Contractors for collapsed Cube ‘will be paid’

CONTRACTORS working on Birmingham’s troubled Cube development have been told by administrators they would be paid and urged to continue to  work on the project.

Birmingham Development Company and construction firm BuildAbility called in the administrators on Friday after talks to extend banking facilities with Lloyds collapsed.

PwC have been appointed and moved to reassure workers over the weekend that building work on the project would continue. Work was due to complete within the next four months, and PwC has indicated it wants to finish the build in order to market the asset as soon as possible.

BDC chief Alan Chatham  also developed the Mailbox, transforming a run-down part of the city into a canalside centre of high-quality shops and restaurants.

That development is owned by a separate company to the Cube, although a major refinancing deal with RBS and Lloyds was arranged two years ago when a buyer could not be found.

The Cube occupies an adjacent site and was due to incorporate a hotel, rooftop restaurant and luxury flats.

In a statement, the directors of BDC said: “We are bitterly disappointed that we have been unable to reach agreement with Lloyds Bank to enable the development of The Cube to be funded to completion, particularly when the project is so close to completion.

“As a consequence, having taken legal advice, the directors considered they had no alternative other than to request that Lloyds Bank appoint administrators – which has now been done.

“It is a sad day for The Cube, an ambitious project for Birmingham, into which we have put five years of our lives, but like many development projects across the UK, it has succumbed to the pressures of the global economic downturn, which followed the credit crunch.”

Matthew Hammond, joint administrator and partner at PricewaterhouseCoopers LLP in the Midlands said: “Since our appointment as administrators, we have been working to keep The Cube project on track and to preserve the project for all involved. We have been in close contact with all 39 of the main sub-contractors, which have some 500 workers on site each day, to seek their agreement to continue working.  In return, they have been given assurances that they will be paid for work carried out in February and March as well as for any further work they do during the course of the administration.
 
“We are pleased to confirm that we have now secured the support of most of the critical contractors, although there are still a small number of contractors with ongoing queries and concerns.  We are continuing to discuss these with them individually and are hopeful that we will secure their support.

“I would like to thank the staff of BAL for their understanding, cooperation and support in the immediate aftermath of the administration. They have certainly helped us to keep The Cube project going.”