Birchalls developer disputes City of Launceston's deposit claim

On Thursday the council announced that it had terminated the sale with Creative Property Holdings because no deposit had been paid.

However, Creative Property Holdings director Christopher Billing told The Examiner that the company had paid a deposit to the City of Launceston Council for the Birchalls building.

"The council has since chosen to return the deposit and purported to terminate the contract," Mr Billing said.

"The negotiation process with the council has been long and complex.

"Both parties have agreed to a mediation process to resolve this matter."

Mr Billing said the company was excited to continue moving forward with plans for the Launceston Creative Precinct centred at the Paterson Street site.

"Designs are being finalised for a mixed-use precinct that will add amenity and vibrancy to the CBD and support local businesses and communities," he said.

City of Launceston chief executive Shane Eberhardt said on Thursday the City of Launceston had terminated a contract of sale for the Birchalls building.

"Following a public Expressions of Interest process seeking proposals for the redevelopment of the site, the Council agreed to sell the Birchalls building to Creative Property Holdings for $6 million," he said.

"The Council negotiated a contract for the sale and redevelopment of the building, which would have seen it transformed into a mixed retail and commercial site, with public amenities and a pedestrian thoroughfare between the Brisbane St Mall and the Paterson St Central Car Park.

"The Council terminated the contract of sale as a consequence of Creative Property Holdings failing to pay the deposit in accordance with the terms of that contract.

"The City of Launceston has agreed to enter into a dispute resolution process with Creative Property Holdings and does not intend to make further comment while that process occurs, but remains committed to an appropriate redevelopment of the Brisbane Street Mall property."

The dispute is the latest chapter in a four-year saga that has involved council and Creative Property Holdings' plans for a $90 million Creative Precinct and bus interchange at the site of the Paterson Street or Birchalls car park.

The owner of the adjoining car park, Don Allen, would not comment on whether the cancelled contract affected his hopes of achieving a $20 million sale of the car park to Creative Property Holdings.

The council bought the Birchalls building for $8.8 million in December 2019, but wrote down its value in a bid to ensure a development proceeded at the important site.