premises in the Perth city area or further afield if Mr Wallace wished.
• 26 September - Mr Wallace replied to say that it was a "special interest in this particular property" and said he would wait to hear what the outcome was.
•  As there was no indication that Mr Wallace was interested in developing the property as a hotel there was no further follow-up by Council officers. 

2024

• 5 August - Liquidation/winding up of Henley Homes PLC commenced.
• Officers continued to keep in contact with Tariq Usmani MBE and Kashif Usmani the directors of Lock Terrace Ltd/ Rogue City Hotel Group to establish if their interest in the hotel development remained. Given previous decisions of Council and the disposal of the Common Good interest in the building had been based on hotel use only, and that the two directors had been heavily involved in the only valid bid received and one which had been accepted by Council, officers considered that it was reasonable to give Lock Terrace Ltd time to establish their updated proposals for the building so that these could be considered. During this time informal internal conversations were had about the potential process for transferring preferred bidder status from Henley Homes Group to Lock Terrace Ltd.
• 17 October - Lock Terrace Ltd submitted a planning application to transform 1-5 High Street into a hotel.

2025

• April - Dunalastair Hotel Suites, part of Rogue City Hotel Group, goes into administration. Subsequently there is media reporting that Rogue Hotel Group is being closed down, and on 1 July 2025 Rogue City Hotel Group Limited was dissolved. The New Rogue City Hotel Group, which will be the parent brand family for The Heiton Hotel, was incorporated on the same day.
• 22 April - at Independents' Group meeting with ELT information was provided about the promoter of the project having another company interested in taking it forward and that the Council's Legal team were reviewing the process that would be required.
• After consideration of the circumstances Legal colleagues advised that as Lock Terrace Ltd had not been part of the Henley Group or named in the submission a request would need to be made to Council to transfer preferred bidder status to them. It was agreed that this process should align with the planning application, as if the planning application was rejected this would negate the need for preferred bidder status to be transferred.
• 28 April - Briefing at Joint Leaders meeting (representatives from all Councillor groups) advised that Lock Terrace were now to apply for planning permission (anticipated July) and that a further report would come to Council in September with options and risk assessment to allow an informed decision.
• 20 May 2025 - following local media coverage on the closures, Mr Wallace emailed the Council's Estate Team generic email again to ask if there was an opportunity to have a discussion about the property now. He received a response the same day advising that as far as the Estates officer was aware the option for a hotel was being pursued, but offered to pass Mr Wallace's questions to a senior colleague for a response. Mr Wallace replied indicating he would welcome an introduction to anyone with more information.
  • Unfortunately, while this email was forwarded to relevant officers, it was not picked up during a period of annual leave and Mr Wallace did not receive a response to his request for introduction. This falls below our customer service standards and processes have been reviewed to avoid this happening again. However, as at this stage a planning application for a hotel was in process and work was starting on a due diligence exercise to inform future reporting to Council, and there was still no indication that Mr Wallace's interest would have been in developing the building as a hotel, the response to him at that time would have been to advise that there remained an active proposal for the site.
• 27 October - update provided to SNP/Lib-Dems Joint Leaders meeting on updated timescales for report to be brought to Council in December, and providing information on the due diligence exercise underway to inform the report. Also advised that an Elected Member briefing session would be arranged ahead of the meeting of Council.
  • The financial due diligence exercise was undertaken by the Council's finance team to incorporate Lock Terrace Ltd and its directors, as well as certain other related companies, to ascertain the level of financial risk to the Council. The conclusion of this due diligence informed the report to Council in December, and resulted in the mitigations to provide evidence of full project funding before the development agreement is signed, and that the grant funding provided by the Council would be paid in stages, based on evidenced spend by the developer.
• 5 November 2025 - planning application for 1-5 High Street approved by Planning and Placemaking Committee.
• 17 November 2025 - Elected Member briefing session held to provide detailed update and background on progress around the 1-5 High Street proposals ahead of the publication of the report for Council.
• 10 December 2025 - Council approved proposal to nominate Lock Terrace Ltd and its directors as the developers for a hotel at 1-5 High Street, now named the 'Heiton' hotel.

Councillor briefing session on 10 December 2025

The report on 1-5 High Street was presented to Council on 10 December as a public report. As you are aware, to supplement this a private briefing session was organised during the lunch break. This session gave elected members who had missed the 17 November briefing an opportunity to ask questions of officers and the directors of Lock Terrace. The forum enabled more open discussion about information considered too commercially sensitive for the public meeting. It also allowed elected members to seek clarity on the intentions and background of Lock Terrace's directors, helping them make an informed decision on the report proposals from a due diligence perspective.

