IT was dubbed the Big Hole of Merewether.
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It claimed a bowling green and a palm tree, closed a dental surgery, was under water, and stopped a 91-year-old woman from returning home.
Now the Big Hole is being blamed for the collapse of a development company that has gone into liquidation with debts of more than $3.2 million.
The Newcastle Herald reported in December 2015 that soft earth had given way at Merewether Bowling Club, with the venue's fence and trees at the edge of the green slipping into a neighbouring void created by earthworks at the Oceans Reach 37-unit residential and commercial development site.
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At the time, developer John Smith, formerly of Valentine, insisted: "It's fine. It's all good. Nothing to worry about."
But now it's understood that delays and costs linked to the Big Hole drama are being blamed for Mr Smith placing his development company, Merewether Developments, into the hands of a liquidator last month.
According to documents filed with the Australian Securities and Investments Commission (ASIC), the company owes $2.23 million to the Australian Taxation Office and almost $180,000 combined to the Beresfield-based construction company that built Oceans Reach, A & K MacKay Building Company, and Indent Trading, a Wickham tile company owned by Mr Smith's former brother-in-law, Andrew Parsons.
Mr Smith has also nominated that he is owed $800,000 and the company is listed as having no assets.
It's understood Merewether Developments purchased the site at 25-29 Llewellyn St, Merewether, in June 2012 from Aldi Foods for $4 million.
In mid-2015, Merewether Developments sold a percentage of the site to another company owned by Mr Smith, A.T.O.S. Pty Ltd, for $530,999. According to land title searches, A.T.O.S still owns property at Oceans Reach.
Liquidator James Shaw, of Shaw Gidley Insolvency and Reconstruction, said he was just beginning investigations into the collapse of Merewether Developments, but he understood A.T.O.S. still owned the commercial property in the building.
There is a Go Kindy childcare centre and pharmacy on the groundfloor.
Mr Smith has previously completed development projects in Carrington, Maryville, Mount Hutton and Wallsend. The 58-year-old sold his home on the waterfront at Valentine for $3.5 million last year. He did not respond to repeated attempts by the Herald to contact him.
Mr Shaw described the Oceans Reach site as having a "chequered history". A wall created during excavation collapsed in heavy rain in December 2015 causing part of a Merewether Bowling Club's back bowling green to slip into the adjoining development site.
Mr Shaw said flooding at the site and delays caused by the landslide led to cost blowouts.
"This was a project that should have been lucrative, but ended up losing money," he said. "In the end there was not enough money left to pay GST."
Oceans Reach apartments ranged in price from $519,950 for a one-bedroom to more than $1 million for three-bedrooms. Heavy rain in December and January 2015 left the site 1.8 metres under water and halted construction for weeks.
At the time of the landslide it was reported that bowling club staff had raised concerns about the excavation with the development company weeks before the wall collapsed, at the same time as Mr Smith complained to Newcastle City Council, which owns the bowling club site, about water problems from a stormwater pipe beneath the bowling green.
Oceans Reach is on the corner of Llewellyn and Merewether Streets.
The corner block is the site of the old Llewellyn Street bridge where steam trains once cut diagonally across making their way along the coal line to the old Hillside Colliery.
Do you know more? donna.page@fairfaxmedia.com.au