Julian Gerner seizes control of Sorrento’s Continental Hotel, proposes $100 million commercial-only redevelopment

EXCLUSIVE

After a saga he can now put away to the last chapter, restaurateur Julian Gerner has seized control of Sorrento’s landmark Continental Hotel.

Furthermore, the businessman has acquired an adjacent block and will re-submit a permit application to replace the amalgamated holding with a $100 million commercial-only project containing offices, a “world class” resort and wellness centre.

Today’s announcement comes two years after Mr Gerner entered into a joint venture agreement with the now failed developer, Steller.

The pair’s redundant $80 million proposal (artist’s impression, top and below) would have included a residential component.

Earthworks started last October, but ended six months later, as building did at several other Steller development sites.

Much of the Sorrento parcel is today a hole in the ground.

Sorrento’s Continental Hotel never reopened after the former owner-occupiers, the DiPietro family, agreed to sell it to Julian Gerner in 2013.

“I have negotiated an agreement to deliver on the vision to restore, renovate, protect and preserve the 1885 ‘Marvellous Melbourne’ hotel for the Sorrento community, all Victorians, interstate and overseas tourists for generations to come,” Mr Gerner said today.

“A comprehensive and compelling investment Information Memorandum is being finalised and I am confident that required funding will be secured imminently.

“I have briefed Heritage Victoria and the Mornington Peninsula Shire which are supportive of this latest development”.

Mr Gerner added that “an army” of consultants are working to kick-start construction with Australia Day, 2020, set as a deadline.

Interestingly, the new ownership entity is ‘The Ocean Amphitheatre Company’ – named in honour of George Coppin who built the Continental Hotel and developed the Sorrento township.

Acquisition and amalgamation of 12 Rirey Lane creates 5572 sqm super-site

Mr Gerner said the development proposal has changed following the acquisition of an adjacent 1090 square metre block at 12 Rirey Lane (pictured, below).

A series of pending and new planning applications will be consolidated into his 4482 sqm holding, which includes the Continental Hotel at 1-21 Ocean Beach Road, which Mr Gerner agreed to buy for about $13 million in 2013, and settled on in 2015, as well as a neighbouring car park at 23 Constitution Hill Road picked up from the council during that time, for $1.98 million.

All up, Mr Gerner’s Sorrento site now spreads 5572 sqm.

“The [existing] excavation of 18.5 metres at the rear of the site will be extended to allow for more car parking and a ‘state of the art’ wellness centre,” Mr Gerner said today.

“The site will now be reserved exclusively for commercial use to build a world class hotel resort as well as car parking, commercial office and a staff accommodation facility at project cost of $100 million.

“The forecasts see the creation of 200 permanent jobs in Sorrento and contemplate a major economic impact on the town and the greater Mornington Peninsula”.

Mr Gerner said there will be an information session next month at the Sorrento Community Centre to discuss the hotel’s future.

The acquisition of 12 Rirey Lane (marked) adds 1090 square metres to Mr Gerner’s existing 4482 sqm holding which comprised 1-21 Ocean Beach Road (the Continental Hotel) and a former council car park at 23 Constitution Hill Road. Image: Jellis Craig

What went wrong at the Continental Hotel?

Mr Gerner acquired the Sorrento hotel from long-time owner-occupiers the Di Pietro family six years ago, settling in 2015.

The venue never reopened.

Shortly after, a major hospitality and apartment redevelopment proposal was permitted by the Mornington Peninsula Shire Council.

This plan, controversially, would have seen mid-rise buildings sprout from behind the historic four-storey limestone pub.

Since 2017, Mr Gerner had been locked in a joint venture agreement with Steller, which was put into receivership in July, nine months after it started redeveloping the Continental Hotel block.

Construction at the Sorrento site stopped just before Easter, putting hundreds of people out of work, and shining the spotlight on Steller’s financial woes.

In July, it was decided the Continental Hotel would be listed for sale. A reported deal to LBA Capital struck last month fell over shortly after when that investors’ assets were frozen.

“I am relieved, proud and more enthusiastic than ever to complete the development of this wonderful Victorian icon,” Mr Gerner, who moved to Sorrento from Melbourne with his young family several years ago, said today.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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