Receivership to ‘test the market value’ of stalled city centre hotel scheme
Property developer Elliot Group has agreed to the receivership of its proposed Norfolk Street hotel scheme.
It said the move was to “test the market value for the site” overlooking the Liverpool waterfront.
David Currie & Co has been appointed LPA (Law of Property Act) receiver to the scheme.
An LPA receiver can be appointed by a lender holding a fixed charge over a property, to enforce that charge over the property.
Virtuoso Investments, based in the Seychelles had invested in the hotel scheme and appointed the receiver.
Work began on the site in August 2019 when Newry Construction started initial site clearance works for the proposed 304-room Norfolk Street property which would be run by Liverpool hotelier Epic Hotels.
However, work stopped on the site last year following the arrest of Elliot Group founder Elliot Lawless in December 2019, on suspicion of fraud.
Subsequently, Merseyside Police conceded in High Court proceedings that the warrants and searches of Mr Lawless’s premises were unlawful and, as a result, the court quashed the warrants and ordered Merseyside Police to pay Mr Lawless’s costs of those proceedings.
The Magistrates’ Court also refused the police’s request for a bail extension and Mr Lawless was released from bail in March 2020.
He has not been charged with any offence and strongly denies the police allegations.
Last October a deal was reached in the High Court for work to recommence on Aura, a £100m residential scheme by Elliot Group, which was placed into administration in March.
The case meant a consortium of the project’s original investors could take the project forward with a development partner.
Referring to the Epic Hotel scheme, Mr Lawless said: “This is a proactive move in conjunction with the scheme’s investors to test the market value for the site. We agreed to appoint an LPA receiver as administration is more time-consuming and costly.
“My focus is on ensuring that none of the investors loses any money.
“I achieved that with our Aura scheme and the aim is the same here.”
He added: “This is a casualty of the media coverage surrounding the unlawful police search warrants executed at my properties more than a year ago.
“Many of the investors in the scheme had backed me to deliver more than two-and-a-half thousand homes, but the police’s actions spooked them and they have chosen not to proceed with the scheme. New investors were similarly deterred.”
He said: “It’s a cracking site and the appetite for development in Liverpool remains very strong so we’re expecting plenty of interest.”
