The battle is on to launch a rescue mission and sort out the impending mess and potential disaster caused by the feared collapse of development giants Midas.
Work has halted on Midas sites across the West Country, including two on Paignton seafront where they are in the middle of building two new hotels for the Fragrance Group and one on The Terrace where they are erecting a Premier Inn in a Torbay Council development.
Hundreds of sub-contractors have been hit - one I have talked to is owed at least £80,000.
The timing for the local economy - where big players like Midas are (or at least were) key to stability and growth in the future - could not be worse as devolution may be on its way for Torbay as a combined authority with Devon and Plymouth with more powers handed down locally and new funding bids possible through the Government's next round of Levelling Up.
Confidence was and has to be high.
In the latest Midas development, Liberal Democrat council leaders from across the West Country have written to the Secretary of State for Levelling up, Housing and Communities to urge him to support Midas and their subcontractors.
Torbay Council leader Steve Darling, Alan Connett, leader of Teignbridge Council, David Worden, North Devon council leader, and Federica Smith-Roberts, leader of Somerset West and Taunton, have sent out a united call to Michael Gove for the Government to step in to support the Midas Group.
The Midas Group, including its construction arm Midas Construction, and its housing division Mi-Space have filed notice of its intention to appoint administrators.
Midas are the ninth-largest private sector firm in the South West with a turnover of £291m and 498 direct employees.
The employment through their sub-contractors is vast.
Councillor Darling said: "Midas filing its notice of intention to appoint administrators is a grave concern for us.
"We are becoming aware of the millions that are owed to sub-contractors and are aware that this could significantly impact on thousands of jobs and businesses in the South West.
"If the Government is serious about their levelling up agenda, then the Secretary of State must step in to stop this engine of regeneration from collapsing and sending the South West's economy in to reverse."
Torbay MP Kevin Foster is seeking help in the corridors of power at Westminster.
He said: "This news is deeply concerning given the three major projects under construction here in our Bay.
"We cannot risk a situation where three large, half-built hotels sit in two of the most important locations for our tourism industry for a lengthy period without work taking place.
“It is vital the key stakeholders in this situation, including Torbay Council and the Fragrance Group as customers of Midas, work to find a solution to ensure construction can resume at full speed.
"I will work with them to do so and have already raised with Government colleagues queries about what support could be offered to ensure a speedy resolution which avoids any unnecessary delay in getting these major projects completed.”
At the Midas sites in Paignton there is no activity.
It was hoped one hotel would be complete by the summer with the second just a few months behind.
That timetable is now up in the air.
A statement from the Fragrance Group said: "Over the past three months the Fragrance Group has become increasingly concerned by the very limited progress on our two new Paignton seafront hotel developments, located on the neighbouring sites of the former Park Hotel and Lighthouse club.
"We are in constant discussions with the main contractors and are now reviewing our options to complete the development of these hotels.
"Our priority is to deliver these two new seafront hotels which mark a vital investment in the wider Torbay.
"We can confirm that the Fragrance Group is committed to Torbay.”
The two new hotels will create more than 275 new bedrooms with the Fragrance Group investing in excess of £30 million in Paignton alone creating around 100 new jobs.
Midas has now confirmed its intention to appoint an administrator - a process which can save a firm from liquidation and halts pending creditor action.
In a statement, Midas said: “On Friday January 28, 2022, the company filed notices of intention to appoint an administrator in respect of Midas Group, Midas Construction Ltd and Mi-Space (UK) Ltd.
“This does not mean that Midas has entered into administration and the company continues to operate, while the directors work to explore all available options to achieve the best outcome for the business and our people, our customers, supply chain partners and all our stakeholders.
“Midas is committed to pursuing an outcome that will achieve continuity for our live contracts and asks all our valued stakeholders to remain supportive of the group at this time.”
Cllr Darling emphasised just how important Government intervention is.
He said: "We are not going to help Midas get off their back unless there is significant support
"It is not only about Midas. It is about the thousands of sub-contractors.
"We were lobbying before Friday for intervention to see what support can happen and we will continue to do that."
It is understood that behind the scenes, alternative contractors are being approached to make sure projects are delivered.
Cllr Darling said: "We have to make sure that we are dealing with Midas appropriately and according to the contract to cover ourselves legally."
He also emphasised the important part Midas has played in apprenticeships.
"I have been in touch with Kevin Foster to encourage him to engage with any contacts he may have," says Cllr Darling.
"We must get through this because Torbay has made significant strides.
"This is a bump in the road. We have to be fleet of foot."
It is clear that efforts are being made by everybody to get through this mess and we WILL come through it together.
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