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Manchester: Skyscraper May Take The Place Of Failed Apartments Project

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failed apartments

Skyscraper may take the place of failed apartments project

60 investors have lost a total of £449,000 on Glassworks scheme

By Simon Binns

A developer wants to build a 20-storey skyscraper on the site of CLH Holding's failed Glassworks residential scheme in Manchester city centre, according to a lender to the original project.

Investors stand to lose almost £500,000 through the collapse of CLH Holdings, based in Bolton. The company was placed into administration in January after it defaulted on a bridging loan payment owed to Cheshire-based Penmarric Plc, controlled by former Bodycote chairman Joe Dwek and his family. CLH Holdings had just one director, Justin Molloy, and Bolton-based Tenon Recovery was brought in to run the business.

However, CLH Holdings had already collected deposits of 7.5 per cent from 60 investors for 72 apartments in the Marshall Street scheme, totalling £449,117. These investors now look certain to lose their money.

Dwek told Crain's that a new buyer was lined up for the site, but it would not see Penmarric recoup all of the £2.4m loan provided to CLH Holdings.

“It looks like we'll probably lose around 15 per cent,” he said. “But our chances of getting some of the money back are reasonably good. There is an offer in from a large Manchester-based development company which wants to build a 20-storey skyscraper with residential, retail and leisure. They are very keen and are looking to submit plans soon.”

Dwek said that the offer for the site was around the £2m mark, but would not confirm an exact figure. The property had been marketed with Sanderson Weatherall for £1.5m, but in the administrator's document, Tenon had estimated realising £2.2m from the sale of the site.

However, one disgruntled investor, who asked not to be named, complained that the developer and agents had not told him of problems with the site when he raised concerns late last year.

He now stands to lose around £11,000, but larger investors, especially a number based in Ireland, will lose up to £50,000.

The investor, who works in Manchester city centre, decided to buy into the scheme last summer, but was concerned about the slow progress on site.

“I got the impression things weren't going to plan towards the end of last year,” he said. “It was supposed to be finished in summer 2008, but when nothing was happening between August and November, it was obvious something was up. But the agents kept fobbing us off, and told us that the finance was in place and everything was fine, but the developer was just changing contractors. I found myself in a tricky situation in November, as I was told I had to pay another 2.5 per cent on top of the initial five per cent I'd already paid, or my contract on the development would have been defaulted and I'd have lost my money anyway. So I paid, thinking everything was on track.”

The investor now stands to lose around £11,000. “It's obviously money we could have done without losing,” he said. “I know the area and it looked like a smaller development with a bit more potential. I'm really disappointed.”

Dwek said that the original scheme was flawed, but that investors could have taken the decision to abandon their interest sooner. “I think that Mr Molloy didn't really think the scheme through,” he said. “It wasn't really viable for that site.

“I feel sorry for the investors who have lost money, but they had only put a deposit down, and could have walked away at any time and written it off to experience if they felt the scheme wasn't going to plan.”

Tenon Recovery declined to comment and Molloy did not return calls.

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He now stands to lose around £11,000, but larger investors, especially a number based in Ireland, will lose up to £50,000.

Losing 11K is something he will look back on and say 'it's the price of an education', he's got out of it and he can recover from that and hopefully he won't do anything so silly again. These Irish investors who have snapped up several off plan properties in the hope of repeating the Dublin effect? I am sure the forum members will light a candle at mass for them. :rolleyes:

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