Developer plans to take banker to court

Auckland's largest apartment developer is bringing legal action against its banker.

First City Group's legal manager, Doug Williams, said he hoped an injunction application would be heard by the High Court against financiers Bridgecorp next week.

He said this was intended to overturn Bridgecorp's decision to install Anthony McCullagh, of Horwath Corporate Auckland, to manage the finances of four companies associated with First City.

First City has built many apartments in the past four years and is putting up the city's tallest residential block, the $75 million 38-level Residences@Harbour City on Fort Street.

Units in the block were pre-sold before construction, after being heavily marketed in Asia before building started.

Multiplex Constructions (NZ) is moving fast and the 378-unit tower will soon be completed.

McCullagh has been installed at four companies of which First City boss Colin Godfrey is a director.

Williams said First City and Bridgecorp were in dispute over how much money was borrowed on Residences@Harbour City.

The companies placed under financial management are:

* Nerobby Holdings, which owns a former Rotorua cinema complex with shops on Hinemoa St.

* Sale Street Apartments, which owns property at 34 Sale St in Auckland and where First City has its own offices, apartments and storage area.

* Trans Tasman Hotel Corp, with property on Arawa St in Rotorua.

McCullagh said he was also managing the finances of Manukau Apartments, which owns property in Rotorua.

Bridgecorp boss Rod Petricevic said the matter had nothing to do with the Residences@Harbour City.

The move to install McCullagh was simply "a tidy-up and rationalisation" of matters.

"Godfrey is the developer for the largest apartment block in Auckland and ourselves and other financiers are supportive of that," he said.

"So there's no issue. We can't comment to you about a process we have to follow.

"There are prior charge holders, so there's a whole process of how people get paid and the first bite of the cherry."

First City developed Century on Anzac, a 13-storey, $21 million, 92-unit block on Anzac Ave, built by Multiplex. Multiplex also built First City's Eden Apartments, a $31 million, 14-storey, 122-unit, block on Eden Cres.

In 2002, First City offered to give away a free apartment worth $135,000 in Eden Cres.

It sent letters to people earning $40,000-plus, asking them to visit a display suite for the development and watch a presentation to qualify for the top prize. The company's website says it is also developing KingsView apartments in New North Rd, Kingsland.

Meanwhile, four other Godfrey companies have just been liquidated. They are Eden Crescent, Future Planning, Riverslea Investments and The 100.

Accountant Peter Brannigan was appointed liquidator and told unsecured creditors they were unlikely to get more than 20c for every $1 owed.

Rising fast

* Auckland is expected to have about 30,000 people living in CBD apartments soon.
* Consultants DTZ said the city had 8500 apartments by the end of 2003.
* Last year, another 4200 were being built and 3200 more were planned.
* Building is continuing apace, with tower cranes on many apartment sites.
* The largest block going up is Residences@Harbour City on Fort Street.