DOUBT has been cast over the future of a key Honeysuckle development that was earmarked to address a critical shortage of A-grade office space in Newcastle’s CBD.
Nathan Tinkler’s embattled developer Buildev Group has been granted two extensions by the state government-owned Hunter Development Corporation (HDC) for purchasing the land for the $55 million Honeysuckle Central development and faces another deadline next month.
HDC spokesman Luke Mellare declined yesterday to reveal the outstanding amount and said the corporation’s board would decide if further extensions were granted.
In a separate property deal, Buildev will return to court next month, with Mirvac attempting to recover $17 million from a failed purchase at Steel River.
Buildev reportedly has also been granted an extension until October for the purchase of an office building at 443 Queen Street, Brisbane, for about $40 million.
The Herald can reveal that a major mine subsidence repair program at the Honeysuckle Central site, that must be completed before construction begins, is in tatters after the work was left incomplete.
HDC had told the industry in July that the work was finished, but contractors told The Herald this month the job was ‘‘far from complete’’.
Paul Roberts of BHC Drilling said many of the holes he had drilled at the site before work stopped last year would have collapsed.
The holes were for grouting to combat mine subsidence. ‘‘I dare say a lot of the work would have to be redone, you can’t just leave it,’’ Mr Roberts said.
‘‘We would look at going back up there to do more work, but it would have to be a cash upfront deal as there were issues with getting paid late.’’
Gill Webmore, of Bulk Flyash Grout, said the grouting was ‘‘not completed’’ and ‘‘the majority’’ of the work was outstanding.
It is understood Buildev Group spent more than $600,000 on the mine subsidence repair work last year, but there is at least double that to be spent to complete the job.
The development has been marketed as going to provide up to 18,000square metres of A-grade office space.
Mr Mellare described it as as ‘‘key part’’ of the inner-city’s business precinct and said extensions were granted to allow Buildev further time to secure pre-commitment from tenants.
He said since the global financial crisis pre-commitment was crucial for projects to progress.
Nathan Tinkler is the largest individual shareholder in Buildev. His Sydney-based public relations spokesman declined to answer questions in relation to the project.
Buildev’s construction arm, Bolkm, is managing work on the development that has Newcastle City Council approval for three eight-storey commercial buildings bounded by Honeysuckle Drive to the north, Wright Lane to the south, Worth Place to the west and a new road to the east.
HDC general manager Bob Hawes said he was unaware the mine subsidence work had not been completed.
In July the corporation said in an industry magazine that grouting work at the site was finished.
‘‘I can only assume that we got that information from Buildev,’’ Mr Hawes said.
Honeysuckle Central was approved in 2009 and building was expected to begin late last year and be completed by 2014.
The Herald has reported Buildev said it delayed construction to work through new compulsory energy ratings with potential tenants.
Mr Tinkler’s spokesman said Buildev Group’s financial position had no impact on the development.