The Great George Street Project Limited

Bureaucratic issues involving Liverpool City Council ("LCC") have jeopardised the sale of a large construction project, heightening the risk that potential purchasers of the project may withdraw their offers.

The Great George Street Project Limited was established in 2015 as a vehicle to purchase, develop and then sell a plot of land in Liverpool known as the Great George Street Project, a five acre mixed use city centre regeneration project consisting of three individual phases. Once built, the property was intended to be used as student accommodation.

Despite securing significant funding, construction of the property never commenced, and the project stalled for a number of years. However, full planning permission and formal agreement with LCC had been obtained, enhancing the value of the property in its pre-construction form.

In November 2021, Cambridge & Counties Bank appointed Steven Williams and Gary Hargreaves of FRP Advisory as Receivers over phase 3 of the property following an unsuccessful demand being served.

Following the decision of the Bank to appoint Receivers, Francis Molloy, an individual lender, also exercised his right to appoint Receivers over phase 1 of the property, and James Fish and Craig Johns of Cowgills were appointed on 26 November 2021.

In order to achieve a sale of the property as a whole, it was considered appropriate for the company to be placed in administration. Ultimately, James Fish and Craig Johns of Cowgills and Paul Cooper of Begbies Traynor were appointed as Joint Administrators of the company.

As per the division of duties, Cowgills were responsible for realising the property, and engaged Kroll to provide marketing advice and to undertake a dual marketing process.

Ultimately, two offers were received - a £10 million offer which was subject to satisfactory planning permission being granted, and a second offer which included an element of a credit bid. Kroll recommended that the £10 million offer be accepted, with the other party indicating that they would look to increase their offer / be prepared to purchase the site should the other party’s offer not proceed.

Under the terms of a Tomlin Order, any buyer must satisfy LCC's suitability criteria, including a requirement that a prospective buyer have the capability to raise development capital from acquiring the site.

In late November 2022, Cowgills and their solicitors Farleys provided LCC details of the two potential purchasers, and LCC was asked to review and confirm whether these parties were acceptable to LCC. LCC agreed to come back to Cowgills as soon as possible.

LCC initially explained that they could make a decision under delegated authority (i.e., below cabinet level). However, following a further call on 1 December 2022, LCC explained that, due to the magnitude of the decision and the high profile nature of the site, its checkered past and political interest, endorsing and agreeing candidates would be a cabinet decision.

LCC indicated that they may not be able to give formal sign off to either bidder until a Cabinet Hearing in February 2023, but explained that it was possible the matter could be listed for consideration on 20 January. Cowgills explained to LCC that the circumstances were exceptional and that Cowgills were eager to ensure that they do not lose a potential purchaser as a result of further delays.

LCC agreed to expedite a Cabinet report and the matter was heard at cabinet level on 20 January 2023. On the date of the hearing, LCC’s interim chief executive requested an urgent, confidential call with Cowgills and Farleys to discuss the property and the potential purchasers. LCC advised that they needed some time to consider the options and that they would reply to Cowgills quickly.

No further communication was received from LCC, and Cowgills and Farleys had to chase continuously for updates, re-emphasising that the ongoing delays were causing a risk that the purchasers may withdraw their offers, and that planning permission was expiring.

LCC responded advising that a further cabinet report was necessary. The cabinet report was exempt from publication but was to be considered at the cabinet meeting on 24 February.

The Joint Administrators have indicated that an update will be provided in their next progress report. Their latest progress report can be found HERE.