$20 million-plus St Clair proposal revealed

A more than $20 million proposal for a development at St Clair in Dunedin - potentially involving Chinese investors - has been revealed in the wake of a Dunedin developer's businesses being placed under voluntary administration 11 days ago.

The proposal is the latest in a string of multimillion-dollar plans in recent years which, aside from construction of the boutique St Clair Beach Resort hotel, have failed to gain traction.

Earlier this week, about 20 of Stephen Chittock's creditors attended a meeting in Dunedin and met Christchurch-based administrator Bruce Ullrich, who believes the administration of Mr Chittock's financial position was "salvageable, if the right equity partner can be found".

Architectural drawings are being done for the St Clair project, which could include an additional 40-80 rooms at the St Clair Beach Resort. New apartments on the site of the older seven-unit beachfront Esplanade Motels and Apartments, ground-level boutique commercial premises, spa facilities and underground car parking in the area are also being considered.

Mr Ullrich said a proposal for a would-be buyer to lease the St Clair Salt Water Pool from the council was also under consideration. The pool would be covered for year-round use, but still be open to the public.

"Ideally", if equity partners could be found, a deal to proceed with the St Clair project could be clinched within six months, Mr Ullrich said.

The project was "still in its early days" and only "preliminary talks" had been undertaken, he said.

Otago construction and property company Calder Stewart was "prepared to consider the project".

The other option was get Chinese offshore investors involved, but Mr Ullrich declined to give any further details.

Mr Chittock had been in a 50-50 joint venture with Calder Stewart Property to develop the award-winning St Clair Beach Resort.

However, at the end of March, the two parties announced they had parted company over the development, with Calder Stewart having bought out Mr Chittock's stake for an undisclosed sum. The resort land purchase, construction and fitting-out has been estimated as having cost up to $14 million.

When asked about the potential cost of the new St Clair project, Mr Ullrich said it was likely "a minimum of $20 million would be needed".

The project outlined by Mr Ullrich includes several options touted by Mr Chittock during the past two years, but draws together for the first time the options of extending the new hotel and having the salt water pool as part of the facilities.

"This could work, not by borrowing more money, but by getting equity partners on board," Mr Ullrich said.

From early June to early July, Mr Chittock had on sale his remaining assets within the boundary of the Esplanade block, the Esplanade Motels and Apartments complex, Swell Restaurant and three private residences, collectively valued at $4.4 million.

Mr Ullrich said one of the private residences, in Bedford St, had sold for about $400,000, but the buyer "could be on board" with regard to the wider concept for the St Clair project.

Mr Chittock's companies under administration are White Island Investments, White Island Properties, St Clair Village Hotels and Sunbay Enterprises, but as yet no documents outlining the findings of the administration process have been added to the files.

Mr Ullrich estimated Mr Chittock had about $5 million of debt, balanced against $5 million in assets, based on present valuations, properties and cashflows.

However, two unnamed and disputed creditor claims were made this week, "which needed to be further investigated", Mr Ullrich said. But otherwise the "general situation" of Mr Chittock's debts was "not acute at present".

Mr Chittock said when contacted yesterday he was "hoping for a positive outcome for everyone", but any statements on the St Clair proposal could only be made by the administrator.

It is understood SBS Bank and South Canterbury Finance are creditors, with the latter owed about $1.5 million, but Mr Ullrich declined to talk about specific creditors until his first report was due.




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