Aura, close to Liverpool ’s Knowledge Quarter, was one of two Liverpool Elliot Group schemes placed into administration following Elliot Lawless’s arrest as part of a fraud investigation. Tony McDonough reports
A stalled £100m Liverpool student accommodation scheme started by developer Elliot Lawless is set to be revived in a deal struck with investors.
Aura, close to Liverpool ’s Knowledge Quarter, was one of two Liverpool Elliot Group schemes placed into administration earlier this year. Investor confidence was rocked when Elliot Group founder Mr Lawless was arrested as part of an ongoing fraud investigation.
He was arrested by Merseyside Police on December 18, 2019, following a raid on his city centre home. Nick Kavanagh, director of regeneration and employment at Liverpool City Council, was arrested on the same day as part of the same investigation.
Both men were later released on conditional bail. No charges have been brought and the investigation remains live. In March a court refused an application by Merseyside Police for the bail to be extended.
And, in late April, the High Court ruled that the raid on Mr Lawless’s home, during which £300,000 cash was seized, was unlawful and ordered that the search warrants be quashed. Mr Lawless has always maintained his innocence.
He has been working with administrators to agree a deal that will facilitate the successful disposal of his Aura scheme in Liverpool to a consortium of its original investors that had funded the project prior to its administration. The agreement is now in the hands of lawyers for final sign-off by all parties.
If concluded, the deal would mean that the project can be completed and that investors’ financial positions will have been protected. Mr Lawless has agreed to transfer his freehold interest in the site to the consortium and to transfer a neighbouring piece of land that guarantees investors can build the scheme out without hindrance.
He said: “My motivation throughout the administration process was to protect my investors and so I’m pleased with the outcome. These are people whose backing enabled me to deliver more than two and a half thousand new homes in Liverpool and I wasn’t about to leave them high and dry.”
Mr Lawless added he will continue with the separate hotel element of the site, while the investors’ intention is to build out the student homes. He said: “We’ll be neighbours now and I’ve set the tone in terms of goodwill so that we can work together to ensure both schemes are completed and succeed in the way I always knew they would.
“What I’ve done is hand over the profit element to the consortium so that, not only is their core investment protected, but they can share the surplus that a successful completed project will deliver.”
Single largest investor in the Aura scheme consortium is Mewstone Ridges and company owner Anna Doeff, added: “This is the best possible deal we could arrive at. Credit is due to Elliot Lawless for working so hard to find a solution that protected our interests.
“We’ve seen other developers just walk away in such circumstances but he stood by his word and delivered. The administrators have pulled out all the stops, too, and we’re now just looking forward to getting the builders back on site and delivering a scheme of which we can all be proud.”
Mr Elliot said he will now turn his attention to securing a deal for the continuation of the £250m Infinity residential scheme close to Liverpool waterfront and a third scheme in Salford called The Residence.
“The aim is the same,” he said. “I want to ensure investors’ monies are protected and that we can complete the projects without further delay.”
In a statement, Paul Cooper and David Rubin of administrators David Rubin and Partners, who handled the disposal said: “This was a complicated procedure which could not have been resolved without the collective buy-in and efforts of the Elliot Group and the investor consortium.
“Our team has worked hard to get to this positive outcome and we wish the new investment consortium well as they move to finalise this highly attractive scheme.”