KEY POINTS:
The failure of the $450 million Kensington Park at Orewa will drag many other businesses down with it, and other similar developments will likely follow.
Subcontractors on the 750-house development are owed hundreds of thousands of dollars for work already completed at the site, one of them said
yesterday.
And a property expert told the Herald more failures in the $12 billion construction market were likely before the property downturn was over.
Rodney Dickens, managing director of Whangarei consultants Strategic Risk Analysis, questioned the future of high-density housing estates of the same style and price bracket as at Orewa, but he said not all big new estates would suffer.
He doubted whether New Zealanders had embraced the intensive suburban living concept offered at Orewa.
Frank 'Taffy' Roberts of Dragon Scaffolding Contractors said he knew of other subcontractors owed hundreds of thousands of dollars after working there and he predicted they would not survive the crisis.
Staff layoffs, no cashflow and dozens of disenchanted workers are now a hallmark of the project once promoted as "a verdant enclave without rival".
Mr Roberts has worked on the 15ha park for two years but he has now been hired by the BNZ to erect scaffolding which had been taken off one partially-built long row of apartments.
Without scaffolding, the big site was a hazard because upper levels with floor-to-ceiling windows were open to the elements, creating potentially lethal structures.
Kensington Park Properties went into receivership after borrowing from the BNZ, Fidelity Finance and NZ Funds Management.
For months, Kensington had not been paying bills, enraging local contractors who eventually walked off the site in disgust. They now face finding themselves unsecured creditors of a failed business.
Mr Roberts said he was worried about his former workmates, including Craig Mathers of Hibiscus Coast Scaffolding, owed more than $200,000.
Sunrise Earthmovers prepared the former Puriri Park camping ground for the high-density project. But on August 19, Marac Finance appointed receivers at BDO Spicers. They are also in charge of Sunrise Plant Hire and Sunrise Labour Hire.
The website for park developer Kensington Properties has been down for days and phones are ringing unanswered.
The survival of other parts of the award-winning business is now questionable. Kensington completed 20 major developments but has stopped work on its huge Taupo project.
Kiwi ingenuity has gripped residents. One group was so incensed when workers abandoned their new fitness centre that they vowed to finish it off themselves.
The leisure centre building has its northern side closed in, clad in glass and looking out over landscaped grounds. But the other side is open to the elements, doors standing in piles of builders' mix, shingle and mounds of clay.
Even the park's completed facilities are being ridiculed.
"Still, they have a clock tower ... always made me laugh. Big freaking wahoo," said one PropertyTalk online commentator yesterday.
Frustration tempered by friendships:
* Jan and Pete Newbould moved into their new Kensington Park apartment in June, having paid $529,000. They find the lifestyle delightful and count the collapse a mixed blessing with only about 120 residents there rather than an expected 1500 people. They wanted easy access to walk their 2-year-old golden labrador Sam in the neighbouring reserve after the developer marketed a link between the park and bush. Now, they take the long way around to the Alice Eaves Scenic Reserve.
* Judy Beachen has been renting at the park since last month, expecting to see workers busily putting up her new $459,000 place. Instead, she has watched with growing horror the lack of progress and worker evacuations. She moved from Mangawhai and enjoys the company of a highly sociable group of neighbours who have become friends during the crisis.
* Raewyn and Gary Thomas are also renting, having paid a $7000 deposit on their $689,000 lakeside apartment due in December. If site works remain idle, the developer will have breached the contract and the deposit is due to be repaid. Raewyn Thomas wants buyers to group together but faces problems compiling an owners' list. Rumours swirling around the site but no hard information from the developer or financiers annoy residents.
