Contractors Wait In The Half-built Wings

Newcastle Herald

Saturday May 17, 2008

By IAN KIRKWOOD

THE already delayed Bellevue Hotel apartment block has been shut down while the developers seek new funding for the half-built project.

Subcontractors working on the eight-storey Task Developments site say they are owed an estimated $700,000 for the past three months of work and are concerned they will not be paid if the developers cannot refinance the project.

Architects Jackson Teece initially valued the project at $7 million, with the debt component of the funding to come from Port Macquarie company Momentum Mortgages.

Momentum spokesman Brad Gilbert confirmed his company would not be providing further financing for the job but declined to say why.

One contractor, PFM Plastering Specialists director Peter Majdandzic, said yesterday he was owed an estimated $300,000 after having about 20 plasterers working on the job.

"We had to go to court to get money owed for our work on the Menkens apartments, we did [lost] more than $140,000 in Bay Building, and now this," Mr Majdandzic said.

He said people in his situation had little choice but to "hope for the best".

Task Developments partner Scott McKenzie said the Bellevue job was shut on Wednesday and the consortium was looking for more funding.

A "tightening of funding requirements" and cost overruns because of heritage matters and other issues had caused delays, but he hoped to attract new finance and resume work on the site in the next few weeks.

He said 12 of 31 residential units had been pre-sold but Jackson Teece was no longer buying the old hotel section for its new offices.

A Jackson Teece spokesman said the deal fell over months ago. It was unrelated to a split at Jackson Teece that saw former partner Keith Savage, who remains a partner in Task Developments, leave the firm and move to Darwin.

The Bellevue job is one of a handful of projects under way in Newcastle West and a spokesman for the builders' union said all were needed for the precinct to go ahead.

"If one or two of these fall over, then it could be years before the West End recovers again," Construction, Forestry, Mining and Energy Union spokesman Peter Harris said yesterday.

© 2008 Newcastle Herald

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