City councl launches legal action over stalled Chinatown

Liver building

Liverpool City Council has begun legal action against Chinatown Development Company, the tenant company of the stalled £200m New Chinatown development.

The city council has instructed solicitors to start legal proceedings to forfeit two leases on the city centre site.

At the same time, a statutory demand has been issued for the outstanding sum of £950,000 owed to the council by developers Chinatown Development Company, a subsidiary of North Point Global.

If Chinatown Development Company does not make the payment by Thursday, August 10 the council will apply to court to ‘wind up’ the company and if the petition is successful, the court will put an official receiver in charge of the liquidation.

In this event, the council would seek repayment and look to work with the liquidator to find a solution to the stalled site as the city council also owns the freehold and is the landlord of the leases.

The city council’s position has hardened in light of new legal advice and financial information which means the site, which has planning permission for 790 new homes, will not be marketed for sale and the council will not be seeking to use Compulsory Purchase Powers, as set out in a cabinet report drafted six weeks ago.

In June 2015, Chinatown Development Company Ltd acquired the site, at that time called Tribeca, from Urban Splash and the city council, to create the housing and leisure scheme.

To be delivered over three phases, the scheme was to create a new urban quarter with the new homes, 11,246 sqm of commercial and retail floor-space and a 140 bed hotel.

In December 2015, phase one of the scheme was granted detailed planning consent and outline planning consent was given for phase two and three. A 250-year lease on phase one was granted in April 2016.

Since then council says that the sales agent for the company has been accused of fraud in the Hong Kong market, which impacted on sales to the extent that works on site stalled and the building contractor went into administration.

Councillor Ann O’Byrne, Deputy Mayor of Liverpool, said: “Liverpool City Council has explored every avenue and worked with the developer in the proposed transfer of the Chinatown site to a new buyer, but insufficient progress has been made.

“There are a number of challenges which could affect the transfer to any new buyer and in light of new legal advice and financial information, the approach to market the site has become unviable.

“We have sought reassurances from Chinatown Development Company but regrettably an agreement could not be reached and the council has been left with no choice but to take this new course of action.

“The council remains committed to the redevelopment of the site and if a liquidator is appointed, we will seek a quick resolution to get the scheme back on track.

“Although the council has no contractual obligations to any investor, we fully appreciate their concerns and the council will look to work with the liquidator in a proactive way to find a solution to the stalled site.”

North Point Global has so far declined to comment.

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