This Kāinga Ora project at Northcote by Scarbro was nearly finished.
Insolvent Scarbro Construction had won $39 million in Government contracts to build 89 apartments at two Auckland sites but all work on that Crown land has been frozen after liquidators were appointed.
That leaves the Government jobs in limbo until new contractors can take over the work.
Scarbro built dozens of Auckland state units for Kāinga Ora Homes and Communities.
Company director Garry Scarborough appointed McGrathNicol liquidators today.
Liquidator Andrew Grenfell confirmed Scarbro was part-way through building the two North Shore state housing projects, although he is yet to assess them fully.
The biggest was on Cadness Rd, Northcote, where Scarbro won a $28m contract for the 55-unit N30. Work had started a year ago and is only months away from finishing, but Kāinga Ora must now find new contractors.
The project will have four buildings with a total combined area of 6700sq m comprising a mix of apartment sizes and styles over 55 apartment units and associated community rooms and facilities, the business said in 2021.
It is part of the large Kāinga Ora Northcote redevelopment programme and was expected to take 20 months to build.
Scarbro also had an $11m contract to build a 34 one- and two-bedroom units in a five-level concrete block on Kaipatiki Rd, Glenfield, for the state agency. It estimated that would take it 16 months.
That project is less advanced but the site is also idle until new contractors are appointed.
Scarbro said it had previously built state housing on Cracroft St, Onehunga, and Penrose Rd.
Patrick Dougherty, Kāinga Ora construction and innovation manager, said the liquidation was a “sad outcome”.
“We are in the very early stage of assessing the status of each project and will work with the liquidators on the way forward.”
Grenfelland fellow liquidator Colin McElhinney will now assess the company’s assets and liabilities to ascertain who, if anyone, can be paid.
“The deferral of new upcoming projects together with the ongoing impacts of Covid associated disruptions, construction price increases, labour shortages and finally the adverse weather events over recent months, have together contributed to the Companies’ inability to continue to trade,” McGrathNicol said.
Scarbro Construction, Scarbro Build and Scarbro Construction Holdings are all in liquidation.
That caused shock and surprise in the sector: “They were a good outfit, been around a while,” said Culum Manson, head of New Zealand’s largest privately owned commercial builder Mansons TCLM.
Kim Barrett, who owns major builder Haydn & Rollett said: “I’m a bit surprised by this”.
Others said senior management struggles had beset the business, even though some large contracts were nearing completion. It was extremely disappointing to see a builder of Scarboro’s size and longevity fail, they said.
Scarbro’s website says the company employed 60 people and worked on some of the city’s larger projects.
The business, based in Ellerslie’s Dryden Pl, was founded in 1996 and was one of the city’s top builders, categorised as a tier-two construction company.
“Garry has made the tough decision himself. It’s been very emotional for him,” Grenfell said.
As well as the state projects, Grenfell said the business had been working on 15 luxury new Balinese-style villas in Matakana, retail construction in Mt Wellington and apartments on Great North Rd, Grey Lynn.
In 2018, an expert told the Herald Scarbro was one of the leading tier-two builders in NZ along with Dominion Constructors, Leighs Construction, Naylor Love, Watts & Hughes, Haydn & Rollett and others.
Brothers Garry and Paul Scarborough established the business with fellow construction expert Peter de Nys. They were joined shortly after by Peter Davis.
The first liquidators’ report might be out next week. Garry Scarborough declined to comment, saying any questions should be sent to the liquidators, who are now in control.
The failure is the latest in a string the Herald has reported on lately. Six factors have been blamed: inflation, a shortage of materials, the extremely high volume of construction, the shortage of labour, the challenges of gaining access to finance and the ongoing effects of the pandemic.