Administrators for a company which had been poised to create a £250m urban village on a patch of land in Newcastle say they have accepted an offer to sell off the site.
Plans to create a new gateway into the city were first unveiled five years ago by developer Newby, which acquired the former Calders site overlooking the Tyne and put forward a vision for the Quayside West development, with 1,100 homes, retail, restaurants, business and leisure facilities and a 135-bedroom hotel.
The scheme – likened to an Ouseburn of the west – was granted planning approval in 2020, with the city viewing the project as vital to its ambitions to breathe new life into huge areas of former industrial land in the Forth Yards area. Newby is understood to have exited the Quayside West scheme two years ago, according to documents on Companies House.
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The plans, which included new pedestrian walkways, cycle routes and landscaping, were cast in doubt in July when Quayside West Ltd, the company created to drive forward the scheme, was placed into administration – although council bosses in Newcastle pledged to push on with regeneration plans for the area, to the west of the city centre.
Now administrators Nedim Ailyan and Ben Stanyon of insolvency specialists at FRP Advisory have issued an update on progress, confirming they have accepted an offer for the land. In a statement filed at Companies House, the administrators say they enlisted independent property agents at LSH to carry out a valuation of the site.
The administrators say: “Following the above process and further consultation with the secured creditors and LSH, an offer of £7m has been accepted by the administrators, subject to contract. It is now the administrators’ intention to complete the sale as quickly as possible, with a target completion in September 2023. Creditors will be provided with a further update on the sale process in a subsequent report.”
The administrators outline the chain of events that led to the company’s demise, starting with the failure to secure Government funding, which led to the company losing its main supply of funding. The firm had looked to obtain grant funding to fuel the redevelopment of the site – needed because of high infrastructure and clearance costs.
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However, six months after getting initial approval for a grant from the Government’s Brownfield, Infrastructure and Land Fund, “due to various complications with the site and boundaries” the application was unsuccessful, forcing the company to explore alternative options.
The company’s secured creditors then confirmed that they would not be able to continue to provide additional funding until a new strategy had been found – but then a winding-up petition, supported by two other creditors, was received from the development manager due to unpaid fees, with a hearing date set for July 2023.
The company turned to FRP for advice, and two months later the business advisors were officially appointed as administrators by Reditum.
The document shows that Quayside West Ltd collapsed owing company creditors £14.68m, with unsecured creditors claiming around £4m - but the administrators say it’s unlikely those debts will be paid. The company has four secured creditors, each of which provided finance to either fund the acquisition of the site, or to further the redevelopment scheme, and the total debt owed to the four groups is understood by the administrators to be in excess of £10m.
They say the debt owed to two creditors will likely be “substantially repaid” as a result of the deal to sell the site – but that there won’t be funds available for the remaining two creditors.