$80m+ Wellington builder Armstrong Downes in liquidation, 152-unit CBD project frozen

Armstrong Downes Commercial is working on the Frank Kitts Park redevelopment. Photo / LinkedIn

A large Wellington commercial building business which worked on school projects and one of the city's largest apartment developments has gone into liquidation, resulting in security guards being posted at the residential site which today stands silent.

Shareholders in Armstrong Downes Commercial 2012 put their company in the hands of David Ruscoe and Russell Moore of Grant Thornton, according to Companies office records.

The first report is yet to be issued on the builder, undertaking projects sector insiders said today were worth around at least $80 million.

The Hutt Valley-headquartered company worked throughout the Wellington region for the last 20 years and undertook a number of jobs for the Government.

Hutt Valley High School's $8.6m redevelopment, Chilton St James and Karori West Normal School were education projects the business listed amongst its achievements.

"It's a surprise," one sector leader said of the liquidation.

"It happened fast and it's a reflection of the unstable market. Everyone is busy, but the pressures at the financial end to make sure these things are still delivering."

The business said it specialised in Government, rеtаіl, education, community, office, industrial and multi-unit рrоjесtѕ in the Wellington region.

"With price rises, Covid and perhaps under-pricing on jobs, it's not that much of a surprise," said one sector leader. "To be honest, it was on the cards," the insider said from Wellington today.

The company was building Te Aro's $50m 152-unit Taranaki St project, The Paddington. That is around 80 per cent complete, the insider estimated. The liquidators have security guards at the gates this morning and no work is continuing there right now, he said.

Yet it's fully sold out and no doubt people who put down deposits will be asking what will happen next, he said.

The Paddington is a low-rise terraced apartment. It's advertised as sold-out.

In Lower Hutt on High St, the company was working on converting an office building to apartments.

"They were also doing quite a bit of work for the Ministry of Education, working on new buildings or refurbishments at around four to five schools in the area," the sector leader said.

Armstrong Downes Commercial is owned by 2 HB. Its directors are Tony Doile of Lower Hutt and Simon Taylor of Mt Maunganui.

The building business was working on a Wellington City Council park on the waterfront in a job worth about $6m, redeveloping the Frank Kitts Park. It went to schools in the area to engage them in designing a special mural on the fences around the job.

"We are proud to be Hutt Valley-based and owned, the Wellington region is our home," the company said.

"Our 20-plus years of building in the Wellington region and the personal approach we bring to each and every site sees our clients and architects coming back to us year after year. Our unique strength is our in-house local team, combined with hand-picked external professionals, individually selected for each project.

Brandon House is owned by Robt. Jones Holdings. Photo / LinkedIn

"Many of these have worked with us since the early days and are completely committed to each project. You can be assured that we always work hard, work smart and bring the same care to your project as if it were our own," Armstrong Downes said.

It worked on Brandon House at 149 Featherston St in the centre of Wellington and was proud that it was nominated for a Property Council award in 2022.

Robt. Jones Holdings bought that large office tower in 2016 and undertook a major refurbishment. It stripped the building back to its core. Refurbishment saw two new floors of wood added, new glass facade applies, as well as new lifts, fire and air-conditioning system.

Armstrong Downes said it was "fantastic" to see the project recognised among the best in New Zealand.

A statement from the liquidators said: "Two of the company's largest construction projects are suffering substantial losses as a result of being fixed price in an economic environment of spiralling costs, procurement challenges, and labour shortages.

"Following an unsuccessful attempt at restructuring the company's contracts, it has been decided the appointment of liquidators is in the best interests of customers, sub-contractors and other stakeholders to minimise further losses."

The builder has eight projects on. Armstrong Downes Commercial is the head contractor in most cases but does not directly employ staff. The workers are employed by other Armstrong Downes group companies, the liquidators said.

No other Armstrong Downes companies are in liquidation.

The liquidators control the sites, closed for a limited period as they examine the projects.

"These sites have been temporarily closed as it's in the best interests of all stakeholders to protect both ADC and third-party assets, and to allow time to assess available options for each site going forward," Ruscoe said.

Assets would be returned to subcontractors as soon as practicable.

Grant Thornton will be contacting customers and suppliers about its appointment in the next few days.

The first report is due out in five working days and that might give more of an indication of what's happened with the builder.

The company's Hutt Valley main phone line is not being answered today and all inquiries are being referred to the liquidator.