High-flying property developer Rod Nielsen remains in th
e United States while his Queenstown property empire appears to be crumbling.
Nielsen leaves behind a trail of debts and sour deals.
Known for several high-end developments locally, Nielsen now faces bankruptcy – a number of his 61 companies have recently gone under as well.
The property mogul doesn’t live here anymore – he moved permanently to Las Vegas, Nevada, in 2007 – but his wife and young son are believed to be still based in Queenstown.
Nielsen’s Auckland brother and former business partner Greg has applied to the High Court to have Rod bankrupted over a $2 million debt – on the grounds his brother has fled the country to escape creditors, the New Zealand Herald reported last Friday.
Christchurch-based builder John Scott is one aggrieved Nielsen creditor.
He claims the developer owes him $631,000 after Nielsen failed to honour a personal guarantee for a development in Belfast Terrace on Queenstown Hill.
In 2006, Scott bought land off a Nielsen brothers company for $2.25 million with a “buy-back option”.
Scott claims the deal was that he would build four apartments and the Nielsen company would buy back two of the units for $3.163m including GST.
To sweeten the deal, Scott alleges, Rod Nielsen promised that he and another shareholder would “personally guarantee” the buy-back if their company couldn’t pay.
When Scott finished the two apartments last September, he asked for the money but the Nielsen company sought a three-month extension – which Scott refused.
Instead, Scott gave formal notice that he’d be selling the two completed apartments and seeking the shortfall from Nielsen and the other shareholder.
Mountain Scene has been told the two apartments have sold for a total of $1.9m – leaving a shortfall of $1.263m, of which Nielsen owes half.
The Nielsen company involved in the Scott deal, Belfast Terrace No 3, was liquidated by Inland Revenue last Friday.
Scott: “We’re out of our [Christchurch] house now and everything’s on the market and we’ve gone renting, so it’s all a bit sad.”
Queenstown realtor Fred Bramwell is another person who’s fallen out with Nielsen.
Bramwell and four other people had a four-year court wrangle with Nielsen over two sections at the latter’s Sicilian Estates subdivision in Lake Hayes.
Nielsen became involved in Sicilian Estates with business partner Justin Russell in 2004.
Bramwell bought a section off original site plans which promised large, landscaped common areas and piazzas – but Nielsen’s company later dropped all the visual niceties and squeezed in another section without telling buyers, Bramwell alleges.
“We were looking for a Rolls Royce and we got a Corolla,” says Bramwell.
The five purchasers settled out of court for an undisclosed sum about a year ago.
Wayne Gore, who with his mother Da’Vella sold the Lake Hayes land to create Sicilian Estates, also went to the High Court over a variation agreement that he claims wasn’t honoured.
Sicilian was ordered to pay the Gores about $1m in interest and penalty interest accrued over four years. The Gores got their money.
Wayne Gore knows of other Sicilian section owners “severely disappointed in the development”.
“These guys have got no conscience, no backbone when it comes to treading on people and walking over people and I think they’ve met their match in Queenstown.”
Contacted in the US this week, Rod Nielsen repeatedly refused a verbal interview with Mountain Scene.
His crumbling Queenstown property portfolio
March 13: More companies crash
Liquidators are appointed to several co-owned and individually-owned companies of estranged brothers Rod and Greg Nielsen, including Queenstown development company Belfast Terrace No. 3 Ltd. Greg also applies to the Auckland High Court to have Rod bankrupted over a $2m debt.
December 2008: Earl St
AN Earl Street commercial building owned by Nielsen company Queenstown Alpine Developments is sold following a mortgagee auction for $1.9m, despite Nielsen hoping for $2.5m.
December 2008: Companies fold
Nielsen’s Queenstown development Walter Peak Estate and related companies Walter Peak Developments, Queenstown Alpine Developments and Queenstown Villas (NZ) all crash.
November 2008: Walter Peak
Nielsen issues “must sell” instructions after putting his high-profile $50m Walter Peak Estate development up for tender. The 38-hectare block next to Walter Peak Station includes consents for eight luxury homesteads, eight guest cottages, manager’s cottage, vineyard and marina. Only two sites have sold for $2m each since hitting the market in 2006. Nielsen reportedly owes millions on this project. The land still hasn’t sold.
November 2008: Sicilian Estates
Nielsen says he’s sold all 12 of the Lake Hayes sections at upwards of $1.5m each. However, his US company website this week says seven sites are still available.
April 2008: Pasadena Villas
Nielsen lists a 3027sq m section for sale on Frankton Rd – with consent for the luxury 16-unit Pasadena Villas development. Pasadena also boasts “Queenstown’s first cable car access”. According to the Nielsen company website, villas and penthouses can still be bought off the plans for between $1.35m and $2.5m. Last November, Nielsen tells Mountain Scene he’ll keep the land “until we get our prices”.
April 2008: Fernhill Rd
Nielsen tenders a 9107sq m section on Fernhill Rd by his 32-unit Heritage Villas, opposite the Heritage Hotel. The site’s consented till 2010 for a 108-room hotel. Last November, Nielsen confirms the site’s been sold.
April 2008: Lake Esplanade
Nielsen goes to market with a big site behind his lakefront Esplanade Villas between Rydges Hotel and the YHA Hostel. He wants $16m for the land, which has consent to build 46 apartments. It still hasn’t sold, Nielsen tells Mountain Scene last November.