Prime Minister Ralph Gonsalves has offered to meet with representatives of investor Andrea Pignataro as the government moves to buy back lands under the Canouan lease arrangement.
Gonsalves said on Boom FM that he was awaiting a response to his suggestion that a meeting take place on Friday, even as the government has offered to pay the developers US$36.5 million for the land.
Before coming to office in 2001, Gonsalves had criticised the 99-year lease that the then New Democratic Party (NDP) government had signed with investors.
The lease placed two-thirds of the 1,200-acre island into the hands of investors and allowed them to sell the land for freehold.
However, after coming to office, the Gonsalves government leased even more lands to the investors and appeared to have a cordial relationship with them.
This was the case even as islanders continued to complain about access to beaches on the island, marketed as the place where the world’s billionaires go to escape the millionaires.
Then, in September 2023, Gonsalves began to complain about the limited revenue coming from the development in the north of Canouan.
Gonsalves complained about the issue again in February 2024, even as the government was being asked to spend US$40 million to rehabilitate the Canouan Jetport on which it had spent EC$20 million 17 years earlier. The jetport in Canouan remains closed for night flights.
Gonsalves gave details of the US$36.5 million offer on Monday as he read from an Oct. 24 letter that he wrote to Pignataro about the lack of sales of lands in the leased area of Canouan, located in the Southern Grenadines.
The 99-year lease for the development of lands on Canouan was initially entered into by the NDP administration and the Canouan Resort Development in 1990 and was later assigned to CRD Holding Ltd.
The lease was entered into for the construction, maintenance and operation of a first-class residential resort and club of a distinctive character, Gonsalves said in his letter.
The prime minister noted that the lease was granted in the expectation that the project would generate full-time employment for Vincentians who would assist with the construction of villas, and long-term employment to deal with ongoing maintenance and management and operation of the resort.
He further said the lease was intended to generate revenue for the state through stamp duty, alien land holding license fees, VAT and employment tax revenues.
“Regrettably, that purpose has not been fulfilled in letter or in spirit,” Gonsalves said, adding that new development of the leased land governed by the lease has been at a standstill since the end of 2017.
He said the government was compelled to conclude that the objectives of the lease are not being met.
Gonsalves pointed out that the lease was assigned to CRD Holding Ltd. in 2010.
“Since September 2017, CRD Holding Ltd. has been owned 100% by companies ultimately controlled by you and controlled by your nominated directors,” he said in the letter to the Pignataro, whose real time net worth Forbes but at US$36.1 billion on Friday.
The prime minister told Pignataro that, without prejudice to the rights of the governments under the law to obtain a judgment confirming forfeiture of the lease, the Government of SVG was making “a formal offer to purchase the remaining leasehold land held under the lease for US$36.5 million”.
Gonsalves said that, for clarity, the valuation and offer pertain only to the leased portion of the lease.
“Freehold properties owned or operated by you or CRD Holding or its subsidiaries or affiliates, including the Mandarin Oriental Resort and the 15 parcels of land owned directly or indirectly by companies ultimately controlled by you or your nominated directors, are excluded from this valuation.”
The prime minister said his government “remains committed to resolving this matter equitably and amicably in the interest of the residents of Canouan, the employees of CRD Holding Ltd. and the people of St. Vincent and Grenadines.
“We are similarly open to constructive discussions concerning assets outside the leased area, as well as other properties to ongoing joint venture agreements between the government and entities under your control, including the Soho Beach House/Tamarind Beach Hotel site.”
Gonsalves told the investor that his government intends to resolve the matter in the swiftest possible manner and requested a response at Pignataro’s earliest convenience.’
The prime minister said that Pignataro responded through his lawyer, Lord Goldsmith, KC of the United Kingdom.
“He contested several things which I said, which we have a difference of views on the facts and also on the law.”
Gonsalves said that Lord Goldsmith had requested a meeting by Oct. 31.
“You can’t ask me to have a meeting on a matter this substantial and substantive within two days,” the prime minister said.
“I have appointed the director general of finance and planning and the solicitor general to offer Lord Goldsmith and the developers’ lawyers or technical persons to have a Zoom discussion on the 7th, Friday, Nov. 7. I have not been advised yet whether there has been a response to that communication.”
He reiterated that Canouan has not been generating revenue for the state coffers since 2017.
“… COVID in 2019, 2020, volcanic eruptions in 2021, Hurricane Elsa in July. And then, of course, there was Beryl [in 2020]. So, I gave a certain leeway because of all of those external factors.
“But I see no positive movement by the developers to address this question. So, as I said, regrettably, I have to conclude, apart from whatever the rights we have under the law, I am prepared to enter good faith discussions with you, and this is our valuation.”
He said the estimated value of the land came from an international property consultancy service.
“And I sent a copy of that valuation to him. I’m being open and transparent.”