This apartment site was shut when the Herald visited today and subbies are complaining about not being paid. Video / NZ Herald
The struggling construction company partway through building 91 apartments for the Crown’s Kāinga Ora has gone into voluntary administration.
Build Partners was working on Auckland and Wellington sites when Kāinga Ora announced last month that subcontractors were complaining about late payments so it had taken control of fourbuilding sites.
Companies Office records today showed insolvency practitioner Russell Moore of Grant Thornton NZ as the administrator, appointed by Build Partners’ board of directors. Moore said he was now in the midst of contacting creditors who are owed money by the company.
Grant Thornton said Stephen Keen is also an administrator.
Steve Mikkelsen of Build Partners appeared in a video showcasing businesses that were construction accord beacons.
Ty Adam Jones of Albany and Stephen Max Mikkelsen of Devonport are directors of Build Partners, incorporated in 2010 and owned by Property Partners Group Holdings of East Tāmaki.
Voluntary administration is called when a company wants to restructure to survive. It can prevent creditors from taking action like court proceedings, enforcing securities or seizing properties.
Two associated companies, Evergreen Modular and Richardson Road, are also in voluntary administration and under Moore and Keen’s control.
A Grant Thornton statement today said: “The group was part of the wider construction group known as Property Partners Group. The group has been placed into administration by the directors to provide a stable platform for the administrators and directors to explore ways for the group to re-start trading as a viable business.
“If this is not possible, the administration seeks to achieve a better outcome for creditors than an immediate liquidation. Further updates will be provided to creditors throughout the course of the administration, in accordance with the requirements set out in the Companies Act,” the statement said.
On Tuesday, the Herald’s Property Insider reported that Kāinga Ora was still ascertaining how much money is owed by construction business Build Partners after it failed to pay contractors for work on new state homes.
“The team are still verifying amounts owed,” a spokeswoman for the Crown agency said then.
Subcontractors who contacted the Herald last month complained they were owed hundreds of thousands and worried about who would pay them. One said this week he had been paid directly by Kāinga Ora.
“I am not sure if they have already paid Build Partners for the same scope but at least we are all getting something,” the construction expert said.
Earlier last month, the Crown agency took control of sites where Build Partners were in various stages of completion, from foundations to external-cladding.
Patrick Dougherty, Kāinga Ora construction and innovation general manager, said then that three projects in Auckland and one in Wellington were in the Crown agency’s hands.
Work by Build Partners, creating for new state homes for Kāinga Ora on Cadman Ave, Waterview. Photo / Jason Oxenham
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;
Corner Hendon Ave/Hargest Terrace, Ōwairaka: nine units.
Mikkelsen, a director of Build Partners and chief executive of its owner Property Partners, saidlast month he anticipated Kāinga Ora would pay the subcontractors.
Build Partners' site on the corner of Hendon Ave and Hargest Tce in Auckland. This site is one of four taken over by Kāinga Ora after subcontractors were unpaid.
“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 in April.
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,” Mikkelsen said in early April.
Meanwhile, an independent probe, led by ex-Prime Minister Sir Bill English, is reviewing Kāinga Ora’s financial situation.
Companies Office records show Build Partners is 99 per cent owned by Property Partners, a modular building business hailed as an innovative beacon by the previous government’s construction sector accord for its methods.
Build Partners' state housing project in Johnsonville. Photo / Build Partners
Property Partners Group featured in an accord series on “businesses which provide examples of good practice and innovation to the sector so that lessons can be shared to help raise others’ capability”.
Last year, the Herald reported how construction was advanced on the first six-level $90 million block by Property Partners, with another two planned to be built on neighbouring sites near the intersection of Hendon Ave and Richardson Rd, Ōwairaka.
Modular units were being made in a Wiri factory, then trucked to the site and craned into place, one on top of the other.
Mikkelsen said at the time he had hunted globally for the best modular apartment technology and eventually decided on the Swedish system.
The Build Partners' site on Cadman Ave, Waterview, now taken over by Kāinga Ora. Photo / Jason Oxenham
Grant Thornton’s Moore and Keen are yet to issue an initial report on the administration of the three companies.
They have eight working days to call a creditors’ meeting and issue their initial report into the companies’ activities, liabilities and assets ahead of that meeting.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
