Newcastle City Council purchased the four-star Crowne Plaza hotel, in the Stephenson Quarter, in 2025 after its previous owner was put into administration.
Stephenson Hotel Ltd, a subsidiary of the Clouston Group, owed the authority £39.5m after a series of loans which had to be written off and the council now hopes to use the profits from the hotel to claw back most of its investment.
Mark Nicholson, the council's chief finance officer, told councillors that the strategy was on track.
At a meeting last week, Nicholson said the council did not have "a plan that seeks X an exact amount of income from the hotel".
"We hold that asset to repay the debt we have written off in relation to that asset.
"It is effectively not income to the council, it is repaying that debt. But it is not written into our budget," he continued.
"I can provide some assurance that it is generating the expected level of return that will, over time, help us to reclaim the majority of that debt – if not all of that debt," Nicholson added.
According to the Local Democracy Reporting Service, the most recent administrators' report on Stephenson Hotel Ltd from May confirmed the council effectively agreed to buy the hotel and the company's other fixed charge assets at a value of £13.8m.
That was done via a write down of the debt it was owed, leaving a remaining shortfall of £25.7m.
