Paradise sold: locals sell up as investment fund splashes millions on Mission Beach

James Mawhinney drove into Mission Beach in a rented white Mazda. Locals remember it was 21 August and the investment banker and his coterie were poking around Porter Promenade like two couples on a quiet getaway.

“The women were well-dressed, trendy tropical,” one long-term Mission Beach resident recalls. “One of the guys was wearing shorts and a polo shirt, a bit scruffy looking almost.”

Without identifying themselves, Mawhinney and John Anasis, both key figures in the Melbourne-based investment fund Mayfair 101, walked into the far north Queensland community’s real estate offices, asked to see lists of available properties and said: “We want to buy all of them.”

Related: Mission incredible: Bob Katter, Ricki-Lee and the $135m Dunk Island spending spree

Company records show that the day before they turned up in Mission Beach, Mawhinney and Anasis registered a $2 company, Mainland Property Holdings, that would become involved in the proposed purchase of more than 230 local homes, caravan parks, commercial spaces and empty blocks of land.

Mainland, which Mayfair says is part of its corporate group, has so far spent at least $7.4m taking out options to buy the properties.

Even as the first few sales are finalised, many locals say they remain sceptical about Mayfair, whose plan includes the $31m purchase of Dunk Island, the resort that has been derelict since 2011 after being battered by tropical cyclones Larry and Yasi.

Mawhinney says sleepy Mission Beach – also badly damaged during those cyclones and two hours from the nearest serviceable airport – can become a major tourism destination. The investment fund is still looking for the cash to fund the full scope of its contracted property purchases, but talks about investing $1.6bn in the area and creating more than 10,000 jobs – triple the local population.

Documents obtained by Guardian Australia show the purchases are staggered to settle at various times over the next nine months. But the plan also requires a steady stream of investors, and Mayfair is still in the process of attempting to drum up interest. There are emerging signs that the reality may not match the vision Mawhinney announced when he first arrived, or the hype generated by the billboards, newspaper ads and glamorous parties that have followed.

The largest single proposed property purchase, the Elandra resort at the far south of the beach, had been slated to be sold to Mayfair for $5.5m, to settle in February next year. It was quietly placed back on the market this week.

The rush for the exit

Mission Beach is actually four villages – South Mission Beach, Wongaling Beach, North Mission Beach and Bingil Bay – spread among dense tropical bush that in places touches the shore, one of the few places in the world where two world heritage sites meet: the rainforest and the reef.

Up and down the long stretches of beach, faded for sale signs are now mostly covered by sold stickers. More than a dozen sellers spoke to Guardian Australia. Some say their properties had been on the market for years, unable to realise the investments made since 2006 and 2007, when prices last spiked.

There is now a rush to leave town as properties begin to settle. Rob O’Neill, one half of the town’s only removals crew, moved up from Lightning Ridge a few months ago. He told Guardian Australia he was now booked solid until March as people move out.

Sellers recall being given little information by real estate agents, just that there was a cash buyer, and to come into the office to sign paperwork. In most cases that the Guardian has seen, the terms gave Mayfair’s companies a 90-day due diligence period, with a deposit due at the conclusion.

The chaotic attempts to scrutinise and process more than 200 real estate transactions seemed at times to overwhelm the local real estate offices. In some cases, Mayfair asked for extensions to the due diligence period. Some were granted; in others the seller backed out.

One seller tells Guardian Australia that Mayfair decided not to buy his property before the 90-day deadline had expired.

“They just seemed to go in so fast, then we heard absolutely nothing until right before the 90 days. My place is not on the beach, so it was probably well down the list of their priorities. They went from ‘yep, we’ll buy it sight unseen’ to just dropping out like that,” the resident says.

“Look at it this way, if I thought they would succeed in their grand plans, then I’d have kept my house and watched the value go up, wouldn’t I? A lot of people were desperate because the market has been so way down in the doldrums. Everyone saw that this was money the market wasn’t willing to pay and thought ‘right, it’s time to get out of here’.”

Mawhinney says some of the sales had fallen through and acknowledged that the significant number of purchases had in some cases delayed pre-purchase checks.

“Since initial contracts were signed, certain properties have had additional environmental and zoning due diligence undertaken,” he says.

“As a result of this process, which is standard for all major property transactions, various properties have not passed due-diligence checks and the group has decided against proceeding with these purchases.

“Mayfair 101 continues to settle on the properties it has contracted to purchase using its own resources, whilst fielding interest from a number of family offices, non-bank financiers and local and international investment groups who have all expressed interest in co-investing.”

