https://www.theleader.com.au/story/5837281/builders-quit-unfinished-cronulla-project/?cs=1507Builders quit unfinished Cronulla project
January 6 2019
A half-built apartment project is up for sale in Cronulla, after developer Lainson Holdings' non-bank financier called time on its unpaid loans.
Builders walked off the 25-29 Tonkin Street property after the local developer's unidentified private lender called in administrators on the 28-unit project, six months before the scheduled settlement with buyers.
HLB Mann Judd's Todd Gammel and Barry Taylor were appointed last month to manage "Dingle", a luxury boutique development on the shores of Gunnamatta Bay.
Non-bank lenders are moving into construction lending as the major banks, which have traditionally accounted for 85 per cent of Australia's $270 billion market, reduce their share to an estimated 70 per cent over the next decade. It's giving developers alternative sources of funding that many are embracing.
But the Lainson story shows the risks for the clients of non-bank lenders, who can be more aggressive in taking steps to recover loans - even cutting a project loose before practical completion.
There is growing distress among apartment developers amid slowing sales in a slumped and credit-starved housing market.
Investor mortgage borrowing grew just 1.1 per cent in November, its lowest annual rate on record, Reserve Bank of Australia figures this week showed.
Falling property prices gathered momentum in December to end 2018 down 4.8 per cent across the country, the weakest conditions in a decade.
Other recent local private lender-led receiverships include the 100-unit Royal Plaza property in Woodville Street in Hurstville and the 176-apartment towers at 30-32 Guess Avenue, Wolli Creek.
But unlike Lainson's tower, the Royal Plaza was mostly completed while Wolli Creek had not even commenced when lenders swooped in.
While unfinished properties are not common in Australia, they are often a symptom of a housing crisis and a reminder of how things can turn against over-ambitious developers.
In China, there are more than 60 million empty apartments sitting in eerie ghost towns, a result of a debt-fuelled housing bubble that led to many projects being left unsold or uninhabited.
In the case of Lainson, the group was understood to have disagreements with its current builders. It was not the first time it ran into problems with builders since the project was launched for sale about four years ago.
Lainson also runs Cronulla-Crete and Calypso Holiday Apartments in Coffs Harbour.
Between 2016 and 2017, the developer headed to court over unpaid bills of about $1 million with another builder, Duffy Kennedy.
This leaves the project in limbo as the sunset date - the last date either the developer or buyers can rescind contracts - looms.
The administrator has put the half-built project on the market for sale. Colliers International's Matthew Meynell and Miron Solomons are handling the expressions of interest sale.
It is understood only about half of the 28-apartment project has sold through local selling agent Highland Property Agents.
The company did not respond to calls, and has since removed project advertisements from its website.
The development includes one to three-bedroom apartments as well as penthouses. It will also have two retail units and underground parking.
Liberal Party power-broker associated with company representing applicant in spot rezoning bid at Sutherland
March 18 2019
The simmering development issue in Sutherland Shire could boil over just days out from the state election with revised plans for a highly controversial site due to be considered by the council tonight (Monday),
The site at 10-14 Merton Street, Sutherland - between St Patrick's Primary School and Sutherland Public School - was used by the Labor Party this month to illustrate a promise to end spot rezoning.
Council planning staff have recommended the council not support the latest of many revisions to the plans, which still provide a maximum building height and floor space ratio (FSR) well above the limits set down in the local environmental plan (LEP).
The staff report also advised "Councillors should be aware the applicant is now represented by Pacific Planning Pty Ltd, a company with which former Sutherland Shire Councillor Matthew Daniel is associated".
Mr Daniel, who formerly worked for the Department of Planning, is a long-time Liberal power broker and fundraiser for the party in the shire and supported Cr Kent Johns in his failed bids to win Liberal Party preselection for the federal seats of Werriwa and Hughes.
Mr Daniel was named in allegations in 2013 that developers and businesses with Liberal Party connections were receiving special treatment by the then Liberal dominated council.
Mr Daniel's contract with Liverpool Council, where he was the deputy general manager, was terminated in 2013 after it was found he had failed to declare he was an undischarged bankrupt.
The allegations involving Sutherland Shire Council were referred to the Independent Commission Against Corruption (ICAC) by mayor Kent Johns, who chose not to seek re-election for the position in 2013.
In 2015, Cr Johns returned to the role after the ICAC found "there was no indication that any of the council officials had engaged in corrupt conduct or acted with corrupt motive".
A proposal for a spot rezoning of 10-14 Merton Street first came to the council in March, 2016.
The proposal was for a FSR of 3:1 and a maximum height of 36 metres (12 storeys), compared to the LEP controls of 1.5:1 FSR and 20 metres (6-7 storeys).
The initial plans were rejected by the council and planning panels, and several modifications have been made since.
The latest proposal is for an increased FSR of 2.2:1 and a maximum height of 25 metres (eight storeys) and 20 metres in a staged development.
The council staff report said an independent analysis by an architectural firm, commissioned by the Department of Planning and Environment in May 2018, found the most appropriate built form controls for the subject site was a maximum height of 22 metres and FSR of 1.8:1.
"This finding is generally consistent with the conclusions of council officers following their earlier assessment of the proposal," the report said.
The council's planning committee recommended to the full council meeting on Monday the revised plans not be supported.
Four Labor councillors voted to recommend refusal and there were no votes against.
The three Liberal members of the committee who were present when the agenda item came up declared a non-pecuniary conflict of interest because of Mr Daniel's Liberal Party membership and took no part in the debate and did not vote.
the council can express an opinion, the final decision will be made by Sydney South Planning Panel.