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Massive Kawarau Falls development put into receivership (Update 1)
Kawarau Falls, the hotel and luxury home development near Queenstown, has been put into receivership, receivers Korda Mentha have confirmed. (Updated to include Nigel McKenna's comments) The development by Nigel McKenna's Melview Developments was worth hundreds of millions of dollars and had been backed by Bank of Scotland and Hanover Finance, which is itself in moratorium. The Sunday Star Times reported talk that the New Zealand Superannuation Fund may underwrite the project, surprising and disappointing many in the investment community. Korda Mentha receiver Brendon Gibson told a teleconference that construction on stage 1 of the project would continue for the next two weeks while the situation was asssessed. Bank of Scotland Internation had called in the receivers after development defaulted on payments for the first mortgage, he said. "Bank of Scotland exercised their right to appoint receivers," Gibson said.
Stage 1 of the development was half completed and was due to have a value in excess of NZ$250 million on completion in November of this year, he said. The hotel and apartment development was designed to 178 rooms and apartments and the hotel part was to be managed by Westin. There were 400/500 workers currently on the construction site, which had 5 main blocks. Gibson confirmed that Hanover Finance had the second mortgage on the project. Later, Nigel McKenna issued a statement saying only two companies linked to the Kawarau Falls development had been put into receivership. "No other companies in the Melview Group were involved and in particular Melview's Hotels division, which manages The Westin and The Quadrant in Auckland and the Holiday Inn in Wellington were unaffected," McKenna said. McKenna described Kawarau Falls Station as "an infrastructure project of national importance to our tourism industry which will create the first convention facility for Queenstown capable of seating 1000 people under one roof."
"green shoots of recovery" ........!!
"green shoots of recovery" ........!!
Don't be too hard on
Don't be too hard on Mr. Tuffey.
This is huge news but
This is huge news but its no-where to be found on the mainstream stuff and nzherald sites. Its super exclusive to this site! Good work interest.co.nz!
Time for Nigel to depart
Time for Nigel to depart NZ?
If I was a Hannover
If I was a Hannover investor who voted for that moratorium I would be feeling a tad queezy..........
This'll make Dave Henderson's day...
This'll make Dave Henderson's day...
bad luck
bad luck
oooooh bugger! Investors with frozen
oooooh bugger!
Investors with frozen funds will be feeling a tad nervous as the credit crunch finally hits and the developers lose access to funding lines.
So were does that leave the NZ Super Fund -or was that a smokescreen/last resort?
I am afraid Hanover investors
I am afraid Hanover investors allowed themselves to be taken as fools not once, but twice. That is despite the best efforts of various commentators to enlighten them to the risks of not forcing a Hanover receivership. The only folk I feel sorry for now are those who voted against the moratorium but were over-ruled by the gullible masses. It is irrational to think that a management who had failed once in relatively good times would then suceed in bad times.
Massive "Big Boys Bust Bubble"
Massive "Big Boys Bust Bubble" - how far away ?: http://www.guardian.co.uk/books/2009/may/25/hay-festival-niall-ferguson
Interesting reading.
I wonder what is happening
I wonder what is happening with that massive $200m hole in the ground in Ponsonby?
Watson and Hotchin will feel
Watson and Hotchin will feel the roth if investors don't get back all their investment, as was promised. Hotchin did say he would look at selling his own houses, to make it up, so I wonder if he will put his money where is mouth is if it does all turn pear shaped. Owning dodgy finance comapnies must run in the family, as Hotchins brother own Nathans Finance, which is in trouble with the regulators.
My parents voted against the moratorium, but many NZers are like lemmings, and get sucked in my all the marketing spin.
I am just wondering if
I am just wondering if anyone has any predictions of where NZ will be in say 1 year, 3 years, 5 years, and 10 years. Currently things appear to be unravelling at a fast rate. I haven't really seen too many articles on how these financial experts expect things to pan out.
I note on TVNZ news
I note on TVNZ news tonight developer McKenna stating something like "this is a tourism project of national signifigance" - maybe that will be the reason that we may see Key/ the government come out in support of the Super fund bailing out this massive project. More to this than meets the eye I suspect!
