The long-closed Castle Mona is unlikely ever to be a hotel again, its current owners admit.
Sefton Group boss Brett Martin said the aim was to sell the landmark into ‘sustainable use’– but doubted that would be as a hotel.
He said he was disappointed but not surprised that the Manx Education Foundation was no longer interested in leasing the building as a base for its proposed university centre for information and computer technology.
But he said the Sefton Group was actively talking to other potential purchasers and users.
Mr Martin said: ‘The property has been for sale for quite a while.
‘We initially had conversations with MEF which started quite a long time ago. They started off thinking it was a potentially good building. However, over the last seven to eight months their ardour had cooled somewhat.
‘When we heard that MEF were now looking elsewhere, it was a little disappointing but expected. It wasn’t really a surprise to us.
‘But it wasn’t the only option. We are talking to other people about the Castle Mona. We are still actively talking to people – potential purchasers and users – about options.
‘The idea is to sell it into sustainable use. I’m not sure whether that lies in hotel use. It could find a place in the world with a different use other than a hotel.’
If the MEF had gone ahead with the planned redevelopment of the Castle Mona as an ITC university, government would have underwritten the project to the tune of £5 million.
Earlier this year, the government agreed a £4.5 million bail-out of the debt-ridden Sefton Group, comprising a £1.3 million loan, repayable over five years, and the purchase and lease back of the Middlemarch site on Lord Street.
The company has reduced its debts by £72 million from a high of £96 million in the three years since new management took over following the departure of chief executive and director Graham Ferguson Lacey.
Mr Martin said the Castle Mona was valued for sale on the Sefton Group’s balance sheet for £4 million - roughly what the Group paid for it in 2007.
He said: ‘Our main focus these last couple of years has been the restructuring. We would like to get to a stage eventually where all the assets we own are earning their keep.’
He said that keeping an old building, which has not been in use for five years, came at a cost.
‘We are not looking to spend significant sums of money on the interior. But we have to keep on top of water ingress, drainage and security - that’s the reason why the windows are boarded up.’
He said the hotel, which was built in 1804 as the residence of the 4th Duke of Atholl, had a chequered history. But he said the nature of the building did not lend itself as an efficient hotel. He said he believed Mr Ferguson Lacey had been genuine in his intention of turning the Castle Mona into a 4* hotel when it was purchased by the Sefton Group in February 2007, two months after the hotel and leisure complex was closed suddenly by its previous owners.
But he said: ‘You have to bear in mind the world has changed since then.
‘The world was full of banks wanting to lend to businesses but by 2009 that whole business model had gone.’
Liberal Vannin MHK Peter Karran has written to the government’s buildings conservation officer to establish what safeguards had been carried out to protect ‘this important architectural and history [sic] building, which is part of our national heritage’.