Buyers left wondering as 420-home project goes into receivership

Springpark, Auckland's first proposed mass affordable housing project.

Auckland developer Tony Gapes has expressed sympathy for 140 home buyers who are victims of financial problems at his Springpark housing project.

"I just feel sorry for all the purchasers and them not ending up with houses," he said yesterday. "The receivers were called in by our funder, a Singaporean private equity business, Olympus Capital."

Receiver Dave Ruscoe yesterday confirmed that he and Richard Simpson had been appointed receivers and managers of Panama Road Developments, the vehicle behind the 10.5ha Springpark project, near Sylvia Park in Mt Wellington.

Gapes planned 420 terraced homes, with three- to four-storey apartments, but the project has been dogged by delays for two years.

The scheme was marketed under the tagline "why rent when you can own your own home?" and was particularly attractive to first-home buyers.

Purchasers were yesterday expressing bitterness about the outcome, saying they had waited far too long.

Gapes said the troubles were nothing to do with building affordable housing, regulations, or authorities in charge of consenting. Instead, he said the development had struck many problems from day one.

"We were due to refinance them in October," he said of Olympus, "and with the delays and cost blowouts, the project became unviable."

He refused to reveal how much had been borrowed or how much was due in October.

Deposits of $6.5 million were taken on 140 residences in the first stage, which aimed to build 173 homes, he said. The project, initially marketed by Colliers International, was to be terrace style homes, aimed at the more affordable end of the market.

"We got most of the civil work done - roads, services and 16 houses half-built. But they've been on hold for the last two or three months while we've had consenting issues," Gapes said.

We're really disappointed and really sorry about the buyers. They all hung in there for the last couple of years and it's a real shame we can't get a result.

"This site in particular had a lot of unique issues. We've spent an enormous amount of money remediating contamination issues that were not identified," he said, blaming initial engineering, geotechnical and contamination reports on the land.

"It was essentially just a big rubbish dump and none of that was identified, so a lot of that we found once we dug the roads. I don't blame Auckland Council. This is a combination of consultants who didn't perform and changes of fire regulations for terraced housing. It wasn't just one thing, it was a combination of a whole lot of things."

Yesterday, Auckland man Mark Seales said he was among those affected by the receivership.

He and a friend bought a four-bedroom property at Springpark off the plans in June 2013, paying a deposit of $53,000. They had since spent another $5000 on chattels such as a granite bench top, and $1500 on valuations.

"I'm not very happy. I want to know that [my investment] is secure," said Seales.

This is not the first time Springpark has hit trouble. In May last year, Panama Road Developments was put into receivership by Crown Finance, said to be owed $2 million. At the time, Gapes said the receivership did not put the project in doubt.