Construction firm Goodwin has refuted claims by collapsed developer Pinnacle (Angelgate), arguing that it was never appointed main contractor on the stalled £73m residential project, contrary to statements put out by Pinnacle throughout the course of this year.
Company director Richard Goodwin told Place North West that his firm was never appointed to build the Manchester scheme, but did reach a pre-construction agreement with the developer in a £70,000 deal. According to Goodwin, his company was simply asked to price the job rather than act as main contractor.
He confirmed Goodwin was still owed around £50,000, despite the company not being listed as a creditor in Pinnacle (Angelgate)’s statement of affairs, prepared by director Carl Mills and published last month.
Administrators were appointed to the developer earlier this year, owing its creditors £30m. Apartments at the 344-home scheme were sold off-plan, largely to overseas buyers.
An administrators’ report released this month revealed the company had drawn down £28.7m of buyers’ money, but had not revealed how this had been spent.
The report also said that more than £13m of buyers’ money was spent in commissions to Pinnacle’s sales agent, Pinnacle MC Global Network, leaving the developer £10m short of the initially agreed design-and-build cost before any construction work had begun.
The administrators confirmed that construction costs on the project nearly doubled in just nine months from £22.1m to £43m.
The collapsed developer said in April that it had “reached an agreement with a reputable main contractor”, understood at the time to be Goodwin, to take on the build in a £36m deal “at no extra cost to buyers”, after original contractor PHD1 exited the scheme after falling into administration.
At the time, the developer claimed PHD1 had “significantly under-valued the build costs” for the scheme. A spokesperson from Goodwin also said: “We are looking forward to recommencing the Angelgate build. The development has huge promise in the thriving city of Manchester. We’re ready to commence work as soon as the pre-construction services agreement and surveys have been conducted and we have buyer approval.”
However, Pinnacle later backtracked on the claims in an email to investors, which said it had “unintentionally misinformed” customers that Goodwin was main contractor.
However, Goodwin hit back at claims in the administrators’ report, which said his firm “did not appear to have the track record or financial ability to successfully take on a contract of this magnitude”, arguing that the contractor and its team had delivered projects of that size before.
Large schemes that the company is main contractor for include the two-phase Parliament Street development in Liverpool, which will provide nearly 300 apartments.
The administrators also said that although Goodwin “appeared to be independent” from Carl Mills’ business interests, it operated from the same Cheadle office where an accountant which lists Mills as a director is also based. However, Goodwin said Mills “was never there”.
Goodwin confirmed his interest in building out the project and that his company would still look to deliver it for its original agreed price to allow buyers to claim their investment back.
If the site is sold, rather than built out as planned, buyers are set to lose out on £23.7m, according to the administrators’ outcome statement, with buyers receiving 21.5p in the pound.
Unsecured creditors would expected to receive “0p in the pound” if the site is sold.
It is understood a number of main contractors have already been in contact with land agent Lambert Smith Hampton about building out the project, with “top tier” firms pricing the job at around £45m to £50m.
However, Goodwin is still confident the scheme could be delivered at £36m, and confirmed discussions had taken place about completing the scheme.
The project’s future will be determined in the New Year, with a deadline of 17 January set for any interested party to lodge build-out proposals for the site.
Pinnacle declined to comment.