The developer of the $60-million Bowline Apartments has filed for receivership, leaving dozens of buyers wondering where their money is and if their dream apartment will ever come to fruition.
Multipart Property has handed over control of the site to KPMG, with the two businesses spending all of Friday in crisis talks.
The 17-storey proposal is located in the heart of the CBD on Hannell Street in Wickham, next to the Newcastle Interchange, was first approved in 2019 and the 118 units were pitched to buyers as high-class inner-city living, with the penthouse apartments selling for up to $1.5 million.
Nearly $60-million worth of apartments had already been sold when construction started at the end of 2021, and was expected to finish in early 2024.
However, the project has been plagued with delays and issues, including a water leak in the excavated basement that took six months to fix and three changes in builders in three years.
Last week, Multipart Property's development vehicle Dangar St Wickham Pty Ltd filed an application with Australian Securities and Investments Commission (ASIC) to appoint a receiver and manager.
KPMG confirmed the "extensive efforts to recapitalise" the mixed-use development were unsuccessful, and it had been appointed as receivers and managers on November 1.
It's understood all options are being considered at the moment, including seeking a buyer to take the project out of receivership and get it back on track.
Various reasons have been given for the financial collapse, including the building delays, the rising cost of construction materials, high interest rates, increased government regulations and red tape, and general economic headwinds.
Multipart Property did not respond to the Herald's request for a comment.
A buyer, who the Herald has chosen not to name, said she was yet to hear from Multipart and prayed the beleaguered developer would refund her money.
"It's nothing we didn't expect, but we are gutted," she said.
"We're just hoping they will give our money back quickly. We're hoping the deposits have been held in trust.
"We were repeatedly being told it's going to be completed. They could have let people out of their contracts years ago. They kept extending the sunset clause, which is not very ethical.
"I thought there would be a bit more honesty than what we've been dealing with since 2017/18."
It's understood the deposits are held in a third-party trust.
Presence Real Estate was facilitating the sale of the apartments. Presence partner and head of projects Ryan Houston said the agency was "gutted, absolutely gutted".
"We're with the buyers on this, we want this to succeed... we get paid on success, as agents we want it to be delivered as well," Mr Houston said.
"We've spent years on this project, it's effect on our business financially will be massive. We've done all the hard work, all we were waiting for was it to be complete."
Another anonymous buyer said he was yet to be contacted by the developer.
"I wasn't particularly surprised, nothing had really happened on site and it's been abandoned for nearly a year," he said.
"A couple of weeks ago a security firm rocked up and put different locks on the gate and have been there 24/7."
The buyer admitted he was "a little relieved to think there might be a resolution", after being "strung along" for years.
"They have been really scarce with information the whole way through. There has only been a handful of updates, they're not transparent," he said.
"We've been having to rent while we've been waiting. That's money we could have spent elsewhere. I'm pretty happy to move on from that."
In June, Multipart claimed to be owed $8.5 million by the project's previous builder, Eastern Pacific, after it lost its building licence and went into administration in March.
At the time, the developer said it remained "fully committed" to completing the project "with full financier's support".
The last update to buyers forecasted a completion date "from the third quarter of 2025".
