A £11.4 million funding deal will be needed to get the first phase of Weymouth’s Peninsula development underway.

Borough councillors are being asked to approve a finance deal for the scheme at their meeting this Thursday – although the shadow executive of the Dorset Council will also need to give its approval.

The decision includes agreeing a confidential business case paper.

Borough councillors are also being asked to spend £250,000 from the harbour reserve fund to demolish the former ferry terminal building and create new car parking spaces.

Borough council development director Martin Hamilton will tell councillors that the scheme will generate enough income to both repay the borrowing and generate a surplus: “Phase 1 of the regeneration is self-sufficient, requiring no subsidy, and in fact generating a surplus income. This will allow reserves to be built up for future works to harbour walls, reducing demands for general capital funding and insulating the successor Dorset Council to future harbour needs,” he said in a report to the council.

“Making progress with the peninsula development will be an important statement of intent by WPBC, demonstrating its commitment to address the town’s challenges through redeveloping a key and challenging site.”

A planning application for the site is expected to be considered before the end of the year. The initial phase is expected to include a 100-bed hotel, a pub/diner with accommodation, cafe, public spaces including cycleways and pavements and improvements to the immediate area of the harbour.

Council projections believe that when completed the full scheme will attract 2,400 visitors a week and will create 150 jobs during the construction phase.

It claims the finished scheme will add 140 jobs to the local economy, bring in additional accommodation spending of £9.1m over 10 years with an additional £30million in visitor spending in the town.

“This regeneration scheme will create employment, strengthen the Weymouth Town Centre offer, improve the local accommodation and leisure offer and enhance the visitor economy. It will also assist in securing the long term viability of Weymouth Harbour and funding of the council’s statutory functions as an Statutory Harbour Authority, without needing to fund any shortfall solely from increased harbour dues and charges.”

Opponents of the scheme claim that there is no need for another hotel or restaurants and say their existence could lead to further closures in the town centre. There are also fears about the loss of car parking spaces which, it is believed, may have a detrimental effect on the viability of the Pavilion.

Jason West, co-founder of Weyforward, says there should be more community space and inspiring design features, describing the proposed layout as uninspiring.