Angelgate April 2018
The Angelgate site in Manchester

Fraud investigation launched into Angelgate and New Chinatown

Charlie Schouten

The Serious Fraud Office has launched an investigation into three stalled developments in Liverpool and Manchester: Pinnacle’s Angelgate; and North Point’s New Chinatown and Pall Mall.

According to the SFO, which said it would not be commenting further on the investigation at this stage, a number of search warrants were executed on 17 January in conjunction with Merseyside Police, as part of a joint investigation with the North West Regional Organised Crime Unit.

The three projects being investigated are:

  • Angelgate, Dantzic Street, Manchester – the developer is Pinnacle (Angelgate)
  • North Point Pall Mall, 70-90 Pall Mall, Liverpool – the developer is North Point (Pall Mall)
  • New Chinatown, Liverpool – the developer is China Town Development Company, a North Point Global special purpose vehicle

Angelgate in Manchester was set to feature a £77m, 344-scheme of two towers, while New Chinatown included 800 apartments, 120,000 sq ft of offices, and a 140-bedroom hotel.

North Point’s Pall Mall site had been promoted as a £90m, 366-apartment scheme designed by Blok Architecture.

Both Angelgate and New Chinatown ground to a halt in 2016 after the collapse of contractor PHD1.

In the case of Angelgate, which entered administration in 2017, buyers of the apartments are set to lose a total of £23.7m, with unsecured creditors unlikely to receive a penny. According to a report by administrators Moore Stephens, the developer had withdrawn £28.7m of buyers’ money without determining how this had been spent.

Around £13m was spent in commissions to the developer’s sales agent, another Pinnacle company named Pinnacle MC Global Network; this left the developer £10m short of the initially-agreed design-and-build costs before any construction work had begun.

Following this, construction costs on the project  nearly doubled from £22.1m to £43m in a period of nine months.

Convicted conman Tony Freeman has been linked to the Angelgate development, and while Pinnacle confirmed that Freeman was a “consultant that strategically advises the Pinnacle Alliance board of directors”, he “does not own Pinnacle and is not a director of Pinnacle”.

The developer was liquidated last year, and investigations into the ultimate beneficial owner of Pinnacle and its parent company MVG Holdings. The site of the development was bought by Far East Consortium at auction last year for £5.2m; FEC’s development is not impacted by the SFO investigation.

At the New Chinatown site, pictured above, the developer China Town Development Company is under investigation. The company was purchased by Great George Street Developments by share purchase in March last year, with the aim of restarting work on the site.

At the time of the purchase, Great George Street said “none of North Point Global’s directors or shareholders will have any further involvement in the site”, where Liverpool City Council has the freehold.

Neal Hunter, development director at Great George Street Developments said: “There is categorically no connection between this investigation and our company, which is now in the process of rescuing a disastrous project and ensuring investors who were left out of pocket by the company under investigation get the chance of some of their money back.”

A planning application has since been submitted for a refreshed scheme at the site. The first phase includes 117 apartments and 4,100 sq ft of commercial space, and two further phases will include 466 apartments, 37 townhouses, 60,500 sq ft of shops, restaurants, and bars. There will also be 45,000 sq ft of offices and a 144-bed hotel

North Point was also bringing forward a development at Pall Mall, a site which stalled in 2016, pictured below. It has since been purchased by Elliot Group, which is set to bring forward a refreshed scheme; it is understood this will not be impacted by the SFO investigation, with the developer already moving forward with its new plans for the site.

Pall Mall Liverpool Ready For Demolition

Demolition work is now under way, with Elliot working alongside architect Falconer Chester Hall. The original scheme had planning permission for 366 homes but Elliot Group said it would be looking to develop a mixed-use scheme with both employment and residential uses.

Elliot Lawless of Elliot Group said: “This is on the northern boundary of the business district and would make a natural extension for it so we’re examining the feasibility of office uses alongside hotel, leisure and residential provision and will seek the council’s views shortly.

“Whatever we collectively agree, it will be better than what came before and will create more jobs and infrastructure for the city,” he added.

The SFO is encouraging members of the public who have invested in any Pinnacle’s Angelgate, New Chinatown, and North Point’s Pall Mall project to complete a questionnaire that can be found here.

Pinnacle companies have also seen a number of other developments stall in Liverpool: The Quadrant, and Victoria House. Both of these have since been bought after their special purpose companies entered administration, and neither of these is subject to an investigation by the SFO.

Your Comments

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At last…

By Carl

What about all the other failed developers with developments in Manchester, Bradford, Rotherham etc?

By Sandra Taylor

Hopefully this investigation will bring those truly responsible to account.

