By Michael Koziol, Carolyn Cummins and Ben Grubb
A $61 million sale of two well-known pubs at Taylor Square has collapsed, dealing another potential blow to the rejuvenation of Oxford Street as a question mark hangs over the future of the prime site.
Kinselas and the Courthouse Hotel were sold to private property developer Virtical in September, with then-managing director Mark Toma saying at the time the company was “well positioned to realise the potential of the precinct”.
The two pub properties on Taylor Square were going to be amalgamated and developed into a hospitality mega-complex.
But Virtical is being sued by the vendor, MA Financial, in the Supreme Court after declining to settle the transaction by the due date. The parties are due to return to court on Friday.
The collapse of the deal may be a significant setback for the revitalisation of Taylor Square and Oxford Street, with uncertainty now engulfing plans to amalgamate and redevelop the venues to create an Ivy-style hospitality precinct.
It comes at a dire time for Sydney’s famous LGBTQ strip, hit by major construction works along three blocks, a cost-of-living crunch, empty shopfronts, dwindling foot traffic, struggling venues and an identity crisis.
In a sign of poor trading conditions, the stalwart Oxford Street gay bar Stonewall announced this week it would close on Monday and Tuesday nights for the rest of the winter.
Lord Mayor Clover Moore (right) and state MP Alex Greenwich during this year’s Mardi Gras celebrations.Credit: Getty / Jenny Evans
At a late June meeting, Lord Mayor Clover Moore faced irate business owners concerned about the impact of the ongoing construction – involving three buildings owned by the council but leased to AsheMorgan for 99 years – and the forthcoming Oxford Street cycleway.
Moore said the bike lane would improve the street’s amenity and make it safer for all. “I don’t know whether any of you have cycled down Oxford Street. I have, and it was absolutely scary,” Moore said. One person in the crowd replied: “You’re 78.”
Later that night, Moore attended a Pride Month event at Sydney Town Hall and told attendees: “I’ve been at the Oxford Hotel with a whole lot of unhappy business people not wanting to hear about all the fabulous things we’re doing in Oxford Street and doing for Oxford Street.”
Stephan Gyory of the Darlinghurst Business Partnership said it was probably better if the Taylor Square redevelopment did not happen as it would mean more construction. “It’s fine as it is,” he said. “Kinselas is a great venue, and the Courthouse works.”
The side of Oxford Street closest to east-bound traffic is a construction site while three blocks leased from the City of Sydney are being redeveloped.Credit: James Brickwood
Gyory said while many shops were shuttered, Oxford Street was still busy on a Saturday night. “It’s a tough one to label the entire suburb as failing or not doing well,” he said. “There’s economic malaise across the city with the cost of living.”
Redcape Hotel Group, a subsidiary of MA Financial which operates the two Taylor Square pubs, declined to comment on the site’s future, saying it was an ongoing legal matter. But in an affidavit tendered in court, Redcape director Christopher Unger said deteriorating market conditions since the September sale made city-fringe hotel developments less attractive to potential buyers.
“Construction cost increases and the challenges that face development financing have also negatively impacted the value of hotel businesses with future development potential like the Kinselas Hotel and the Courthouse Hotel,” Unger said.
Virtical’s John Palasty said the company terminated the contract as the seller “was not providing the financial information needed to complete the transaction” and a site inspection revealed the properties were run down. “As we have terminated the contract, there will obviously be no redevelopment of the sites by Virtical,” he said.
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