A clash between the boss of finance company Crown AGP and high-profile property developer Tony Gapes appears to have triggered the calling in of receivers to one of his companies behind New Zealand's biggest new affordable housing estate project.
Chris Arbuckle, chief executive of Takapuna-based Crown, is making no apologies for the move and is demanding Gapes repay money he owes the company on the Mt Wellington project.
Arbuckle indicated his firm's decision to call in the receivers to Gapes' Panama Road Developments was taken as a defensive, prudent stance.
Crown, founded by John Copson who is on the NBR Richlist with a $300 million fortune, was funding Springpark's first stage, converting a 10.5ha former Zealandia Horticulture nursery into an intensive housing estate.
Via a high-profile marketing campaign spearheaded by Charles Cooper of Colliers International, Gapes pre-sold all of stage one of the development in the house-starved Auckland market, and earthworks are underway.
Colliers is advertising Springpark as innovative: "Springpark looks set to become a blueprint for the future of attractive, affordable, modern living in central Auckland."
Arbuckle indicated yesterday that cash concerns resulted in receivers Kevin Gillespie of Meranti and Stephen Tietjens of Accru Smith Chilcott being appointed.
"We're in the business of finance and we have been in it for many, many years," Arbuckle said.
"If you put money in, you have a responsibility to ensure that the project goes well. There's got to be a reporting regime in place and I make no apologies for the fact that we took action. If Mr Gapes is able and willing to pay us back, that will be a very good result for him.
"We've got to protect our interests. Receivership will now follow the normal course," Arbuckle said.
He refused to discuss the loan but Gapes said he only owed Crown $2 million and the receivers were unnecessary.
"Crown knows that we were not going to repay them until the titles for the new lots had issued which we are expecting to happen today [Friday] so putting the company in receivership was an overly dramatic reaction. Ironically it was them who have held up the titles." Gapes said.
"We began this project with a joint-venture partner, Crown Finance, who are a finance company. For various reasons we decided not to proceed with Crown but mainly because they tried to change the terms of the [joint venture] on us which was hugely detrimental to us ... Crown are owed around $2 million and I imagine they have put [the company] into receivership, which they are entitled to do as a secured creditor, to put us under pressure to get them repaid as soon as possible," he said.
"We are not currently doing any marketing as all of stage one is basically sold out. We will begin marketing the second stage towards the middle of the year."
One party close to parties claimed Arbuckle and Gapes clashed."It's definitely got the makings of a squabble," the insider said.
Arbuckle said: "If we're putting money into a project we need to know what's going on. The initial stage of a project is the riskiest."
Earlier this year, a property owned by one of Gapes' companies was put up for mortgagee sale. ASAP Finance advertised a 1615sqm prime plot on Wellington's Waterloo Quay to claw back some of the $6.99 million it loaned to his Waterloo Quay Projects.
Springpark
Planned Mt Wellington affordable housing estate.
Not an Auckland Housing Accord Special Housing Area.
Pre-sales $399,000 to $554,000.
Tony Gapes plans to build 424 apartments or townhouses.
Buying Zealandia Horticulture site at 33 Panama Rd, 98-100 Hillside Rd, Mt Wellington Highway, 11 Ryburn St.
10% pre-purchase deposits taken on most of first stage.
