Another blow for former Breezes Montego Bay hotel sale
The National Insurance Fund (NIF) and NCB Pension Fund are preparing to extend their search for a buyer of the former Breezes Montego Bay hotel, having failed to reach a deal with the latest suitor.
A sales agreement appeared to be in the cards up to last summer, but the year ended without a deal for the 124-room property.
At the time, they had indicated that beach fees to be applied by a third party was a sticking point for the transaction.
Senior director of investments for NIF, Audrey Deer-Williams, said Tuesday that other offers are being considered following the failure of the prospect to take his offer to the point of a concluded agreement. She did not name the former prospect.
The pensions funds own the hotel through Resorts Beach Development Limited (RBDL). The property's last valuation was reported as US$14.32 million (J$1.7 billion), which is some J$500 million more than in 2011 when it was first placed on the market.
"We are evaluating other proposals which came in after the exclusive period ended," Deer-Williams said. "Based on where we are, we still can't disclose this information."
At one point, charges by Doctor's Cave Beach Club for use of its beach facilities were highlighted as problematic for the last prospect. The buyer of the property would have had to pay a fee for access for its guests, and reportedly baulked at the US$6,250 monthly rate quoted by the beach club operators.
At the time, the general manager of Doctor's Cave Beach Club, John McDonald, said the fee quoted was a discount on the US$10,000 per month paid by the hotel's former operator and a counter-offer to the US$3,300 proposed by the prospective buyer and RBDL representatives.
Now, however, the cost of refurbishing the property seems to be providing a challenge.
Asked to comment on what might have been the sticking point affecting the sale, Deer-Williams said: "The asking price and the cost of renovation are always going to be challenging points of negotiation, regardless of who makes the offer."
The hotel was managed by SuperClubs, owner of the Breezes brand, up to its closure in September 2009.
In 2012, an offer was made for the property by Chris Issa, owner of the Spanish Court Hotel in Kingston, but that deal fell through.