Final St Clair property sold amid mounting debts

The seven-unit Esplanade Motels and Apartments complex at St Clair Beach has been sold by...
The seven-unit Esplanade Motels and Apartments complex at St Clair Beach has been sold by receivers, for what is believed to be more than $1.3 million. Photo by Linda Robertson.
Mounting debts beyond $4.8 million have been revealed in the receivers' first reports into the three failed development companies of St Clair builder and developer Stephen Chittock.

This week saw the final property sale in a tranche of five of Mr Chittock's beachside properties within the Esplanade block - a deal worth more than $1.3 million to buy the seven-unit Esplanade Motels and Apartments complex.

The five property sales amount to more than $3.7 million and the proceeds will be distributed to secured creditors. A sixth residence, near the corner of Beach and Bedford Sts, which Mr Chittock had interests in, has been sold for more than $300,000, taking the total to $4 million realised from the Esplanade properties.

While receiver Insolvency Management of Dunedin still has further work assessing liabilities and assets, it warns in its report on White Island Investments that it is "unlikely" funds will be available to pay unsecured creditors, who are owed almost $118,000.

All three companies - White Island Properties, White Island Investments and St Clair Village Hotels - had "cross guarantees" covering a single $1.6 million debt to South Canterbury Finance, whose own receivers forced Mr Chittock's companies into receivership.

Aside from the $1.6 million South Canterbury debt, White Island Investments carries another almost $300,000 of debt, including $154,000 to IRD and $25,000 in employee entitlements.

White Island Properties owes the former Southland Building Society $320,000 and St Clair Village Hotels owes a further $2.25 million to (rebranded) SBS Bank. Another $400,000 is owed to the former owner of a beachside property Mr Chittock purchased and redeveloped.

Those debts amount to about $4.87 million, but receiver Iain Nellies said there were "other securities being held", outside the three companies of Mr Chittock's in receivership, and those are expected to "assist in reducing the debt" to SBS Bank, which has a total exposure of $2.57 million.

The seven-unit Esplanade Motels and Apartments complex was the last of five properties to be sold by Colliers International.

It is understood, but not confirmed, to have fetched more than $1.3 million from an Otago-based buyer.

The five adjacent properties, which collectively had a value of $4.4 million and cover a total 2739sq m footprint, have fetched more than $3.7 million.

The Swell Cafe and Bar was sold in October for more than $1 million; a residential home in Bedford St had sold earlier for about $400,000, and homes in Bedford St and on the Esplanade sold separately, totalling almost $1 million for the pair.

Colliers sales broker Bill Brown confirmed the motel's sale yesterday, but could give no further details of the buyer, other than his intention of continuing to operate the motels at present.

He said three Otago-based buyers had all tendered "with competing prices" for the Esplanade Motels and Apartments complex.

As with the separate purchase of neighbouring Swell restaurant, which was bought by a Thai restaurant chain operator, there are no immediate plans to redevelop the Esplanade Motels and Apartments complex, Mr Brown said.

"They [three tenderers] were all enthusiastic about the development of the motels into apartments, at some stage," Mr Brown said.

The six titles covering the five properties now had five new owners, which could be good for future development plans in the area, Mr Brown said.

Mr Chittock's development companies White Island Investments, White Island Properties and St Clair Village Hotels, were placed in the hands of the receivers of collapsed South Canterbury Finance in August, when they exercised a right to force the companies into receivership over a $1.5 million debt.

The three companies had days before been placed in voluntary administration by Mr Chittock, but the receivers' option overrode his plans in seeking to refinance redevelopment plans.

Before receivership proceedings, the voluntary administration process had estimated Mr Chittock's liabilities stood at $5 million, against assets of $5 million.

During the past 15 years, companies of Mr Chittock purchased or held interests in up to nine of 16 properties, five commercial and 11 residential, and he had successfully driven a zoning change within the Esplanade block to allow for some small-scale business activities.

simon.hartley@odt.co.nz

 

 

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