Administration looking for private investors in Paradise Beach resort

The Barbados Government has decided to stand down from a stalled private sector tourism project in which it had invested some $120 million in taxpayers’ money to ensure the cash-starved upscale venture got off the ground.

Minister in the Ministry of Finance Ryan Straughn said on Friday that instead, that role would be turned over to the private sector to avoid spending any more taxpayers’ money on bailing out private undertakings.

Straughn told VOB’s Down To Brass Tacks talk show audience that his administration was looking for private sector interests to take up the Four Seasons luxury hotel and villas project on the site of the former Paradise Beach Hotel at Walmer Lodge, Black Rock, St Michael.

He admitted that taxpayers’ money was used to guarantee a loan from Ansa Merchant Bank for one of the hotel owners – Paradise Beach – with the land as a swapped asset.

However, he conceded that there were some accounting errors on Government’s books in which the $120 million liability was not entered as a debt.

He said that the government therefore wrote off the money as a corrective measure as the debt had already been paid.

“When we came to office…the guarantee having been paid, the accounting had not been resolved to swap the assets on the books with respect to it. Because, effectively what we were doing was saying that we had this liability of $120 million which we had already discharged. The land is ours.

“We have been trying to get the project revived which we were working towards throughout 2019 and we were close to a solution early in 2020. And as we had anticipated as part of getting that matter back on track, obviously COVID hit in the first quarter of 2020 and therefore circumstances changed with respect to the prospective investment,” the minister stated.

“As it stands right now, there is no positive movement that I can report to the country in relation to the development of Four Seasons down Black Rock given that COVID has been the intervening factor as it relates to us and that matter,” Straughn told the radio audience.

“On the face of it, the government owns the land because it effectively discharged the guarantee; and therefore the government owns the land and we have been working to find a solution that would involve a private entity actually executing the project as opposed to the government…because it is really a private sector project,” he pointed out.

Construction on the US$600 million Four Seasons project, which was to see a 110-room hotel and 35 private villas being built, ground to a halt in 2009 after the original developers ran out of money.

The project began running into difficulties in late 2008 when more than half of the villas, priced between $11-$18 million, remained unsold and buyers who had made deposits of between ten per cent and 40 per cent made no further payments.

Among the prominent buyers which the villas attracted were composer Andrew Lloyd Webber, Formula One team owner Eddie Jordan and Simon Cowell, whose villa was to span two plots and cost $32 million.

Back in October 2019, Prime Minister Mia Mottley told her Barbados Labour Party 81st Annual General Conference at Queen’s Park that Attorney General Dale Marshall and Government’s financial advisor Professor Avinash Persuad, had already made contact with new potential developers to get the project going again.

“Only yesterday the Attorney General and Professor Persaud concluded with the directors of Clearwater, which is a Government company, to settle a letter of intent for the Morse family, a large set of investors out of the US, for them to be able to take over the property at Paradise and build a five or six-star luxury hotel over the course of the next two to three years.

“The last government left it to rot and rust and taxpayers put more than $120 million into it, but your Government has now agreed to have that kept whole. The Government, on conclusion and transfer of the property will receive $40 million in cash and the other $84.5 million will be kept in preference shares so that we will be paid money before the owners get a single cent,” Mottley declared. (emmanueljoseph@barbadostoday.bb)