Plans for a $70 million DoubleTree by Hilton Hotel in Karratha appear to be in disarray, with the developer behind the project unable to source the funds required to begin construction.
According to documents obtained under Freedom of Information laws by the state opposition, LandCorp chief executive Frank Marra admitted last month that progress on the hotel had stalled, with developer Ramtron Australia looking at alternatives for the project because it had failed to source construction finance.
Those options included reducing the size of the hotel, which was pitched to be five-storeys, 152 rooms and 23 serviced apartments, or finding a different hotel operator.
Mr Marra said in the documents if Ramtron was unable to find a suitable alternative proposal, a business case would be developed to consider other uses for the site.
The hotel, which would have been the fourth DoubleTree by Hilton proposal in Western Australia, was to be built at the corner of Warambie Road and Sharp Avenue, forming a significant aspect of LandCorp’s $132 million The Quarter town centre development.
Earlier this year, Ramtron joint venture partner Griffin Group told Business News that final design works and construction valuations were under way for the long-awaited project, with building flagged to start before the middle of the year.
Ramtron is a joint venture between Karratha’s Kim Loxton, Singapore-based Wei Feng, and Perth-based development company AYR International.
Griffin Group, which had a mandate to raise $6 million in return for a 60 per cent stake in Ramtron on the proviso the project goes ahead, said it had sourced $5 million in capital to support project from Singaporean investors, but had not yet committed those funds.
The hotel plan was first floated midway through 2012 at a different site in Karratha, on Balmoral Road.
LandCorp launched an expression of interest for development of a hotel site within The Quarter development in June 2013, with Ramtron selected as the preferred proponent in October of that same year.
The new location required significant changes to the original design, while development approval for the revised project was issued by the City of Karratha in June last year.
Construction of the first stage of The Quarter is well under way, with WA-based firm Doric performing the works.
Being built are a four-storey retail and commercial building, a decked car park, a public square and 46 apartments for service workers, along with a range of cafes, restaurants and other shops.
