The collapse of Abbotsford developer Caydon Property Group has left the fate of the long-awaited Nylex silos redevelopment up in the air with work on heritage buildings still outstanding.
This is "extremely disappointing", according to community advocacy group Cremorne Community Inc.
"Parts of the heritage and infrastructure of Cremorne have been destroyed or damaged and just left despite the outcomes that were promised," the group's president, Gary Shadforth, said.
Work on the $1 billion Malt District residential and "cultural destination" redevelopment in Cremorne, which started in 2018, stalled a few months ago following the collapse in February of construction company Probuild, which was involved in the project.
Caydon - the developer of the precinct - announced it had gone into partial liquidation on Tuesday last week.
The company blamed prolonged COVID-19 lockdowns in Melbourne, accelerating construction cost pressures, supply chain interruptions, builder insolvencies and interest rate pressures coupled with a negative house price sentiment for the decision to fold.
It said the contracts of all of its property purchasers should not be impacted, and that its HOME Alphington and Due North Preston projects were fully funded and would continue.
Shadforth said while some of the controversial multi-stage Malt District development had been completed at Cremorne, with residents moving into some newly built housing, the restoration of heritage buildings and construction work around the silos had not been tackled, and the site had been left in a mess.
"There's asbestos and buildings that are yet to be tended to," he said.
"It contributes to the cynicism of local residents that people just barge in and do things with little concern for the neighbourhood."
Shadforth said he would like to think new developers would take on the project and the site wouldn't be left as "a fenced off bombsite".
"Maybe they could do something simpler and nicer than the giant things they were going to build."
According to Jevan Clay, the chief operating officer of Amber Property Group, which has several Melbourne projects underway, speculated that the development was likely to be sold at a reduced price after liquidators had finished their reports.
"A project like the Nylex one will presumably go on the market at some point with the permits and be picked up by another developer - that would be my best guess.
"Projects that have started work are often heavily discounted because whoever buys them assumes all the warranty risk of whatever work's happened to date, so that's obviously reflected in a lower sale price."
Jirsch Sutherland has been appointed as liquidators of the affected subsidiaries of the Caydon Property group, with McGrathNicol appointed as receivers by Caydon's international financial backers, OCP Asia.
"The receivers are undertaking an urgent financial assessment of the properties and assets under their control," McGrathNicol's Matthew Hutton said in a statement.
"We will be working constructively with all stakeholders, including financiers of individual properties, to secure the best possible outcome for all parties."
"OCP Asia intends to support the receivership process, including through the provision of additional funding, to ensure the properties and assets can be progressed and maintained while options for development and/or disposal are explored."
