5 Dec 2015

Paperwork blamed for project's demise

8:55 am on 5 December 2015

Hold-ups with official paperwork largely contributed to the demise of a major affordable housing project, a property developer says.

Part of a housing development in the Tamaki area in Auckland.

A major Auckland affordable housing development has gone into receivership. Photo: RNZ / Kim Baker Wilson

The developer behind one of Auckland's biggest affordable housing projects has gone into receivership.

Developer Tony Gapes was building 450 apartments and terrace homes at Springpark in Mt Wellington, which were selling from $320,000.

Receiver Dave Ruscoe from accounting firm Grant Thornton said he was appointed to manage Panama Road Developments Trust on Thursday afternoon.

That was after Hong Kong investor, Koi Investment Partners, called in its debt and the developer was unable to repay it.

Another property developer, Fuzo Property Group director David Whitburn, said hold-ups with paperwork had caused big problems for the development - and led it closer to financial collapse.

Auckland Council was too slow to process resource consents, which left the developer with huge holding costs, he said.

"It just took too long to get resource consent for the developer."

The timeframes, delays and uncertainty significantly contributed to the company's financial position, Mr Whitburn said.

"I think that we, as a community, need to put a bit of pressure on Auckland Council to just lift the socks up and try and support these affordable developments."

Springpark's demise was a shame because the project aimed to provide much needed affordable housing, he said.

Mr Gapes first revealed plans in 2013 for the project which has since been affected by a series of delays.

The developer went into receivership in July last year, after it was unable to repay another lender to the project.

The company survived that after another lender was brought in. It is not known whether that was Koi Investments, which sparked this latest receivership.

All 150 people who had paid deposits for homes that are yet to be built had been notified, Mr Ruscoe said.

Their deposits were being held in a secure trust which the developer could not access. But it was unclear if the creditor, Koi Investments, could access that money.

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