A consortium of investors in Elliot Group’s £100m student scheme in Liverpool‘s Knowledge Quarter has taken control of the stalled development and aims to restart work on site this week.
Under the agreement, first reported in June and now signed off by the High Court, the consortium of investors that had funding tied up in the scheme prior to its administration in March has been gifted the freehold title of Aura, a 1,000-bedroom student accommodation project.
In addition, a neighbouring piece of land will be transferred from Elliot Group to the consortium to guarantee that the investors can progress the scheme.
Elliot Group will develop the hotel portion of the scheme itself under the deal, and the investors have appointed Vermont, the scheme’s original contractor, to build the student flats.
The site has been stalled since the beginning of this year after Elliot Group founder Elliot Lawless was arrested on 18 December along with Nick Kavanagh, the head of regeneration at Liverpool City Council, on suspicion of fraud.
Both men were released on bail and no charges were brought, although a police probe is still ongoing and Kavanagh was re-arrested , then released without charge, at the start of this month.
In April, the High Court in London ruled that a search by Merseyside Police of Lawless’ home in December was unlawful, and the police agreed to settle the claim while continuing its investigation.
During the months of uncertainty following his arrest, Elliot Group appointed administrators at David Rubin & Partners for three of its schemes – Aura, as well as the £250m Infinity residential scheme in Liverpool city centre, and the £70m The Residence apartment project in Salford.
Lawless is seeking to agree a similar deal with investors in The Residence in Salford “within the next two weeks”, he said, while deal talks to salvage Infinity are also ongoing.
Mark Connor, chief executive of Vermont, said: “It’s a huge statement that we have been able to put all of the issues behind us and can now press on with Aura.
“This has been a fantastic effort by all involved and enormous credit is due to the investor group and their advisors who, together with David Rubin and Partners, have been extremely pragmatic. In doing so, we have been able to agree a deal that will see the scheme completed as originally intended.”
Lawless said in a statement today: “My proposal protected [Aura] investors’ interests and ensured they would suffer no loss but we still needed the court’s approval. We’ve also agreed a deal that will see the investors’ chosen contractor use some of our other land to make construction easier.
“My aim is to protect investors’ monies as much as possible and, once that is achieved, return to winning ways. I have a number of significant sites and opportunities before me and it will be good to bring them forward.”
Anna Doeff, director of Jersey-based Mewstone Ridges, the largest investor in Aura and a member of the consortium, added: “This has always been a very high-quality scheme in a prime location and I’m delighted that we can now complete it.
“Elliot Lawless is due a great deal of credit for the way he has sought to protect our interests and I’m grateful to the administrators for working with the grain of our proposals.”
Paul Cooper and David Rubin, partner and senior partner of David Rubin and Partners, handled the Aura transfer.