This apartment site was shut when the Herald visited today and subbies are complaining about not being paid. Video / NZ Herald
Creditors owed more than $5 million have now had liquidators appointed to apartment specialist Build Partners, which failed when it was building 95 Auckland and Wellington apartments for Kāinga Ora.
Companies Office records show a vote at a watershed meeting last week resulted inaccountants from Grant Thornton appointing liquidators.
The liquidators are charged with recovering as much for secured and unsecured creditors as possible. The accountants were previously Build Partners’ administrators.
Build Partners had entered voluntary administration when it was building the state homes. Rising material costs, labour shortages and other unforeseen factors hit the company.
The company owes 137 subcontractors at least $5.5m, according to the Crown housing agency.
Build Partners' state housing project in Johnsonville. Photo / Build Partners
Russell Moore and Stephen Keen are the liquidators.
Keen said today he expects the first report on the amount being claimed by creditors will be issued on Wednesday. Asked if the figure was still $5m, he indicated those details would not be released until then.
“You’ll be able to pick that up from the first report,” Keen said.
The company, whose chief was Steve Mikkelsen, was contracted to deliver four social housing projects:
Corner Great North Road/Cadman Avenue, Waterview – 40 units and a community room;
Hindmarsh Street, Johnsonville – 29 units and a community room;
Fowlds Ave, Sandringham – 15 units;
Hendon Ave/Hargest Terrace corner, Ōwairaka – nine units.
Patrick Dougherty, Kāinga Ora construction and innovation general manager, released a statement last month explaining the fallout: “In total there are 137 subcontractors and suppliers owed money by Build Partners totalling $5.585m, excluding GST.”
The Build Partners' site on Cadman Ave, Waterview, now taken over by Kāinga Ora. Photo / Jason Oxenham
New contracts have been struck so many of the 91 under-construction apartments in Auckland and Wellington can be finished and those needing state accommodation will be able to shift in soon.
Two associated companies, Evergreen Modular and Richardson Road, also have liquidators in charge.
Several creditors have contacted the Herald, saying they are desperate to know what’s happening because they had not been paid for months and had their own bills to cover.
A search of the Personal Properties Securities Register showed a long list of secured creditors including Bunnings, Plumbuilt Plumbing, BNZ, Hercules Cranes and Rigging, Tasman Insulation, Inzone Industries, United Rentals and Heartland Bank.
It also included Aspect Roofing, Metal Line Roofing, Hoults Doors, Stylecraft Stairways, Just Life Group, Safesmart Rentals, Fujifilm Business Innovation, PG Drainage, Portacom New Zealand and Heatpump Covers.
Also listed as secured creditors were Fletcher Distribution, Steel & Tube Holdings, Composite Floor Decks, Woodspan, PlaceMakers Auckland Central North Hub, Carters Building Supplies, Electrolux (NZ) and Kone Elevators.
A list of unsecured creditors will be shown in the first report due out on Wednesday.
Build Partners' four sites have now been taken over by Kāinga Ora after it said subcontractors had not been paid.
Steve Mikkelsen, a director of Build Partners and chief executive of its owner Property Partners, said in early April he anticipated Kāinga Ora would pay the subcontractors.
“When you’ve got 100 subcontractors calling you every day... we are not a rogue contractor but a trusted partner with the Government that came unstuck because of the current situation,” Mikkelsen said on April 12.
The business had built nearly 700 new state homes, he added.
“My understanding is Kāinga Ora are going to make payments for all subcontractors and suppliers. It’s been a really, really tough market.
“These projects were priced a long time ago and there’s been a lot of cost escalations. We got to a position where we had completion problems with cashflow on these projects. This is pretty standard,” he said in April.
Projects were priced three or more years ago “and you can imagine in the construction business, the build process is 18 months to two-and-a-half years”.
That created a big gap between the contract price and what it was costing to complete, he said.
“We are doing everything we can. We are supportive of the subcontractors and suppliers.”
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