The 6.4ha site at Kawarau Falls Station, the only north-facing high-density residential site in Queenstown, was intended to have 1100 units and 13 buildings, boulevard-style streets, restaurants and parks, when completed in 2011.
Rob, I think still south-
Rob, I think still south- east of Australia, a little bit smaller, with lots of yellow, artificial and natural icebergs boating and floating around. :-)
<i>The Bank Manager Says: May
The Bank Manager Says:
May 26th, 2009 at 10:47 pm
I note on TVNZ news tonight developer McKenna stating something like "this is a tourism project of national signifigance" - maybe that will be the reason that we may see Key/ the government come out in support of the Super fund bailing out this massive project. More to this than meets the eye I suspect!
The 6.4ha site at Kawarau Falls Station, the only north-facing high-density residential site in Queenstown, was intended to have 1100 units and 13 buildings, boulevard-style streets, restaurants and parks, when completed in 2011.
Perhaps that is why F&P will never be allowed to fail, even though it is a private company.
@The Bank Manager The statement
@The Bank Manager
The statement is even worse than what you have written - McKenna uses all the latest buzzwords to pitch it at Government to bail his him and his project out.
"an infrastructure project of national importance to our tourism industry which will create the first convention facility for Queenstown capable of seating 1000 people under one roof."
Oh dear.
A direct plug to the NZ Superfund and Key.
Don't touch it with a barge pole please. It will be a neverending money pit.
If they bail this out - they would be pressured to bail out all the others that fail, or have failed.
Well, the Hanover shareholders should
Well, the Hanover shareholders should have taken what they could have, while they could. It would be pointless to blame Hotchin and Watson for profiteering at this point - they are the best marketing tools around for luring expats and rich migrants to New Zealand. Where else can you fleece investors and still be invited to supper?
The Superannuation fund is losing millions just sitting around doing nothing anyway: I say pour it into Kawarau and see the project completed. The construction jobs will be saved and since we don't manufacture very much anymore, at least there will be future jobs for chambermaids, waiters and janitors.
Rob: If you want to see New Zealand's future, study Argentina.
Argentina - this book might
Argentina - this book might help with such a study:
Culture and Prosperity: the truth about markets "“ why some nations are rich but most remain poor. John Kay, 2003, Harper Business.
John Kay uses New Zealand and Argentina as examples of countries once rich that are now becoming poor - note the date of publication.
I have completed a review of this book and it's on the NZMEA website and can be downloaded from the top part of this page:
http://www.mea.org.nz/events.aspx
"...the only north-facing high-density residential
"...the only north-facing high-density residential site in Queenstown". I wonder why! It nearly sends you blind looking across the lake towards the sun with the light reflecting off the water! A chance for a profitable Sunglasses Hut franchise in there somewhere....
Doug wants it finished and
Doug wants it finished and Doug is willing to invest all his savings to see it done.
Right Doug?. Doug, hey where's Doug gone?. Geeez look at that sucker run.
Speaking of which, Wally. Quiz:
Speaking of which, Wally. Quiz:
Q: "How many types of people do business in Queenstown?
A: 2. Suckers and suckers. One's a noun, the others a verb.
True, but the noun dates
True, but the noun dates from the 14th century and the verb came 200 years later!
The Government may have been
The Government may have been working behind the scenes on this one for a few weeks and do not be surprised if they fall for the "national importance" etc etc.
The government will be seen as heroes if they bail it out - saves jobs, creates jobs, helps out the tourism/construction industry and gives Hanover investors hope!
They may take the view that it is best to prop up this project and put the national cycle track on hold for a few years.
The government won't bail out
The government won't bail out the entire project.
Janet - how much did you lose in Queenstown. Or could you never afford to invest/purchase. Clearly one or the other, or you simply don't have a clue.
No super funding - this
No super funding - this is a high risk commercial project! That's why it is in trouble.
Doug's still running.
Doug's still running.