Hotel falls over

A PROPOSED six-storey hotel on Leighton Beach has fallen over, with the company behind it going into liquidation.

Former Albany hotelier Roger Foster purchased a vacant lot near Bib and Tucker restaurant from developer Mirvac in 2014 and a year later had JDAP-approved plans for a $14.7 million, 100-room hotel with three restaurants, a pool and a gym.

But he told the Herald a partner in the enterprise, Tony Canci – CEO of Henderson-based crane hire company Freo Group – felt the project had been over-valued and pulled out.

With the board of directors deciding to wind up Hotel Development Group Leighton Pty Ltd, the site was bought back by Mirvac under a condition of the original sale.

“We traded until November but the tranches from the other group didn’t eventuate and I couldn’t trade in insolvency,” Mr Foster said.

KPMG was appointed liquidator a month ago and partner Hayden White says there are about 30 creditors with combined debts somewhere between $1m and $2m.

“To date, approximately $900k has been collected in cash from bank accounts and trust accounts, with a large amount of this attributable to the sale of the property on which the development was to occur,” Mr White told the Herald.

• The proposed Leighton Beach Hotel.

“We continue to investigate other potential assets and recoveries that may be available for the benefit of creditors.”

Mr White says some of the creditors have raised concerns about the development which he’s investigating.

“Typically creditors cannot commence legal proceeding against a company in liquidation unless leave of the court is obtained,” Mr White said.

Mr Foster says he and Mr Canci were the major creditors, with the remainder being architects and others who’d been working on designs. Mr Canci didn’t return the Herald’s calls.

Mr Foster says despite the company’s collapse, he still believes the hotel was a viable project.

“It was to be branded MGallery by Sofitel; it’s Fremantle’s loss,” he says.

It’s not his first unsuccessful bid to build a hotel.

Mr Foster and his wife Julie were directors of Hotel Development Group Albany Pty Ltd which was chosen as the preferred proponent by state government development arm Landcorp to build a Mercure-branded hotel on the Southern Coast town’s foreshore back in 2012.

However, despite Mr Foster earning a good reputation running the Ibis Styles Hotel in the city, the foreshore project proved a fizzer, says Albany mayor Dennis Wellington.

“He didn’t come within a bull’s roar of getting that project up,” Mr Wellington told the Herald, adding he was unhappy with the amount of staff time sucked up by the project.

Mr Foster’s company Hotel Development Group continues to offer Albany as an option for potential investors on its website.

It also lists Busselton and Armadale, where Mr Foster has been chosen as the preferred proponent by the local councils to develop hotels, along with Murdoch, Gold Coast, Toowoomba, Maroochydore, Cairns, Melbourne, Hobart, Mackay, Sydney, Townsville, Victorian high country, Auckland, Wellington and Tauranga.

Built under the Hilton Garden Inns brand, the hotels would cost between $18m and $24m each according to the website, with Hotel Development Group taking fees for managing investors’ funds and later managing the hotels.

“Wherever anyone chooses to travel, whether on business or as a tourist, we want there to be a Hilton Garden Inn nearby to meet their needs,” the website spruiks.

Mirvac told the Herald it was considering development options for the Leighton Beach site.

by STEVE GRANT

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