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Hotel deal said to weigh on Doctor's Cave Beach access fee

Published:Friday | September 19, 2014 | 9:00 AM
File Doctor's Cave Beach in Montego Bay.

Avia Collinder, Business Reporter

John McDonald, general manager of the Doctor's Cave Beach Club, says the concerns raised by owners of the former Breezes hotel and the property's prospective buyer that previously high access charges will be reinstated are unfounded.

Doctor's Cave is the most popular beach on the Gloucester Avenue strip. It adjoins the hotel.

"We have met with their representatives and have offered to them a price well below what we charged," said McDonald, adding that the offer was based on the possible number of guests, among other factors.

McDonald, who has been at the property for 15 years, said that while former hotel operators SuperClubs had paid US$10,000 monthly, the owners were now being offered US$6,250.

This rate, he said, was a counter-offer to a proposed monthly fee of US$3,300 made by the potential buyer and representatives from current owner Resorts Beach Development Limited.

Resorts Beach Development, whose shareholders are National Insurance Fund (NIF) and NCB Pension Fund, has a preliminary agreement with an undisclosed overseas entity for the sale of the 124-room property.

The sale is expected to close in October after a 45-day due diligence process.

Another interested buyer

However, the Financial Gleaner has been advised by a well-placed source that were the deal to fall through, there is another interested buyer in the wings.

The seaside property was built in 1995. NCB Pension Fund owns 51 per cent, while NIF holds 49 per cent. SuperClubs stopped managing the hotel in 2009, and its pension fund owners have been trying to sell the asset since 2011. One offer from a local hotelier fell through in 2012.

The source said the pension fund owners fear the beach fee could derail the current deal and other prospective buyers.

"The light at the end of the tunnel may be dimmed, and what was thought to be the light of a pending sale of the former Breezes Montego Bay may be the headlight of an oncoming train," the person said.

While Doctor's Cave is government-owned, the property is leased by the Doctor's Cave Beach Club Limited at a reported rate of $50 per year.

McDonald said the cost of the lease was set by the parish council many years ago when the beach was undeveloped, and since then the beach club, which is run by trustees, have spent their own funds to build up the beach.

The current agreement will expire in 2045.

"We built a new clubhouse, a beach bar and a food court," he said, noting that the charges made for access are needed for overall maintenance, for utility bills and to file annual returns. He added that any surplus earned was spent on education and other charitable projects of the beach club.

McDonald has indicated that Doctor's Cave is unlikely to cut the beach access fee any further.

He said the US$6,250 monthly charge on the table is a reasonable compromise, and that it would give the hotel exclusive use of a section of the beach for water sports activities.

avia.collinder@gleanerjm.com