Website of the YearProperty developer David Henderson has defended his purchase of a stalled inner-city apartment development, saying his company has agreed to take on the project's creditors and debts of around $1 million.
Mr Henderson's Kitchener Group has secured a conditional agreement to buy Number One Hobson, the site for a planned 19-level tower of 188 apartments.
The project was to be built by Equinox Construction, renamed GFF, which is in financial trouble, owing its shareholders and general creditors $2.4 million.
Mr Henderson's contract covers approvals for the tower and sale agreements covering around 120 apartments. He says that, "if you believe the list," the development had about 50 creditors.
They are owed about $1 million for foundation work, structural steel work, and the building of a crane base.
Kitchener Group has been marketing the tower since 1998, and Mr Henderson says he is deeply disappointed that building has not already started, as more than 60 per cent of the apartments have been sold.
He blames GFF for trying to tackle the development as a builder.
"In its development management and advisory role, Kitchener has always urged the use of a local construction contractor to undertake the development," he says.
But GFF spokesman David Drew yesterday defended the builder, which he said had "project expertise and experience in high-rises because they had done that in Taiwan."
Mr Henderson said Kitchener had contracted to buy the site from the owners, Oblique Developments, not directly from GFF.
Some of GFF's general creditors are upset that the one substantial asset associated with the company has been sold.
The company is pleading with creditors not to take court action and is offering them between 24c and 33c for every dollar they are owed.
Mr Henderson yesterday defended his decision to buy the tower, saying he did not think there was a direct relationship between Oblique and GFF, except that he understood one of the shareholders in Oblique was a GFF shareholder.
But GFF's compromise offer to its creditors states:
"Chong Du Cheng and Robert Chao-Chun Yu are directors of Oblique Developments Ltd. Rex Chien-Hsiang Huang and Robert Chao-Chun Yu have a beneficial shareholding in Oblique Developments."
In the GFF creditor documents they are named as "related parties."
Kitchener is now seeking tenders from New Zealand-based construction companies to build the tower, which is scheduled to be finished by late next year.
Mr Henderson said the tower, when finished, would be worth about $50 million.
The company needed to raise about $30 million from trading banks and an offer to the public to fund the project.
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