The troubled Victoria St housing project site, with artist impression (inset). Photo / Kelly Makiha
The troubled Victoria St housing project site, with artist impression (inset). Photo / Kelly Makiha
Work on a housing development on Victoria St in Rotorua has stalled due to alleged payment disputes and court action.
Developer Realm Victoria Ltd faces legal action from Venture Developments.
Kāinga Ora claims no formal payment dispute has been raised by Realm Victoria, despite its assertions.
Work on a multimillion-dollar Kāinga Ora housing development in central Rotorua has stalled amid alleged payment disputes and court action.
Auckland-based developer Realm Victoria Ltd is contracted to build 36 new apartments on Victoria St, near Rotorua Central, but nothing has happened at the site for months.
The site wascleared by Tauranga-based sub-contractor Venture Developments, which is now taking Realm Victoria to court.
Realm Victoria, meanwhile, claims to be in an “unresolved payment dispute” with Kāinga Ora – but the agency claims nothing has been formally raised.
Realm Victoria shareholders and directors Kerry Hitchcock and his son Alex Hitchcock are connected to a property management company put into liquidation last month.
Work on 36 new apartments on Victoria St in Rotorua has stalled. Photo / Kelly Makiha
Four companies directed by Kerry Hitchcock met the same end in recent years.
The deal with Kāinga Ora
Kāinga Ora bought 40 Victoria St, between Ruihi and Herewini Sts and behind Harvey Norman, in February 2023 for $3.9 million (excluding GST).
It partnered with Realm Victoria to build 36 apartments, with ownership to transfer to Kāinga Ora on completion.Kāinga Ora Bay of Plenty regional director Darren Toy told the Rotorua Daily Post in January last year that construction was expected to finish by the end of 2025.
The development included 15 two-bedroom and 21 one-bedroom apartments with 25 off-street parks, a playground, landscaping and fruit trees.
The Rotorua Daily Post asked Kāinga Ora if Realm Victoria was in breach of its contract, given no construction had started on the site.
Housing delivery general manager Caroline McDowall responded, saying Kāinga Ora was aware there had been “minimal activity” on the site.
“For commercial reasons, we are unable to comment on contractual terms.”
Asked how it came to partner with the company and whether it knew of Kerry Hitchcock’s association with previous failed companies, McDowall said developers generally approached Kāinga Ora directly with homes for sale.
It assessed the plans and, if suitable, began negotiations.
“In all potential sale and purchase agreements with developers, Kāinga Ora carries out due diligence before progressing to contract.”
Contracts were conditional, with Kāinga Ora buying the homes once they were completed and contract requirements met. The developer was responsible for all consenting, siteworks and construction.
The site on Victoria St in Rotorua sits vacant. Photo / Kelly Makiha
“We have a performance-based contract with Realm Victoria which mitigates Kāinga Ora against potential financial risk by splitting payment across a number of stages.”
Payment for each stage was made once the developer had met predetermined delivery milestones.
McDowall said resource consent was granted to Realm Victoria in May 2024 followed by building consent in November. Initial earthworks, civil and infrastructure work was done.
An artist's impression of what the Victoria St apartments were to look like.
Asked what Realm Victoria had been paid so far and if that was used to pay subcontractors for site work, McDowell said milestones and scheduled payments were commercially sensitive. The developer was responsible for managing subcontractor relationships, not Kāinga Ora.
“There are many headwinds facing the construction sector and unforeseen challenges may arise that can affect any developer. As with all Kāinga Ora housing developments, we continue to take a proactive role in monitoring progress and ensuring contractual requirements are met.”
Payment dispute and court action?
Venture Developments director Mark Fraser-Jones would not comment on whether it had been paid for the site work, as he said the matter was before the High Court in Auckland.
The Rotorua Daily Post put questions to Kerry and Alex Hitchcock, via a public relations company.
The 36 new apartments on Victoria St in Rotorua are meant to be completed by the end of 2025. Photo / Kelly Makiha
These included whether the company was in financial trouble, why the development had stalled, why it had not paid Venture Developments and whether other Rotorua subcontractors to the development had not been paid.
The response did not mention Venture but said Realm Victoria was in an “unresolved payment dispute” with Kāinga Ora.
“As this is an ongoing commercial relationship, we are unable to provide further comment and ask that questions are referred to Kāinga Ora.”
McDowell said Kāinga Ora had paid Realm Victoria under the terms of the contract.
“Realm Victoria Ltd has not raised any formal payment dispute with Kāinga Ora.”
Who are the developers?
Alex and Kerry Hitchcock are the directors and majority shareholders of Realm Victoria Ltd.
Alex Hitchcock is the director of property management company Haven Living Management, which has gone into liquidation over reported unpaid rent to landlords in excess of $850,000, according to BusinessDesk.
Kerry Hitchcock. Photo / NZ Herald
The company’s sole shareholder is Haven Funds Management, of which Kerry Hitchcock is the sole director.
The father and son are also the sole owners of other interests – Fidelta Group, Proventus Group and Realm Property Group.
The Inland Revenue Department (IRD) last year asked the High Court to put Haven Living, Fidelta Group and other companies, including Realm Victoria, into liquidation in a bid to recover unpaid taxes. Haven Living told the NZ Herald in February that action never went ahead as the IRD had been paid in full.
Companies Office records show Kerry Hitchcock was a director of four housing development companies put into liquidation in the past four years – Ormiston Rise Development, Warkworth Developments, Warkworth Holdings and Lakefront Investments.
Kelly Makiha is a senior journalist who has reported for the Rotorua Daily Post for more than 25 years, covering mainly police, court, human interest and social issues.
