Southern investors in apartments in the proposed Hilton Dunedin hotel in the former chief post office will see construction starting by January - although that depends on the developers finding a joint venture partner first.
Chief executive Dan McEwan, of Developer McEwan Group, said under their contract terms the apartment buyers could have to wait as long as 2011 for construction to begin, but he was adamant yesterday construction would go ahead in the New Year.
"If we could go in tomorrow and start we would be there," he said.
He was in Dunedin yesterday to confirm the McEwan Group was now looking for a 50-50 joint venture partner for the Hilton Dunedin and also to announce that up to four floors of the seven-storey building would be turned into commercial space - which would not affect the number of apartments or hotel rooms.
It was understood a joint venture partner would need to inject at least $6 million into the project.
When asked, Mr McEwan said apartment investors would not end up having to pay the 90% balance in 2011 for apartments which had not been built, as the onus would at that point go back on the developer to begin construction, he said.
More than 25 of the 34 apartments had already been sold off the plans and the McEwan Group has 112 hotel suites for sale, priced between $280,000 and $380,000.
While these were "difficult times" for developers at present, because of the number of finance companies in moratorium or receivership and the credit crunch, Mr McEwan was confident about financing the Hilton Dunedin.
"The reality is we do it all the time. There are professional joint venture investors out there," he said.
The McEwan Group at present had three projects on hold, but 10, including the five-star Hilton Dunedin, were still under way.
During the past four years, the McEwan Group had completed 24 projects, he said.
"In the present climate you don't rush out to build apartments in Queenstown and Auckland," Mr McEwan said.
While sounding bullish about a January start date for apartment construction, he said that would not begin until a joint venture partner was found.
"We would prefer the joint venture to be local.
Other hoteliers are interested but it would be a shame for the city to go there," he said referring to competing at the same level of service as existing hotels.
He said the hotel section of the project had been independently valued at $36 million and each of the commercial floors would be worth about $2.5 million.
Two floors had 1800sq m of space each and two had 1200sq m each, which was enough room to accommodate several hundred staff, he said.
Another change to the project was that the McEwan Group and new joint venture partner would become owner-operators of the hotel and commercial premises, which would still be Hilton-managed, Mr McEwan said.
