kudu: Deployment fails with new csproj format and 1.0.0-preview3-004056

I have a project I just converted from project.json to csproj. I read the latest issues and tried to set up the environment with a global.json containing:

"sdk": {
    "version": "1.0.0-preview3-004056"
}

I also git clean -xdf’d the repo and deleted deploy.cmd to have a fresh environment. When I deploy packages are restored fine but it seems msbuild isn’t finding them. E.g. my controllers can’t find aspnet’s types:

remote: Generating deployment script.
remote: Running deployment command...
remote: Handling .NET Console Application deployment.
remote: MSBuild auto-detection: using msbuild version '14.0' from 'D:\Program Files (x86)\MSBuild\14.0\bin'.
remote: All packages listed in packages.config are already installed.
remote: Controllers\Controller1.cs(1,28): error CS0234: The type or namespace name 'Authorization' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller1.cs(2,28): error CS0234: The type or namespace name 'Http' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller1.cs(3,28): error CS0234: The type or namespace name 'Mvc' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller1.cs(4,17): error CS0234: The type or namespace name 'EntityFrameworkCore' does not exist in the namespace 'Microsoft' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller2.cs(1,28): error CS0234: The type or namespace name 'Authorization' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller2.cs(2,28): error CS0234: The type or namespace name 'Http' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller2.cs(3,28): error CS0234: The type or namespace name 'Mvc' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller2.cs(4,17): error CS0234: The type or namespace name 'EntityFrameworkCore' does not exist in the namespace 'Microsoft' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller3.cs(1,28): error CS0234: The type or namespace name 'Mvc' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]
remote: Controllers\Controller4.cs(1,28): error CS0234: The type or namespace name 'Mvc' does not exist in the namespace 'Microsoft.AspNetCore' (are you missing an assembly reference?) [D:\home\site\repository\XXX\XXX.csproj]

The name of my Web App ends with gs and is next to dummy321.

Thanks!