Mon | Aug 21, 2017

More delays for casino resort

Published:Sunday | April 9, 2017 | 4:00 AMMcPherse Thompson
Finance Minister Audley Shaw
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Celebration Jamaica missed its last revised and aspirational deadline in January to launch its casino resort project, but now, the finance ministry is saying the development is likely to get under way in two to three months.

The situation with Harmony Cove, for which the Jamaican Government is chasing Chinese capital, is less certain.

The Ministry of Finance, which is required to approve the master plans of casino resort developers, had initially signed off on mid-2016 start dates for both projects to break ground, under provisional development orders that were gazetted.

But neither investor met those deadlines, forcing them back to the table. Celebration, which initially had a May 2016 deadline, had said a month after the date elapsed that it was hoping to start in January 2017.

Now, having reached out to Finance Minister Audley Shaw for updates, his ministry tells Gleaner Business that Celebration's project is expected to get under way in June and that it is currently reviewing a proposal from Harmony Cove Limited - a partnership of state-owned Harmonisation Limited and Tavistock Group - for sign-off.

The first phase

of the Celebration megaresort is to be completed by mid-February 2020.

Attempts at an update from Celebration Jamaica's acting CEO Markus Deutsch, to whom Gleaner Business was referred, were unsuccessful.

However, last June, he said financing for the project, estimated at US$500 million in the first round, had been secured for some time, although he declined to disclose the backers.

One of the hold-ups for Celebration had been access to land, but that hurdle was cleared last July when the developer struck a US$40.1 million deal with the Urban Development Corporation to acquire 96.5 acres of a property known as Success, located in the Rose Hall belt outside of Montego Bay.

FINANCING UNCLEAR

The status of Harmony Cove's financing remains unclear. The first phase of that project was last estimated at around US$1 billion. Harmonisation has been chasing deals with the Chinese entities, previously reported to be China Exim Bank and Sinohydro Corporation, but efforts at an update from Executive Director Dr Lorna Simmonds were not fruitful.

Simmonds eventually invoked the Access to Information Act, saying she would respond in two weeks.

As to whether the Jamaican company has requested an extension of the provisional order, the Ministry of Finance said: "Harmonisation has indicated that this is forthcoming."

According to the latest Public Bodies report produced by the Ministry of Finance, Harmonisation's development construction of the integrated resort is expected to begin during this fiscal year.

It also revealed that Harmonisation expects to divest some of the assets in its wholly owned resort rental accommodation outfit, Silver Sands Estates Limited, in an effort to reduce its overall costs.

DIVESTMENT APPROVED

The report said shareholders of the Harmonisation Group, which include the Development Bank of Jamaica (DBJ) and the National Housing Trust, have approved the proposed divestment. The DBJ will handle the disposal as an agent of the Government of Jamaica.

Celebration Jamaica and Harmonisation are the only two candidates approved to develop integrated resorts, a process that requires the developers to build 2,000 or more hotel rooms - at least 1,000 in the first round - and a casino. The law allows for no more than three licences to be issued.

Celebration has partnered with Celebration Casino Corp of Canada to develop the casino for the resort complex, conceived a decade ago by businessman and developer Robert Trotta. Alongside the hotels, the complex will eventually feature a casino, a music studio, a theatre capable of seating 1,200 persons, as well as a banquet hall.

The Harmony Cove resort, to be developed in Trelawny, will feature hotels, a casino, golf courses, a luxury spa, marina facilities, convention and entertainment centres, and hotels.

The efforts to launch the casino projects have been ongoing since 2014.

mcpherse.thompson@gleanerjm.com