The government of St. Vincent and the Grenadines has signed a US$100 million deal with a UK investor for the redevelopment of Palm Island, a privately-owned resort island in the Southern Grenadines that was devastated by Hurricane Beryl on July 1, 2024.
Speaking at the signing ceremony in Kingstown, Prime Minister Ralph Gonsalves said the investment agreement between the government and Palm Island Resorts Ltd. aims to totally redevelop and expand the Palm Island Resorts and spa and the Anchorage Yacht Club, in Union Island.
He said the value of the planned investment is US$100 million over 20 to 30 months and includes rebuilding the luxury five-star hotel on Palm Island.
The resort will include 34 freestanding hotel bungalows, 24 of which will be spacious one-bedroom suites, and 10 of which will be luxurious two-bedroom suites.
“And the company intends further to construct 31 private villas, three and four bedrooms — at least 93 keys,” Gonsalves said.
The rebuilt resort will include two restaurants, two swimming pools, a beach club, a kids’ club, a spa and fitness centre, atennis court, a yoga studio, and various aquatic activities.
Gonsalves said the redeveloped Anchorage Resort will be a high-standard, four-star bohemian luxury property with 30 to 40 rooms, a pool, a beach club, a restaurant and the reintroduction of the world-renowned kite surfing school.
The properties are projected to create over 200 full-time jobs and contribute significantly to the development of the economy of St. Vincent and the Grenadines, Gonsalves said.
During phase 1 of the construction, 100 and 150 people are expected to be employed, with the number increasing to between 150 to 200 during phases 2 and 3 of the works.
“The idea is to do a build-out phase one, have it operationalised while you build out the other phases,” the prime minister said.
“Once the resort is operationalised, it is required to procure locally produced agricultural foods and seafood from Vincentian farmers, fisherfolk and businesses, subject to the availability and quality required for a five-star luxury hotel resort.”
The resort is also required to give preference to buying all other inputs to the resort where available locally through local businesses, in adequate quantities and quality, subject to competitive prices, delivery timelines and other such criteria relevant to the feasibility of best construction practices
They are also required to give preference to qualified and experienced local contractors and suppliers of goods and services, subject to competitive prices, availability, mobilisation timelines and other criteria relevant to the feasibility and best construction practices.
Gonsalves said that to ensure that Vincentians are afforded employment opportunities at the resort during operations, the resort is required to provide to the government, within six month, a list of required skills for the construction of the resorts and villas.
It is also required to provide a list of required skills for the operations of the hotel within 12 months of the signing of the agreement on Monday, and to update that list from time to time.
He said the US$100 million investment increases the country’s hotel room stock and leads to an increase in demand for airlift and traffic through Argyle International Airport.
“This increased revenue strengthens the financial performance of this critical transformative infrastructure — the AIA,” Gonsalves said.
He also spoke of the taxes to be collected during operation, including VAT on accommodation and food and beverage, the climate resilience levy and PAYE taxes paid by the employees at both facilities.
“The development of the Palm Island Resort and Spa and the Anchorage Resort will contribute to the revitalisation of the economy in the Southern Grenadines, and by extension, the entire domestic economy, local businesses, business owners will also benefit from the increased spending power of the workers who will be employed at the resort.”
Gonsalves said the government is providing 100% duty-free concessions on construction material and equipment during the construction phase, adding that this is normal.
The investors will also be offered 100% duty-free concession during the operating phase, and all items required for the running of a five-star resort, including a 15-year tax holiday under the Hotel Aids Act, after which 50% of the going rate will be paid for five years.
Thereafter, the full rate of income tax would be applicable.
“So, we are facilitating with concessions to get this investment of 100 million,” Gonsalves said.
“Now we don’t facilitate with concessions, we wouldn’t have the investment, we wouldn’t have the workers being employed during the construction phase, and we wouldn’t have the 200 full-time employees, and we wouldn’t have all the requisite spin-offs with farmers and fisherfolk and local businesses.”
He said this is the reason for the incentive regime.
“There are some people who think that you could attract significant capital without giving concessions. They’re living in dreamland. They’re not realistic people. These concessions are really par for the course all throughout the Caribbean,” he said.
Meanwhile, the investor, Zachary Bayman, said the work done to rebuild the Grenadines after Hurricane Beryl has been “truly awe-inspiring”.
“And I think this speaks to the resilience of the Vincentian people in the spirit of the Grenadines, and is proof that where there is hope and determination, miracles can happen.
“This remarkable recovery across the region from critical infrastructure to schools and hospitals, restorations of homes and livelihoods, is a true reflection of your leadership, Mr. Prime Minister, and I understand also the strength of the Vincentian people and the efforts of many dedicated partners, including my new friend, Mr. Ian Wace,” he said.
He said the arrival of Voaara Resort and the luxury residences will only strengthen the Grenadines’ place as one of the world’s most sought-after destinations.
“We do not take the stewardship of Palm Island lightly. We are deeply humbled to be entrusted with bringing new life to this extraordinary place, and we are committed to doing it with care, purpose and respect for its legacy,” Bayman said.
He said the revival of Palm Island will extend far beyond its shores, delivering lasting benefits to the surrounding communities in the wider region for years to come.
“The resort and residences are being built with the utmost care for the environment, in consideration for not only today’s but also tomorrow’s climate,” Bayman said.