Bid readied to salvage stalled Metalworks
Liverpool-based developer Danny Johnson is vying to buy the stalled development and invest an additional £30m in building the scheme, but ongoing administration proceedings involving the previous developer are complicating the process.
“I am representing 95 innocent investors who invested in Liverpool in good faith and have been let down,” Johnson told Place North West.
Agency CBRE has been instructed to sell the Metalworks site, earmarked for 319 homes, by Smith & Williamson, administrator for Pumpfields Regeneration Company.
Earlier this year, lender MoneyThing appointed Smith & Williamson as the administrator for Pumpfields Regeneration, the firm that secured planning permission for Metalworks in August 2018, in a bid to recoup £3m it is owed by the developer after the Leeds Street project failed to progress.
MoneyThing, itself in administration, is the sole qualifying floating charge holder over Pumpfields Regeneration.
Following planning approval in 2018, Metalworks was held up by negotiations over a Section 106 agreement, prompting Johnson, who has experience with distressed assets, to get involved to try and kickstart the scheme.
He took over from Antonio Garcia-Walker as director of Pumpfields Regeneration in late 2019, according to Companies House.
Prior to the appointment of administrators, Johnson had attempted to transfer ownership of Metalworks to his Vauxhall Heights company, and had planned to take out a bridging loan to pay MoneyThing.
However, due to Smith & Williamson’s appointment as administrator, the transfer of the former Lawtons site, never materialised.
In total, Pumpfields Regeneration owes around £7m to creditors, including £4m to investors that was paid before Johnson joined the firm.
Now, Johnson is planning to table a bid to buy the Metalworks site, valued at around £2m, for the scheme’s 95 investors.
“It is a great site but 95 investors are about to get shafted,” Johnson said.
Johnson was involved in helping investors in the infamous Herculaneum Quay project take control of the long-stalled scheme after it had passed through multiple developers’ hands.
On the Metalworks development, Johnson has enlisted the help of consultant Mitchell Walsh whose remit is to garner the support of the development’s investors in the hope of adding weight to Johnson’s bid for the site.
Both Walsh and Johnson, who spoke exclusively to Place North West, fear that if the scheme is sold to a third party, the investors will lose their money.
“We are preparing to go to court to challenge if the administrators decide to sell to a third party,” Johnson said.
Walsh was part of a deal that saw the Lyceum residential scheme in Eccles rescued from administration earlier this year.
Led by Walsh, a group of investors bought the 82-apartment project on Church Street in Eccles for £1.1m following the collapse of the previous developer Lyceum Manchester, a vehicle owned by Goodwin’s Construction Services Group, which is in administration.
Walsh hopes a similar outcome can be achieved for the Metalworks investors.
“It is my job to hold [the investors’] hands and give reassurance. It is hugely rewarding to help these innocent investors who could lose every single penny,” he said.
So far, Johnson and Walsh claim they have the support of around 70% of the Metalworks investors and conversations with the remaining 30% are ongoing.
“We always said our aim was to protect our investors,” Johnson said.
“We want to spur people on and show them the power of the collective.”