Hotelier in bid to restart work on Sorrento's Continental Hotel

A recent attempt to sell the project to another developer LBA Capital for $21 million came unstuck when The Age revealed LBA’s director Demetrios “James” Charisiou had been accused in the Supreme Court of involvement in a sophisticated $400 million fraud against a Korean investment house.

In the Continental’s latest twist, Mr Gerner said on Thursday he intended to retain ownership of heritage-listed project following both the collapse of Steller and the failure of LBA Capital to settle on its purchase.

“I have negotiated an agreement to deliver on the vision to restore, renovate, protect and preserve the 1875 ‘Marvellous Melbourne’ hotel,” Mr Gerner said.He hopes to restart construction on the four-storey limestone pub after Australia Day next year.

The hotel is now effectively a building site with a large concrete slab and has been sitting empty since Steller’s collapse amid an outpouring of concern from hundreds of frustrated locals seeking answers about its future.

It was built in 1875 and has the highest level of heritage protection due to its historical significance.

Mr Gerner said he had briefed Heritage Victoria and the Mornington Peninsula Shire after forming a new company, The Ocean Amphitheatre Company, to take control of the development.

Mr Gerner said he would be approaching potential investors to fund the final $100 million in construction and acquisition costs.

“It’s a massive relief. I’ve got a couple of key high net worth individuals I will be targeting in coming weeks,” he said.

Title documents show the Continental Hotel site is mortgaged to three different lenders, a factor which could complicate Mr Gerner’s efforts to take control of the redevelopment.

Mr Gerner originally agreed to purchase the Continental Hotel from the Di Pietro family in 2015 for $12 million.

Around the same time, the local council sold him a neighbouring site at 23 Constitution Hill Road for $1.98 million.