Liverpool’s bid to buy stalled New Chinatown falters
Concerns around “corruption and reputational issues” continue to dog the city council, which is trying to take control of the high-profile development site off Great George Street, previously being brought forward by North Point Global.
Despite a concerted effort to improve its governance in the wake of a damaging report published two years ago, Liverpool City Council is facing resistance in its efforts to acquire the stalled £200m New Chinatown opportunity out of administration.
Advisory firm Kroll, which is acting for administrator Begbies Traynor, raised questions about the £6m bid for the site, according to an update published on Companies House.
Kroll “refused to recommend or comment on any sale to Liverpool City Council based upon concerns of corruption and reputational issues”, the report states.
Begbies, appointed as administrator over Great George Street Project Limited last year, is now seeking a “second opinion” on the bid.
Kroll and Begbies did not respond to Place North West’s request for comment.
A spokesperson for Liverpool City Council said: “Some of the comments in the administrator’s report are inaccurate and have raised a number of questions, which the city council will be raising with the administrator and their representatives.”
The city council’s efforts to acquire the New Chinatown site saw the authority refuse to endorse a £10m bid from an unnamed party in May, according to the report.
LCC has the right to veto bidders who do not meet certain criteria under the terms of a court order.
In the city council’s opinion, the bidder “did not satisfy due diligence requirements and was not considered a suitable or desirable purchaser”, Begbies’ report states.
A second bidder “appeared to meet LCC’s criteria”, however, the city council rejected that bid, too.
Ascot Capital, another party embroiled in the New Chinatown saga, has raised concerns about the city council’s conduct in relation to the bids, which were submitted in late 2022.
Ascot, which owns the debt on part of the site, has expressed “concerns” about the amount of time Liverpool City Council took to make a decision on the bids.
Begbies’ report states that “Ascot believed LCC were delaying matters so that the existing planning consent would expire and [the city council] could then seek to take back the site at a discount”.
Liverpool City Council would not comment on this specific statement, referencing its response regarding “inaccuracies”.
In light of the delays, Ascot sought to discharge certain conditions relating to the planning permission to prevent it from lapsing but was met with resistance; Liverpool City Council’s planning department twice refused to give Ascot permission to carry out certain works.
Ascot then took it upon itself to do the work anyway, a move that did not go down well with the city council, according to Begbies’ report.
“The administrators received a letter from LCC threatening legal action… for allowing [Ascot] access to the site and undertaking work without [the council’s] consent.”
The city council ultimately “dropped the issue”, the report states.
A backward step
The contents of the administrator’s update fly in the face of the city council’s recent efforts to repair its reputation following Max Caller’s report and a Merseyside Police investigation into corruption that saw former Mayor Joe Anderson and head of regeneration Nick Kavanagh arrested. Neither man has been charged and both deny wrongdoing.
In the wake of the Caller report, the government sent a team of commissioners to oversee the running of certain council departments. In addition, the city council moved to bolster its processes, implementing a triple lock that requires various criteria to be met and checks carried out when it comes to decision-making.
A new leadership has also been installed, with Andrew Lewis taking over as chief executive and Nuala Gallagher heading up the regeneration department.
As a result of these interventions, confidence in the city council among stakeholders seems to have been growing in recent months. The authority will be hoping the New Chinatown saga will not impact its reputational recovery.
A long-running saga
The £200m New Chinatown project in Liverpool has been in the pipeline for almost a decade.
The most recent iteration of the scheme was approved in 2020 and proposed the creation of 446 apartments across seven buildings of between two and 18 storeys, as well as a 140-bedroom hotel and more than 100,000 sq ft of offices.
Begbies Traynor was appointed as administrator over The Great George Street Project – the company behind that development – in March 2022.
Since then, Begbies’ main aim has been to find a buyer for the 8.4-acre site.
New Chinatown was the subject of £200m redevelopment proposals from notorious developer North Point Global in 2015. These plans never materialised.
North Point’s plan for the site, located east of the Baltic Triangle, featured 800 homes, a 140-bedroom hotel, and 120,000 sq ft of offices.
The developer was delivering the project through its China Town Development Company SPV, later renamed The Great George Street Project.
North Point’s involvement in the project ended in 2018 when Great George Street Developments took control of the site by acquiring a shareholding in The Great George Street Project.
Since then, former North Point directors David Choules, Lee Spencer, and Antonio Garcia Walker have been disqualified from being directors.
Great George Street Developments was dissolved in June.