Sandringham Hotel In Receivership, Future In Doubt

10 July 2012 | 9:22 am | Scott Fitzsimons

The venue owes the bank $3.6 million

Sydney's beloved Sandringham Hotel is officially in receivership, with a debt to Bankwest reaching $3.6 million. Owned by Tony Townsend, the Newtown venue has been a staple of the live music scene for three decades and has stood on King St since the 1860s.

The Sydney Morning Herald have reported that "three men in suits" arrived at the venue yesterday to alert Townsend of the latest development of the venue, which is now in control of accounting firm Ferrier Hodgson.

The Hotel, known as The Sando, had defaulted on its $3.2 million loan to the bank, which covered the original mortgage with ST George, last year and Townsend attempted to sell the venue and lease it back as a way to raise capital. Passed in at auction, the $3.35 million asking price failed to attract any buyers.

With the monthly interest rate rising to $48,000, Townsend told the paper that a harsh hotel industry climate has made the repayments unachievable.

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''It's sad,"he said. "It's sad for live music, it's sad for me personally it's sad for my family. This was supposed to be not only a legacy for us but, I guess, our income in retirement. And that whole dream's gone.''

Ferrier Hodgson have indicated that live music will continue for the foreseeable future and the insolvency firm will, "have a better understanding of the market's appetite for this asset in coming weeks."