HGB Advisory has been appointed to push through the sale of the developer’s £70m Liverpool scheme after a deal for investors take over the stalled project fell through.
The administrator has been appointed to Norfolk Street Hotel & Residence, the Elliot Group vehicle that was delivering the 306-bedroom, 16-storey Baltic Triangle hotel, while LPA receiver David Currie & Co, appointed late last year, continues to search for a buyer.
There is insufficient investor interest at this stage to force a takeover, as has been seen at various other Elliot Group schemes including Aura in Liverpool and The Residence in Salford.
Hotel operator Epic Hospitality Group was appointed under an outline management contract in 2018 to run the Norfolk Street hotel, as a full agreement was struck for another Elliot hotel in Seel Street at the time. But a spokesperson for Epic has since told Place North West that the Norfolk Street deal was never formalised.
Elliot Group founder Elliot Lawless said this week that a recent agreement that would have seen investors take control of the project fell through after a “disagreement” arose among the investors.
In a statement to Place North West, Lawless said: “The investor consortium offered to buy out my interest and I agreed to sell. It would have enabled the investors to take control of the site and complete the scheme themselves. Unfortunately, a disagreement arose among the investors and so they withdrew their offer.”
As a result, an administrator is required to complete the sales process due to complexities arising from the high number of charge holders attached to the scheme.
The likely end result of the process is that the stalled development will be sold to a developer, and investors will receive a dividend from the sale, it is understood.
John Waller, director of HBG Advisory, said he was “optimistic” that the administrator would “be able to implement a rapid process to ensure this development finds a new owner that can complete it within the required timeframes stipulated by planning [regulations]”.
Lawless was arrested in 2019 as part of Operation Aloft, a Merseyside Police investigation into suspected corruption relating to property contracts.
However, last April, the High Court ruled that a Merseyside Police search of Lawless’ property at the time of the arrest was unlawful and the police agreed to settle the claim.
Lawless, who has never been charged, added that the Norfolk Street hotel scheme was “another casualty” of his arrest.
“Prior to my arrest, we had a 100% record of delivery and each of the four schemes placed into administration were progressing well.
“The investor consortium decided they didn’t want to continue funding the hotel with me and so made the decision to cease. My company continued to fund the main contractor for some months to keep the scheme on track while investors decided how to proceed.
“As the largest single investor, I worked incredibly hard with the other investors to try and find a resolution.”
Lawless added: “We jointly agreed to appoint an LPA receiver to secure best value for the asset and it was marketed extensively for three months, receiving just one offer. Ultimately, the potential purchaser withdrew, but we had at least set a market price for the site’s value.
“We will now work closely with the administrators and the consortium to find the best way to generate maximum returns for all investors.”
Elliot Group bought the site from Liverpool City Council for £925,000 and last year valued the land at £5.7m.