Westminster City Council has given planning permission to plans to turn Admiralty Arch into a five-star hotel, luxury housing and a private club.
The government sold a 99-year lease for the Grade I-listed former government office building to Prime Investors Capital for £60m in October 2012.
A contractor has yet to be appointed to the scheme. A spokeswoman for PIC said it was “currently in the process of working out the procurement of a contractor and other appointments”.
The Cabinet Office said PIC had been working with a team of 20 British experts to “ensure Admiralty Arch’s rich history will be both preserved and celebrated”.
London-based Blair Associates Architecture plans to transform the landmark into a 100-bedroom hotel with a basement ballroom, 25 m pool, spa, three restaurants and a brasserie on the first bridging floor over the Sovereign Arch, with views of The Mall and Buckingham Palace.
The architects have also worked on the restoration of the Connaught, Ritz, Berkeley and Claridge’s hotels.
Permission for the scheme was granted for the scheme to go ahead at the council’s planning applications sub-committee meeting, but there was disagreement about how much money should be put towards affordable housing.
The four-strong committee considered a council officer’s suggestion that the £100,000 developer Prime Investors Capital proposed to give for public art should be put towards affordable housing to make a total affordable housing contribution of £700,000.
Committee member David Boothroyd said he and another committee member wanted all the money spent on housing, while the two other members wanted to see the £100,000 spent on the public art proposed for the scheme, which involves putting statues in two empty plinths on the arch.
He said the chair’s casting vote meant the committee decided to go ahead with the public art contribution
Westminster council policy is that the developers should contribute just over £1m towards affordable housing and £824,563 to other section 106 obligations, such as a Crossrail contribution.
But scheme viability assessments by PIC and the council and instead proposed a total contribution of £700,000. PIC proposed that £600,000 go towards affordable housing and £100,000 for art and this was agreed by the commitee last night.
Mr Boothroyd said he thought the scheme could support the full £1m affordable housing contribution and voted against approving the project because he felt the proposed housing contribution was too low. The other three committee members voted to give planning permission to the scheme.
The arch, which was designed as a ceremonial passage from Trafalgar Square towards Buckingham Palace, had been used as government office space.
Construction will start in early 2014 and the hotel is expected to open in 2016.