Puerto Seco lease: the real facts
THE EDITOR, Sir:
The Jamaica Bauxite Mining Limited (JBM) has been at a loss as to the assertions put forward by Dr Carolyn Cooper in an August 5, 2008, article regarding the lease of its Puerto Seco property in Discovery Bay, St Ann, to the Guardsman Group - particularly to the assertions of collusive practice. Dr Cooper makes reference to a licence and a lease but used the terms interchangeably. To be frank, the differences between a licence and a lease are quite distinctive, as a licence is a government regulatory instrument.
Puerto Seco is a leasehold property, held by Guardsman Group Limited, for amounts separate and apart from licensing and permit fees paid to NEPA under the Beach Control Regulations, a fact Dr Cooper would have been made aware of had she followed the advice given to her by Peter Knight, head of NEPA, to contact JBM's managing director for details about the lease. This would have prevented the publication of misinformation.
The JBM is committed to protecting and conserving public asset value and must make prudent business decisions in the interest of the company, the people and the Government of Jamaica. Our contribution to achieving Jamaica's Vision 2030 goals has been our major driver as we seek to responsibly engage stakeholders to develop and redevelop our properties in an efficient manner.
Historically, Puerto Seco Beach has not been a free public beach. It was owned by a private company, Kaiser, and then acquired by the JBM. Under JBM's ownership, the beach was first operated by the Urban Development Corporation, then by private investors. A local resident was the last lessee for 11 years.
Transformation badly needed
JBM saw the need to engage a lessee that would be able to transform this world-class facility into an attractive profitable one, as it has never been profitable, and was existing below its potential as an attraction on the north coast.
The truth of the matter is that an invitation to submit proposals for a redevelopment lease was advertised in The Gleaner on August 21, 2015, and the Guardsman Group had the most desirable plan. The process was reviewed by the contractor general, who found the process to be in order. JBM is a self-sustaining, limited-liability company, with no financial support from the Government, so must make use of its assets to sustain itself and maintain viability.
The lease amounts for Puerto Seco vary from a basic fee of $2 million per year for the first three years, after which the lease amount is calculated based on property value. After the first three years, it begins with three per cent of the US$ value of the unimproved land per year, increases to four per cent for the next 10 years; and then to five per cent towards the end of the lease.
The unimproved value in 2015 was J$219 million. Since the lease fee is linked to the United States dollar, the Jamaican dollar value of the lease will increase with devaluation and with the increase in value of the property.
Jamaica Bauxite Mining Ltd