The principals of Elite Island Resorts are having another go at managing the Jolly Beach Resort (JBR), after a July 7 report said they had withdrawn the interest they expressed in May.
Now, according to the October 5 Cabinet Notes, the local hotel chain owner, Rob Barrett, has been asked to manage the resort after it has been refurbished.
Last weekend, Prime Minister Gaston Browne announced that the Government is close to completing the purchase of the defunct hotel, and this transaction should be completed by the end of this week.
The caution on the hotel – which the Government had expected would take two years to have removed – was recently lifted by the Republic Bank of Trinidad & Tobago, clearing the way for its sale and for the paying of severance to hundreds of former Jolly Beach Resort workers.
No details have been given on the source of funds for the purchase of the resort; but the Notes claim that the property is valued at more than $30 million.
Meanwhile, according to a document now being circulated via social media – and confirmed by a Ministry of Finance source as “authentic” – the Government had sought to enter into an agreement with another company – reportedly also owned by the Elite Island Resorts principals.
That agreement, which was to be signed by September 23, refers to a loan from that company, of US$6 million, to the government agency known as NAMCO. The loan is for the refurbishment of the Jolly Beach property and is be disbursed by the company, itself, while undertaking the reconstruction project.
However, this week’s Notes make no reference to this agreement.
What they do say, however, is that Government’s objective is to have “several rooms” rehabilitated for the 2022 winter tourism season and to have Elite Island Resorts manage the facility for up to five years.
During its management tenure, Elite Island Resorts will also market the Jolly Beach property and share the profits with the Government, the Notes add.
The unaddressed agreement, meanwhile, details the profit-sharing arrangement with the other company, guaranteeing tax-exempt status on its share of the gross revenues.
It also lays out a number of concessions to that company, including a 50% reduction in corporate income tax – for all businesses in which its principals have an ownership interest.
This reduction will be in effect for 15 years and is to be made irrevocable by the Cabinet, the document states.
Should NAMCO, the borrower, terminate the agreement, the document adds, then a penalty of US$3 million will automatically be levied against the Government – separate and apart from the interest payments.
Free weekly trucking services, provided by the Government for six months, sweeten that deal even further.
While Tourism Minister Charles “Max” Fernandez has said that Elite Island Resorts drove a hard bargain, no details of the deal have been disclosed to the public, leading several business owners to ask what the Browne Administration is hiding.
In the meantime, George Wehner, the United Progressive Party’s Mobilization Officer, is concerned that a Cabinet member who is allegedly a member of the lender’s board of directors, and who also sits on the board of NAMCO, could have been allowed to be part of the negotiations.
Wehner says the unaddressed agreement is a bad deal for the taxpayers’ of this country, and the only positive outcome of the sale is that it provides severance to the former hotel workers.
Since Elite Island Resorts’ withdrew its expression of interest in May – after a planned reopening at year-end with fewer rooms –
the Cabinet said that Government would purchase the property and turn it over to Apple Vacations to manage.
Browne gave an October deadline for completion, and then, in early September, the timeline was pushed back to December.