Work has stopped on a project to demolish a riverside hotel in Newquay that was hit by fire twice in three months and replace it with new apartments. Developer Acorn Blue has confirmed that its plans for the former Hotel California are now on hold. The company had described the scheme as "an exclusive collection, featuring 20 apartments and four houses with direct river access, promises an unmatched blend of scenic beauty, innovative architecture, and commitment to sustainability that is set to redefine contemporary coastal living in Cornwall".
This is the second of the company's current housing developments in Cornwall to be suddenly halted. The 68-bed hotel closed for good in 2021 and sat empty for years, becoming increasingly derelict and attracting vandals, drug addicts and homeless people. In June and October 2024, the hotel on Pentire Crescent, which overlooks the River Gannel, burnt down twice and its roof collapsed. In February that year, CornwallLive revealed that the Hotel California was set to be demolished to make way for the new Acorn Blue development, after planning permission was granted by Cornwall Council.
The company has now confirmed that the project has been "paused" but it is still marketing the homes for sale. Acorn Blue cited "recent construction cost inflation and completing a review of certain construction methods and specifications" for the setback but insisted it has every intention to complete the project.
A spokesperson for Acorn Blue said: "Gannel Waterside is an exciting development that will deliver a collection of twenty-four high-quality new homes offering sweeping views over the River Gannel, Penpol Creek and the surrounding Crantock countryside. We remain fully committed to bringing the scheme forward.
"As with a number of development projects across the industry, we are currently addressing the impact of recent construction cost inflation and completing a review of certain construction methods and specifications. Works at Gannel Waterside have been temporarily paused while this review is completed.
"This is a temporary pause, and we expect works to recommence in the very near future. Prospective purchasers can continue to register their interest and reserve homes off-plan as the development progresses, and we look forward to progressing Gannel Waterside through to completion."
It is the second development Acorn Blue has paused. Earlier this spring, its scheme to transform the former Marks & Spencer store in Falmouth into upmarket flats came to a halt. Acorn Blue started work on the housing scheme in Falmouth last year but all work stopped several weeks ago, prompting rumours in the seaside town that the project may have collapsed or run out of cash. Again, Acorn Blue said it intends to complete the transformation of the former M&S into an exclusive development and denied it had run out of money or collapsed as a business.
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Acorn Blue Pauses Second Luxury Housing Project in Cornwall