Celebration scores $5b land deal for casino resort
A deal with the Urban Development Corporation (UDC) appears to have put Celebration Jamaica in a position to press ahead with its casino resort project, which is attempting to regain footing after breaching one of the conditions of its approval order back in May.
Neither party to the land transaction had responded to queries up to press time on the contours of the deal, but the sale of the 96.5 acres of Success lands to Celebration comes with a caveat - the price agreed is guaranteed only for one year.
It suggests the State may have doubts about the deal closing over the short term.
Celebration Jamaica is to pay state-owned UDC US$40.1 million for the property located in the Rose Hall belt outside of Montego Bay - and the government agency wants to be paid in hard currency, according to a release from the Office of the Prime Minister. The price is equivalent to just over $5 billion in domestic currency.
The Celebration casino resort project is the brainchild of Robert Trotta. The outfit was one of two approved to do casino projects, starting with the development of 1,000 rooms. Celebration should have broken ground on its first 1,000 rooms by May 15 of this year, but up to that point was still negotiating acquisition of property to site the project.
Referencing the Success property, a release on Cabinet deliberations this week said the 96.5 acres have "sold to Celebration Jamaica Limited for the establishment of what is characterised as an integrated resort development. This will include construction of a hotel complex, a casino resort and auxiliary facilities. It should be noted that this sale price holds with the caveat of completion of the sale within a year and further stipulates that the sum be paid in United States dollars."
The company is said to be in renegotiations with the Ministry of Finance on a revised integrated resort development order. Its unclear whether UDC would hand over the Success property to Celebration right away, and further what the land transaction means for new timelines for the project to launch.
Approved casino resort developers are required to develop at least 2,000 rooms in phases. Only after construction of the first 1,000 rooms is the integrated resort candidate qualified to apply for a casino licence from the Casino Gaming Commission.
The casinos are expected to be built in the second phase.
Celebration is expected to invest US$500 million in phase one of its project.
Back in June, Celebration Jamaica Development Limited told the Financial Gleaner that it applied to the Ministry of Finance for an extension of the provisional integrated resort development order.
Celebration Jamaica's acting CEO, Markus Deutsch, said then that they were still negotiating with UDC for the land. He said Celebration was targeting January 2017 to get the project rolling.
The finance ministry also said it was willing to be flexible.
Harmony Cove Limited, owned jointly by the Jamaican Government and private partner Tavistock Group, is also in breach of its provisional order. The project ought to have broken ground by July, but a market filing by the finance ministry suggests that the project will not get under way before the second quarter of 2017. Harmony's first-phase investment is estimated at around US$900 million to US$1 billion.
Requests for comment from Trotta, the Celebration Jamaica office and the general manager of the UDC on the land transaction were unanswered up to press time.