SHEFFIELD'S tallest building is facing an uncertain future today – after the firm behind the 32-storey St Paul's Tower announced part of its business was being put into receivership.
Although the prestigious St Paul's apartment block, currently rising from the ground next to the Winter Garden in the city centre, is not directly part of the receivership process, the announcement by City Lofts inevitably calls its future into question.
Asked by The Star if the St Paul's project would definitely be seen through to completion, a City Lofts spokesman said: "I am not going to comment on the completion of projects.
"The whole housebuilding industry is being very influenced by the credit crunch."
St Paul's, overlooking Millennium Square in the heart of the city, is billed as the "most exceptional" apartment block in Sheffield, with interiors designed by Sir Terence Conran and views stretching for miles.
Work started in May last year and the 316-apartment development, intended as a "spectacular addition to Sheffield's skyline," is due to be completed by the end of this year.
But, since contracts for the job were signed, the price of commodities like steel has soared.
The result is that the ultimate cost of its construction has risen, too.
City Lofts, based in Harrogate, is understood to have made the receivership decision because of ongoing difficult market conditions, as well as a restructuring process.
A portfolio of residential developments in Leeds, Salford Quays, Nottingham, Liverpool and Cardiff, and a development site in Sutton Coldfield, are understood to be affected by the move.
In a statement the company said: "This move is part of a restructuring process which City Lofts has been pursuing in light of the extremely difficult market conditions both it and many other housebuilders and residential developers are experiencing in the UK.
"City Lofts is hopeful the plan to restructure its businesses can be successfully concluded in as short a time as possible."
The city centre living sector is being beset by financial problems, from the credit crunch and the property price slump to inflation and the rising cost of materials.
John Gershinson, of London residential property consultancy Allsop, has been appointed receiver on around 250 of City Lofts' unsold properties. It will now be his job to try to find buyers for them.
A spokesman at bank HBOS, one of City Lofts' biggest lenders, said: "All parties have been working hard to examine all options for the business.
"Ultimately, City Lofts deemed receivership to be the only option and hence the management team asked the bank to make the appointment."
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