The hunt is on, yet again, for an investor to take over Buccament Bay Resort, which has been closed since December 2016.
The government is hoping for a new investor after the managers in bankruptcy, the accounting firm KPMG, and the three investors who were hoping to take over the project failed to reach an agreement over price and land issues.
Further, one of the three investors, whose name the government did not disclose, took a hard line on the government’s request for an indemnity in connection with the sale of some of the lands on which the property was built.
Vincentians Barry Ferdinand and Kelly Glass along with Scotsman Jonathan Mills had formed a group and were in advanced talks with KPMG and the government for acquisition of the failed resort.
There was much optimism in March 2019 when Glass, who owns two hotels in St. Vincent and the Grenadines, told iWitness News that the Buccament Bay Resort acquisition was going “quite well” although there are still some legal matters to be resolved.
“What’s happened, we have put three different groups together from the UK and here and we are in the final stages of sorting out the last bits and pieces of the legal and regulatory part of the acquisition of the hotel through the liquidators and so forth,” he told iWitness News on the side lines of a donation of whiteboards to Buccament Bay Secondary School.
But on Sunday, weeks after rumours of the negotiations having collapsed, Prime Minister Ralph Gonsalves said on radio that he had felt “pretty OK that these three investors … were going to carry through and we get some favourable conclusion.
“That turned out not to have happened…” he told listeners to WE FM.
“… it turns out that certain demands were made towards the end in respect of the pricing by KPMG, those who are responsible for resolution,” the prime minister said.
“And also the government required certain indemnities and those were really not forthcoming, either in respect of what was demanded by KPMG and also in respect of the indemnities.”
Gonsalves said that that matter is a complicated legal one that includes land ownership issues.
Parts of the resort are built on property owned by private investors who did not sell the lands to the developers.
Further, Gonsalves said that for some of the land that Harlequin, the owners of the resort, actually paid for, they have copies of the deeds but not the original.
The company’s lawyer, Samuel Commissiong, who has since died, was holding the original deeds.
“They were not registered and held by the lawyer and that lawyer died and they can’t locate them,” said Gonsalves, a lawyer, who is also Minister of Legal Affairs.
“And then there were lots which had to be acquired by the government, but we wanted indemnities in respect of when we acquired and passed on to the developers that if … we acquired for X dollars, if we acquired something for $1 million but it turned out that the compensation of $2 million, we wanted an indemnity to take a number above what we were acquiring.
“And the case is clear and we pointed out and there wasn’t an appetite by one of the shareholders, one of these persons in the consortium to provide the requisite indemnities,” the prime minster said.
He further said that the three investors were getting the resort “at a good price but there was a push for something even lower.
“In a sense, I believe they felt that they had the people over the barrel, the real owners, the multiplicity of owners.”
The prime minister said that KPMG had to operate in a manner consistent with the mandate through the court.
He suggested that there is hope yet, with another investor showing interest in the project.
“But as always, a vacuum is abhorred and I can tell you that there is interest by a regional entity which is also an international entity,” he said.
Gonsalves said that a number of people are speculating about the name of the entity, adding that he would not deny or confirm any names that are mentioned.
“I know they have had people on the ground surveying the situation and until there is something firm, I wouldn’t say what is the name of the company,” Gonsalves said.
He did not comment on a question about whether the investor was Jamaican hotelier and businessman Gordon “Butch” Stewart, founder, owner and chairman of Sandals Resorts, Beaches Resorts, and their parent company Sandals Resorts International.
Those speculations may be fuelled by a photo that Minister of Finance, Camillo Gonsalves, the prime minister’s son, posted on Facebook on Jan. 12 of the prime minister and Stewart wearing “Sandals” caps.
The photo is captioned, “Who the cap fit, let them wear it.”
On Sunday, the prime minister said that while his government acquiring the resort is still an option, it is trying to avoid doing so.
The prime minister said that his government had said that it would explore the private sector options but everyone “must be assured that at a particular point in time, the option of the state entering the picture must not be ruled out”.
He said that some members of Cabinet wanted the government to move early but he was reluctant to do so because of the multiplicity of owners.
“Hundreds and hundreds of them had put in money with the investors, with the entrepreneur — the Harlequin people; Ames and his associates…” he said in reference to the hundreds of Britons who invested in the project.
“And if the price which eventually was offered by KPMG and which was agreed upon by the investor, the group of investors and that was detailed and identified in the court as to who must provide the approval, if we had gone and acquired for that sum,
He said there would have been “howls of protests that we had basically expropriated property”, if his government had paid the sum that KPMG quoted to the three-member consortium, which price the original investors in the project approved.
Gonsalves added: “Even though expropriation is not known to our law, they would have said that compensation number would have been far too small. So you had to go through a particular process. I wanted to save the government from that particular accusation, which would affect very adversely our investment climate…
“So I am hopeful about something happening with this particular investor. I do that against the backdrop of what I said about if all else doesn’t work, there is always the state.”
Buccament Bay Resort was closed in December 2016 when the state-owned power company cut its electricity connection over the non-payment of its bill.
The power cut came after weeks of protest by workers complaining about the non-payment of wages and salaries.
In June 2017, the government brought theft and tax evasion charges against Britain-born, naturalised Vincentian Dave Ames, chairman of Harlequin.
But Ames fled St. Vincent as prosecutors swooped in on him and his physician has since said he is not well enough to return.
Ames is also facing prosecution in the United Kingdom.