Noosa projects in receivership
14 October 2008
The shockwaves of the global credit crisis have reached Noosa with two multi-million dollar projects on Noosa’s North Shore going into receivership.
Developer Petrac had projects on its books to the tune of $1.5 billion including the Noosa North Shore resort and Beach Road holiday homes.
Ferrier Hodgson partners, Will Colwell and Peter Geroff, have been appointed receivers and managers of four entities within the Petrac group, including the Beach Road holiday homes development, the Noosa North Shore resort, and the Seacliffs, a Byron Bay development site.
Petrac chief executive officer Peter McAvoy said it was difficult times for property developers to acquire finance and he was disappointed at losing control of the Noosa projects.
“It could have been a wonderful project for the tourism industry,” he said.
Homes at Beach Road were selling from $1.27 million, with an end value of about $95 million.
Mr McAvoy said 48 of the 90 homes were complete, with 30 sold, while the $70 million resort was some way off completion.
It is believed Petrac hit trouble when its preferred equity lender, Valad, was caught up in the credit crisis facing the Bank of Scotland and was reviewing its portfolio.
“The credit crisis has caused us to be in the position we’re in today,” Mr McAvoy said.
Mr McAvoy said any staff lay-offs would be a decision for the receivers.
Principal contractor on the site, Hutchinson Builders, has been caught in the middle and managing director Greg Quinn said the company was owed $1.2 million in payments for the $3.9 million EcoCentre.
Mr Quinn said Hutchinson was owed a further $1.2 million of its $15.6 million contract for Stage 2 of the Beach Road site, which was about two weeks off completion.
“We’re working closely with Ferrier Hodgson as to what is outstanding and what needs to be completed,” he said.
“We won’t let our subbies (sub-contractors) down ... it’s not their fault.”
A Ferrier Hodgson statement said receivers Mr Colwell and Mr Geroff were investigating options to continue the projects.
“It is early days – we have just started going through the company’s financial records, so it is going to take us some time to get a better understanding of Petrac and the status of these developments,” Mr Colwell said.
“Our first step will be to investigate options for the ongoing development of these projects.
“We will engage in discussion with the various parties as soon as possible. In relation to the Noosa North Shore resort, it will be business as usual.”
Petrac’s financial difficulties will also delay completion of the $4 million Cooloola Great Sandy EcoCentre. The EcoCentre, a condition of the development approval, will house Queensland Parks and Wildlife, an interpretive area for Noosa Parks Association (NPA), Noosa and District Landcare satellite facility and guest reception for the Noosa North Shore resort.
“It’s likely to slow the project down, in that future ownership of the development could be up in the air,” NPA project officer Michael Gloster said.
Mr Gloster said construction of an EcoCentre was required as part of the development application approval for the Noosa North Shore resort, a nature-based tourism mecca for visitors to the north shore.
The EcoCentre was due for completion in November, but Mr Gloster said it would now be put on hold until certainty was restored.
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