Consider this problem. You have half built a prestige village in leafy Wahroonga with a AAA clientele of influential residents. Then the bank forecloses on the land that is to be used to build the second half of the village, including the contracted community facilities. If the second half of the village is not built the existing resident contracts may have been breached. This is Becton CEO Matthew Chuns dilemma.
The bank Suncorp wants the best price for the land possibly $6M+ as a residential block. But as a retirement village development the land is worth about $4.5M. The residents are not Suncorps problem they are Bectons problem or their receiver KordaMentha.
On April 19 Chun said he hoped to have a solution within three weeks and has been working with residents. Two months later discussion is the residents may have to manage the much reduced village themselves, including employing staff. Its not going to work and the village sector needs to step in here it is likely to get ugly.
The residents dont have the management skill set plus they have just 52 units to contribute to overheads compared to the original plan of 103 units. Plus more than a few are now facing financial difficulty thanks to generous deals provided to help them buy in - 12 to 36 months in recurrent charges were being waived by Becton to achieve sales. A number of residents simply will not be able to afford the increased weekly fees of a self managed village with fewer residents contributing.
The residents have been patient, believing a village operator will come in, buy the land and finish the village project. That now appears increasingly remote. Next step or them is a very public media campaign to scare off any residential developer who may be looking at the vacant block with very angry and articulate village neighbours. Who can blame them? The rest of the sector will however be tarred with this ugly brush.
