Grand Albany pipedream in tatters

Part-time investor Russell Walls lost $10,000. He believed the investment had potential and blames weak legislation. Photo / Paul Estcourt

Albany City Property Investments, the business which raised $23.5 million in public money for a $500 million North Shore development, owes its creditors $76.2 million.

But it has no assets and not a cent will be repaid.

One of New Zealand's largest and most speculative property investment visions on leasehold land has come to nothing after being hatched by various ex-Chase and St Laurence bosses.

Liquidator John Cregten of Corporate Finance issued a report this month on the failed business which showed debts to about 350 bondholders of $23,559,000 and a further $52,726,000 owed to closely linked Albany City Development.

Cregten said not a cent would be available for any creditors and NZ Guardian Trust had delivered the bad news to bondholders.

The mainly retired investors stumped up initial funding for the colossal scheme on Auckland's northernmost outskirts, a mini-city for thousands of Aucklanders on bare leasehold land near Westfield Albany, bringing a new town centre.

In November 2006, Garry Looker, Kevin Podmore and Nick Wevers said plans were for a 200-room hotel, a large-scale apartment project with three towers rising up to 30 levels, 15 office blocks rising 10 levels high, a retirement village for hundreds of people and a new bulk retail centre.

Project chief Adam Reynolds said the apartments alone could sell for $400,000 to $500,000. The prospectus promised a suburban centre "similar in scale to the Auckland centres of Manukau and Botany Downs or the Sydney centres of Chatswood, Bondi Junction and Parramatta".

But yesterday, Cregten said the plans never amounted to much and proposals to lease land had been terminated.

"There's nothing there. There might have been five years ago when it was all set up but our world has changed. People involved are pretty disappointed with where it's ended up. It's just one of those things. They have been overtaken by the market," Cregten said.

Land cannot even be sold because the business never owned any: it only had subleases which have now been terminated.

The Albany business was an amalgamation of interests between St Laurence's Podmore and Mike O'Sullivan and various Reynolds family members, part of the ex-Chase/Symphony companies, as well as executives they worked with.

Together, they planned the new mega-city but the property slump intervened.

Albany City Property Investments, wholly owned by Albany Partners, was put into liquidation at the behest of the shareholders this month.

Many other companies linked to it are still live.

Albany Partners' directors are Colin Reynolds of Parnell and his son Damon of Sydney. Companies Office records show Albany Partners is, in turn, owned by Albany City Holdings (2006), whose directors are Remuera's Looker and Wellington's O'Sullivan.

Albany City Holdings (2006) is wholly owned by Burtlea Nominees of Viaduct Harbour Ave. Burtlea's owners are Nigel Burton, Jeremy Carr and Anthony Nicholson.

Albany City Property Investments' biggest secured creditor is a company linked to people who established it: Albany City Development directors are Mission Bay's Gary Noland and Colin Reynolds' son, Adam Reynolds of Grey Lynn.

Albany City Development's shareholder is Symphony Projects owned by Colin Reynolds, Looker and Noland.

Cregten said his next report on the business in about six months was likely to be the last.

ASSURANCES CAME TO NOTHING

Russell Walls, a Browns Bay retiree, lost $10,000 in the failed Albany scheme and is angry.

Four years ago, he was reassured by St Laurence's Kevin Podmore, but now the trustee for the scheme, Guardian Trust, has written to him saying his money has been lost.

"Where did our money go? It doesn't just go poof. Living close to Albany in Browns Bay, I believed this investment had potential." Walls blamed weak legislation which would mean lost savings for "many elderly, hard working New Zealanders who have built this country by hard work ... Many of these people will now be in dire financial strife which, in turn, causes health problems like strokes and heart attacks and undue stress in what should be their happy twilight years.

"As a nation I am disappointed we don't stand up with government intervention and stop this disgraceful behaviour." Walls was saving to help his grandchildren buy their own houses. Others to lose money include a retired Hibiscus Coast couple who said they had money with many other failed finance businesses, and an investor based in Japan who said he had lost money with financiers Strategic Finance and Hanover.

THE SCHEME

Albany City Property Investments' public offer:

* Prospectus registered November 2006.
* Bond offer opened November 2006.
* Closed oversubscribed, offering 10.5 per cent.
* First interest payment March 2007.
* Bonds due to be repaid December 2009.
* Scheme allowed extension toDecember 2011.
* This month: in liquidation owing $76.2m.
* No prospect of a cent being recovered.