Plans for the Crusader Mill scheme in Piccadilly East. Credit: Capital & Centric.
The developer behind the multi-million pound renovation of a Manchester mill will ‘re-borrow’ a publicly-funded loan to cover increasing costs of the project.
Capital & Centric, which borrowed nearly £25m from the Greater Manchester Combined Authority (GMCA) for the Crusader and Phoenix schemes near Piccadilly Station, has requested some of its repayments to be returned.
It comes after Bolton-based construction firm Artez went bust in October.
A new contractor has now been appointed to complete the conversion of the Crusader Mill into 126 apartments, and construction recommenced last year.
So far, 84 flats have been completed at the converted mill which featured in BBC documentary Manctopia and the first residents moved in last May.
A further 75 flats have been built at the neighbouring Phoenix development.
But the developer has requested that some of the repayments it has made to the Greater Manchester Housing Investment Loans Fund are ‘re-borrowed’ to cover the cost of finishing off the remaining flats at the delayed development.
Where is the project up to so far?
Director and co-founder Tim Heatley said the project is now making ‘good progress’ and all of the homes are due to be finished in the next few months.
He said: “As a result of Artez going into administration, the restoration experienced a slight delay whilst we appointed a new contractor to finish it.
“The GM Housing Investment Loan Funds extended their loan period to account for the delay. We’ve been working closely with the GMCA to ensure that we get this amazing building completed.
“Collectively we’re bringing a beautiful old, listed building back into use, in an area that was previously suffering from crime and antisocial behaviour.
“This project has acted as a catalyst for change and Piccadilly East is now benefitting from hundreds of millions of pounds of investment to create homes, hotels, workspaces and public spaces.
“I think it’s a great model of how the private and public sector can work together to make our towns and cities a much better place for all.”
The developer has ‘banned’ investors from buying the new properties in a bid to make sure that all of the buyers who move into the mill are owner-occupiers.
Buyers have been ‘incredibly supportive’ despite the delay, according to Heatley who said there is now a real ‘community spirit’ in this part of the city.
What’s the background?
In July 2017, the GMCA agreed to lend Capital & Centric £15.7m for the Crusader scheme and a further £9.6m for the Phoenix development.
The developer has already repaid some of this loan – but it has requested that some of these repayments are ‘redrawn’, allowing it to re-borrow some money.
The value of the loan is unchanged and the maximum sum that can be owed at any point stays the same – but some of the lending terms have been amended.
The amount of money that the GMCA will allow Capital & Centric to re-borrow has not been disclosed due to commercial sensitivity, however, the Local Democracy Reporting Service understands it is a multi-million pound sum.
The developer, which spends over £2m a week on ‘regeneration projects’, will also be putting more money into the scheme which is worth around £50m.
When Artez went into administration in October, a spokesperson for the GMCA said this was not expected to affect any future loan repayments.
Commenting on the latest decision, a spokesperson said the GMCA ‘takes account of specific circumstances’ and ‘offers flexibility to all loan recipients.
The spokesperson said: “Across these two Capital & Centric developments, a significant amount of sales have now been completed, with the proceeds used to repay the fund’s loans.
“Capital & Centric requested that some of the repayments it has made to the Fund are re-drawn to support the cost of completing the construction work and other expenditure arising from the delays caused by the failure of their contractor, Artez.
“We expect the full loan to be repaid within the new timescales.
“The GMCA is regularly updated on the performance and repayments of all loans awarded via the Greater Manchester Housing Investment Loans Fund.”
Last year, Stockport Council agreed to lend £60m to Capital and Centric to restore Weir Mill and build a new 14-storey town centre apartment block.
The ‘social impact developer’ also submitted plans to Manchester council for a new project in Piccadilly East, where the Crusader and Phoenix schemes are, for a 15-storey building with 107 flats in a £28m development named Ferrous.