Announced in 2015 with a great fanfare from the Tory Government and the Labour Council the China Town Development lies derelict and abandoned on a major site at the edge of Liverpool City Centre.
The original company dealing with it has gone into administration. There are now serious questions being raised about the company that acquired the assets. The original investors have received no return on their money and are fighting to try and get some recompense. They are likely to be joined by investors in the second company.
In this tangled web there is a continued problem with company governance with continued failures to produce accounts on time and two of the key companies now appear to have no legally appointed Directors to run them.
I reproduce here the article in yesterday’s Liverpool Echo by Tom Duffy who has been keeping a close eye on the Liverpool property scene. I have been working with him on these property issues for the 3 to 4 years but moving forward is full of legal minefields and both I and the Echo have had to be very careful in what we have said and when we have said it. It is interesting to note the response to what I have said from a representative for the developers, “There is nothing that we can disagree with in what Councillor Kemp says”.
I will be moving a motion to the December Council meeting looking at a way forward for both this and the Eldon Gove site. More details later in the week. In the meantime, my thanks to Tom Duffy for his continued work in exposing the major fault lines in Liverpool development.
There is a growing concern about the future of the New Chinatown site in Liverpool (Image: Colin Lane/Liverpool Echo)
GGSD unveiled their own plans to deliver hundreds of new homes and shops on the land near the Anglican Cathedral. In February last year executives from GGSD met with the ECHO and said they were fully committed to delivering the scheme.
The ECHO can now reveal that:
A receiver for Cambridge and Counties Bank has been appointed to the Great George Street Project Limited
GGSD has not begun any physical works on site
The company has debts of £14m
Liverpool Council is still owed around £950k plus interest
Buyers are still owed around £6m
GGSD and parent company The Great George Street Project Ltd are late in filing their accounts
Sister companies Great George Street Project Phase One Ltd, Great George Street Project Phase Two Ltd and Great George Street Project Phase Three Ltd are late in filing accounts and have no directors
Liverpool company Crossfield Construction was appointed by GGSD to carry out minor work on the site to help ‘discharge planning conditions.’
Now Richard Kemp, leader of Liverpool’s Liberal Democrats, has expressed concern about GGSD and the future of the site.
He said to the ECHO: “Two years ago I warned about possible difficulties of investing in a new company. “It was issuing two-year loan notes (a type of bond) at a rate of interest which was 10 times that which banks were paying at the time.
“I am not surprised that it is now late in supplying its accounts for Companies House and that associated companies have no directors.
“At a wider level I repeat my call for investments of this type to be regulated by an organisation like the Financial Conduct Authority. Too many people have lost money in the UK, and Liverpool has been at the heart of those losses, for the Government not to act.”
A spokesperson for the New Chinatown Buyers company which represents investors in the original scheme said: “The legally established members company New China Town Buyers Ltd have tried, since the long stop date was invoked, to regain our full deposits with interest but without success.
“There have been attempts to make a very low offer to the buyer’s company by the developer but nothing has happened so far. The buyers who legitimately paid deposits in 2016 for a dream development set up by the Government, Liverpool City Council and the developer have been failed from the day they paid the deposits in.
“The debate about whether or not the site is built is not of interest to the buyers because we just want our money back. When deposits were paid it was to see a building by 2018 at the latest, which was the long stop date, what we have had is excuses and failure.
“We hope that clarifies our position and that the £6m owed to the buyers is repaid sooner rather than later. This has been a nightmare for the buyers and the end of a dream of investing in Liverpool which they never believed would turn so bad. “
A spokesperson for GGSD said: “The appointment of a receiver relates to the third phase of the scheme.
“There is nothing that we can disagree with in what Councillor Kemp says but we are working as diligently as we can to bring things into line and negotiate a suitable exit for all creditors subject to an agreed refinancing of the project.
“The investment that was introduced previously to the project was via investor platforms and the structure that we are looking at now is investment of our own funds in order that we relieve the financial pressures on the project rather than add to them.”
The spokesperson confirmed an offer had been made to the buyers company last year.
A spokesperson for the Crossfield Group said: “Our construction team have done some recent work on the scheme in discharging the pre-commencement conditions for Mr Moretti, but that is our only involvement in the project to date. We weren’t involved with any previous owners of the site.”
The original New Chinatown scheme received national media coverage when the plans were unveiled in 2015. The scheme, backed by local and national politicians, was included in the government’s ‘Northern Powerhouse Investment Pitchbook’.
Leading figures from Liverpool Council spoke in favour of the scheme and helped promote it during a government led trade trip to China in 2015.
In 2016, building work stalled on the New Chinatown site after the developers became involved in a number of protracted disputes, and the scheme stalled.
In December 2019 Liverpool Council approved plans submitted by GGSD to develop the site.
In October the Serious Fraud Office announced they had discontinued their investigation into the Chinatown Development Company due to “insufficient evidence.”