The collapse of developer Ralan Arncliffe has left the future of its 318-unit development The Orchid at 213 Princes Highway in limbo.
The administrators Grant Thornton Pty Ltd are working to determine if purchasers off-the-plan will be able to secure their deposits.
And there are fears it will put the future of the Arncliffe Youth Centre in jeopardy after Ralan agreed to fund the building, currently being constructed, under an agreement with Bayside Council.
The Ralan Group went into voluntary administration on July 30 with initial indications that around $500 million is owed across the group.
The group has five projects: Ruby Tower 2, Tower 3 and Tower 4 on the Gold Coast, Sapphire on the Gold Coast, all being built by Ralan Capital Investments (RCI), and The Orchid at Arncliffe, being built by Ralan Arncliffe Pty Ltd (RA)
The $132 million Orchid project provides for 318 residential units and 36 commercial tenancies housed in seven buildings.
"The Administrators are undertaking an urgent review as to the feasibility of continuing the Arncliffe build and are in discussion with key lenders to the project," according to a statement released by the appointed administrators, Grant Thornton Australia.
"Any strategic decisions will be announced in due course including the impact for any purchasers in this project.
"At this early stage in the Administration, it is our initial estimate that there is a significant deficiency owing to unsecured creditors and purchasers who elected to release their deposit to the group," according to a statement to purchasers and creditors by administrators Grant Thornton Australia.
"It is uncertain how much, if any, of your deposit you may receive back if you had agreed to release it to RA as an unsecured loan," the July 31 statement from Grant Thornton Australia said.
"If a purchaser did not elect to release their deposit it is our understanding these funds are being held in the Group's trust account."
As of July 31, the administrators have contacted around 1,800 creditors of which 1,200 are apartment purchasers of Ralan developments.
The administrators are currently in discussion with the relevant stakeholders about the best way to proceed on The Orchid project in order to preserve value.
High hopes: An artist impression of The Orchid development which has been under construction at Princes Highway, Arncliffe.
"We have seen a wide range of value in terms of percentage of the purchase price in respect of deposits taken on developments," the administrators said.
In May, Bayside Council voted contribute an additional $154,000 to the Arncliffe Youth Centre, which is currently under construction, to accommodate alterations to the design.
The Youth Centre was being built in Wardell Street, Arncliffe in conjunction with Ralan's adjoining commercial and residential development at 213 Princes Highway.
Back in 2014 the then Rockdale Council entered into an agreement with Ralan.
The company would build the Arncliffe Youth Centre at Wardell Street in exchange for the council transferring the development potential from its Wardell Street property - vacant land along the railway track - to the company's adjoining land at 213 Princes Highway.
The youth centre was due to be completed by Easter, 2020.