Mawhinney says the Elandra resort purchase had fallen through during due diligence, but that he was optimistic a new contract could be negotiated.

Fault lines deepen

Long before Mawhinney and Mayfair came to town, Mission Beach was split along well-established fault lines dividing local environmentalists and business owners with competing visions. The property splurge created another fracture, between those eager for grand plans to go ahead and those who see a risk that Mission Beach could be left worse off.

“The scepticism would be the same in any small town,” says Nancy Lowe, who runs a dive boat and water taxi that used to ferry people to Dunk Island before cyclone Yasi. “When something this big happens to such a small town everyone’s always going to be wary and a little bit nervous, but the hope of something amazing happening is really strong.”

Lowe is the president of local industry group Tropical Coast Tourism. At its annual general meeting on Monday night, Mayfair Iconic Property’s man in Mission Beach, Stuart Duplock, was voted in as vice president.

Lowe says Mayfair has engaged with the local community better than any other developer who has shown an interest in Mission Beach.

“I think (the skepticism) is changing now properties have gone through completely,” Lowe says.

“We’re realists, of course every block of land that has been developed around here there’s risk. But that’s the whole reason they’ve bought the land on Mission Beach, to negate the higher risk on Dunk Island by investing somewhere else. No other company has had the level of intelligence to do that.

“Hopefully we’ll get a six star resort, but we’re never going to be Palm Cove, we’re never going to be Noosa or Port Douglas. When (Christopher) Skase came into Port Douglas there weren’t any rules. We back on to world heritage. There’s maximum build heights. Mayfair understand that Mission Beach has to retain its sleepy seaside village atmosphere.

“You only need to look at what Hayman and Hamilton islands have done for Airlie Beach and you can only hope that something similar happen (with Dunk Island and Mission Beach).”

A business owner in the main street told Guardian Australia that most of his customers were still uneasy. He didn’t want to be named because “it’s a small town and I don’t want to rain on people’s property sales”.

“A lot of people are counting on it, but a lot of people have been trying to sell their properties for a long time. To them, a buyer is a buyer and good luck to them.

“The people who come in here, everyone talks about it, on balance there’s pessimism. A lot of people think it’s pie in the sky and yeah we think there’s a risk that Mission Beach is left worse off if they buy up half the town and everything grinds to a halt before Dunk Island gets built.

“Most of the people here they might want to see Mission Beach go ahead, but we’d be mad not to look at something that seems too good to be true, and not question whether it is.”

What Mission Beach is all about

Mission Beach has long been a hub for conservation work in the far north; the poet Judith Wright, John Busst and Len Webb first campaigned to save the Great Barrier Reef from mining from a home in Bingil Bay. The first reef day tours launched from the Perry Harvey jetty, providing access to nearby coral sites in the days before faster boats could leave from larger ports.

“My biggest concern is that when you have these developments it brings in people with different expectations of how you live,” says Peter Rowles, the president of the Community for Coastal and Cassowary Conservation

“There are many of us who live here because we like the lifestyle, we like the place. If you live in a place you can either live with your environment or you can draw territories – where this is our place and that’s the environment out there. We live here because we want to live with our environment.”

Rowles says the local cassowary population has been put at increased risk in recent years, as traffic on local roads increases.

Mahwinney insists Mayfair will frame any development plans around input from the community and traditional owners, and that it wants to “protect the natural beauty” of the area and populations of important local species like the cassowary.

“The group is mindful of ensuring its development plans are in keeping with the natural, pristine beauty of the region whilst achieving our vision to make the area an Australian tourism mecca,” he says.

Liz Gallie, an artist and cassowary conservationist, says the natural world has always been an integrated part of the local community, rather than just a backdrop.

“The rainforest doesn’t get tired like built environment does,” Galle says. “So why don’t we embrace that?

“The rainforest should be a block, you should be able to walk through it and then have this experience at the beach of coming out into another world. That’s what Mission Beach is all about.”

Gallie said many people had been jolted by Mayfair’s proposals and public comments about wanting to make Mission Beach a mass tourism destination.

“Places can change incrementally and one day you go, ‘it’s not like it used to be, we’ve lost the magic’. But this was thrown out in front of us as one grand plan. The lack of subtlety is a huge thing. It’s made people go ‘we really like it like this, that’s the reason we came here’.

“It’s this little tiny place that’s different to everywhere else, it’s lush, it’s got that important cassowary population, it’s got the beaches, it’s got the rainforest coming down, it’s got that overwhelming beauty. It’s called magic.

“People know it when they see one of those days, the Mission Beach magic. That’s the point of difference that we’ve got.”