Response to questions about 'other interest'

When Councillor Colin Stewart asked about other interest in 1-5 High Street during the members' briefing session on 10 December 2025, he was answered to the best of the knowledge of the officers in that room. As they were unaware of Mr Wallace's two emails at that time the answer was given based on the formal bidding process, during which there had only been the one viable bid submitted. This was not addressed in the public session of Council because the question was not re-asked of officers, however, if it had been the answer would have been the same as there was no change in the information officers in the room had that day.

Further enquiries were however made in January because of Councillor Stewart's reference to there having possibly been email correspondence. It was at this time that the emails from Mr Wallace were identified. However, as they were received as general enquiries, and there was no indication from either the emails or Mr Wallace's previous dealings with the Council that he would be interested in developing a hotel, these were not considered to be relevant indications of interest. Their existence would therefore not have changed the recommendations of the December 2025 report to Council even if the report author had been aware of them. However, if the officers at the private briefing session had been aware of them, they would have described these in response to Cllr Stewart's question at that time.

Serge Merone, Strategic Lead - Economy, Development and Planning has subsequently apologised to Mr Wallace for the lack of response to his May 2025 correspondence and has met with him to explain that the decision of Council had only allowed the marketing of 1-5 High Street for development as a hotel. Mr Wallace confirmed that he is not interested in developing 1-5 High Street, or any other property, as a hotel, but was interested in other business use for the building.

The Estates Team have also reviewed how emails received by the generic team email account are managed to ensure that these are logged and a process is in place to follow these up.

Response to question about refurbishment costs

As you will see from the timeline above the projected refurbishment costs of the building as office accommodation in 2015 was £3.3m at that time. This figure reflects not only the costs of material and services at that time, but also the building upgrade requirements which were then required.

Over the last 10 years the building has received limited investment beyond general planned and unplanned maintenance works, reflective of the need to focus Council budgets on buildings in active use. As such 1-5 High Street has continued to deteriorate internally and externally, now requiring more extensive refurbishment works. Some deterioration in the building's condition has been evidenced in the visual surveys carried out, however, to understand the full extent of building improvements would require full intrusive surveys and a detailed cost assessment based on current pricing.

In the absence of this information, the estimated costs for refurbishment provided in response to Councillor questions on 10 December, was a high-level cost projection. As explained by John Beveridge, Strategic Lead - Property Services, in his response to Council, the figure he provided was an assessment of the likely costs of refurbishment based on the current price per square metre prices. The pricing rate used was from the Building Cost Information Services (the UK industry standard for indicative cost assessments). Applying the rate which reflects the building's listing, condition and the unknown nature of further issues which only an intrusive survey would uncover, the highest rate of £4,731 was used. Applied to the Gross Internal Floor Area of the building this resulted in the upwards of £11m estimate provided to Council. 

Do these circumstances represent a significant change in circumstances?

As elected members are aware the decision-making processes are as set out in Section 23 of Standing Orders, including the rule not to alter or revoke a decision within six months from the date of such a decision being made.

As set out previously in this briefing note it is the position of officers that if the email enquiries about the building for use other than a hotel had been known to the report authors it would not have changed their recommendation. 

In addition to the question of other interest, a further question has been posed to officers about the estimated average running costs provided to Council at the meeting in December 2025. The information provided by officers to the meeting was accurate and explained that the figure provided in the report was average costs over the period and had reduced in recent years. An Elected Member Briefing Note was subsequently issued to members in January 2026 to clarify any confusion and provide a fuller breakdown. As set out in that briefing the actual running costs since 2011 have totalled £2.059 million, with reduced running costs over the last few years which are directly related to the building being vacant with reduced services being carried out. This has in turn lowered the overall average running costs to below the £143K noted in the report.  Progressing with the project removes the ongoing maintenance costs being faced by Council. However, any further delays in progressing the project will increase the likelihood of further deterioration of the building and associated increases in unplanned maintenance costs. 

Taking into account the information set out above on the suggested alternative interest in the building and the more detailed running costs, officers are of the view that these do not constitute a significant change in circumstances. The project approved by Council in December continues to deliver on what Council has asked of officers, which was to deliver a positive addition to the visitor economy in Perth and address a long-established need for additional quality hotel accommodation in the city centre. 

Officers are continuing to work to deliver on the Council's aspirations to improve our visitor offer in Perth as per the multiple instructions of Council set out within the timeline within this report and do so without being beholden to any other party. The delivery of the project remains subject to the conditions set out through the report to Council and the formal planning process. The design programme including architects design is underway with construction works planned to start in May. The developers expect the project to be concluded and delivered by October 2027.