Sun | Dec 4, 2016

Palmyra deal fizzles

Published:Sunday | August 17, 2014 | 12:00 AM

Avia Collinder, Business Reporter

The offer by Philangco Corp for the purchase of Palmyra resort and condominium complex has fizzled, with receiver Ken Tomlinson who was hired to dispose of the property saying that he is now entertaining new interests from both within Jamaica and abroad.

Sunday Business has learned that former hotel manager and tourism industry veteran Lionel Reid is acting as coordinator for a group of investors, comprising Jamaican and overseas interests. Reid said it was too early to comment on the group's plans.

Earlier this year, Philangco Corporation submitted an offer for the Palmyra condominium complex - an incomplete development started by Robert Trotta and partners, but which was placed in receivership by its bankers close to three years ago.

Principals in Philangco are Tanya Morgan-Porter of Fairfield, Montego Bay, and developer and CEO Phillip Scott of New York.

Sunday Business understands that the offer made for the property was US$60 million, with another US$60 million to be used for a first phase of development of the property.

Financing for the project was being sought from banks based in Jamaica and the United States.

However, last Thursday, Sunday Business was reliably informed that principals in Philangco have withdrawn their offer.

Attempt to reach both Scott and Morgan-Porter for comment were not successful.

Former banker Dunbar McFarlane, and former chief financial officer for Philangco, confirmed that he withdrew from the project four months ago in April. McFarlane said he was unable to comment on why the project has fizzled.

Palmyra Resort & Spa currently sits on 16 acres at Rose Hall. The complex encompasses three towers, two of which were completed. The development was taken over by its bankers and placed in receivership in 2011.

FALLEN INTO ARREARS

The owners of the project are alleged to have fallen into arrears on US$110 million of principal loans, US$22 million of which was financed by RBC Royal Bank Jamaica, while the other US$88 million is held by National Commercial Bank Jamaica and its investment arm, NCB Capital Markets, as well as bondholders.

The original owner, Robert Trotta, is fighting the takeover in court.

The development has 103 owners of individual condos, with 97 units remaining for sale on the completed blocks, known as the Sabal Tower and Silver Tower. The shell of a high-rise hotel, designed for 88 studio suites, called Sentry Tower, and 11 three-bedroom villas are at varying stages of completion.

Previous efforts to sell Palmyra at auction in 2012 were unsuccessful, with reports then saying the property was pulled from the block, having got no viable offer. Later, a Mexican company was also said to be interested, but that lead also appeared to have fizzled.

Tomlinson said he had no further comment on new offers and their source, saying nothing has been "tied down" to date.

avia.collinder@gleanerjm.com