By Andrew

The SFO will have their hands full here…some very unsavoury characters involved

By Mark

Dear Charlie Schouten
Thank you for investigating and reporting this. It is really valuable to find out what is really going on in the business world, behind all the usual sales blabber and self-promotion. And, of course, to be told what the traps are, before you fall into them. It might even restore some of my long lost trust in those responsible for policing and punishing fraudsters who manage to sully the reputation of the real estate business and everyone who works in it.

By James Yates

Maybe an extradition treaty with the Dubai government will work well in this instance.

By BDAY

Would be interesting to hear the views of senior Councillors in Liverpool whose grubby prints all over the Chinatown scheme. What a scandal, and typical of this Council’s open door policy to any rogue developer. Selling Liverpool by the pound.

By John Smith

Manchester City Council has alot to answer. They withdrew planning on Angelgate so left a clear run for their preferred FEC bidder in the auction to buy it on the cheap. 2 acres City Centre real estate for £5.2m. Their excuse was development hadnt started. It had . Bases and alot of groundwork had started. If planning had been left on it the site could be worth £15m. Therefore alot of people would have got some of their money back. SFO needs to look at that.

By Charlie Thompson

Charlie Thompson: it was an open auction, anyone could have bid?

By Anon

Charlie Thompson – You honestly think the removal of the planning permission caused a £10m reduction in achieved sale price?

Everybody knows a fresh application would have been met with little resistance as it’s accepted that it’s development land.

Why would FEC be MCC’s preferred bidder?

By Mrqs

I watched the Pat Phelan storyline in Coronation Street a few months ago, where Pat and his associate (formerly Dave Glover from Emmerdale) took a number of the residents of Coronation Street’s deposits (including poor Rita’s and Sarah Platt’s) and never built it – getting off with the money – and as with most of the storylines thought this is so far fetched. That wouldn’t happen. How can this happen in this day and age?

By Russell Bolton

Russell, that’s the best comment I’ve ever soon on PNW.

By York Street

Simple and basic questioning of staff at pinnacle will confirm that the “consultant” referred to was of course in charge. Still actively trading under another guise too

By Allan

Mrqs.
Your comments are spot-on. Charlie Thompson is wide of the mark.

By Terry

Rather than MCC withdrawing permission it expired because to comply with Section 91 of the Town and Country Planning Act 1990 as amended by Section 51 of the Planning and Compulsory Purchase Act 2004 development must begin within 3 years and nothing had started.

By Anonymous

Charlie, £15M? Thats laughable, you must have been speaking to the developers convinced conman “consultant” or one of his puppet directors.
These people continue to do real harm to our economy and reputation worldwide
Decent law abiding developers, construction companies, agents and professional across the spectrum are tarnished with this site and all the others including the continuing failures in Liverpool like Herculaneum Quay. the developer there is wholly to blame for the current mess and will never be punished for it.

By Terry

The facts are the facts. I am not supporting Pinnacle. It was awful and all involved should be brought to book. There was not any need to suspend the planning whatsover. The point I was making it was alot more valuable with planning.
It devalued the site . Simple. FEC are the councils preferred developer. 2 acres in that area, city centre is worth alot more than £5.2m. Say £10m there might be something left over for people who had paid their deposits. I’m pretty sure the Receivers would agree with alot I am saying.
Also I see some responses to my comments are anon . Who are they ??

By Charlie Thompson

To Mrqs & anon, the point is , if you are auctioning 2 acres of Mcr city centre land with planning permission its worth alot more than 2 acres without. Potential buyers nationally and internationally that does not know Mcr very well, it would reflect in their interest. Thats the point I was making, not defending the rogue developers or whoever took peoples deposits etc.

By Charlie Thompson

Now these buildings stand empty and are a eye soar.How could the council l aloud this to happen.Keep our beautiful old properties..All those new ugly buildings going up.Just don’t have an style..Sad..

By Mrs McAllister

Charlie Thompson – the Angelgate site was sold at auction and as such was open market. Whilst i accept that £15k per apartment is a little on the cheap side it’s only worth what someone is willing to pay and no other developer saw fit to offer more.

The planning permission is a red herring, almost always after a land purchase the new developer will resubmit planning for the scheme they wish to build. A developer will know that the site is a shoo-in for planning so the site is valued the same as if it had planning.

By Mrqs

The going rate is £28k per unit.
That’s circa £10.2m.

By Charlie Thompson

It will be interesting to se how much FEC will be asking for appartments when they are built. Probably £200k to £250k each. Some of their profits should go to the people that lost all their savings in the Angelgate fiasco.They will probably build 500 units. Easy to make up the figures. So therefore the land was worth circa £15m.

By Charlie Thompson

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