Palmyra listed for sale
Sabrina Gordon, Business Reporter
International marketing firm Racebrook has been hired by receiver Ken Tomlinson to sell The Palmyra Resort and Spa, which has been in receivership since last July.
John Cuticelli, the chief executive officer of Racebrook Marketing Concepts, said the sale will be done by way of a sealed bid auction on March 28.
The property is already being advertised for sale en bloc to potential investors.
"We will be offering this project in an international marketing campaign throughout the world, and not just in the Caribbean," said Cuticelli in an interview with Wednesday Business.
"It will be a blank project where someone can come in and really make it special and finish it the way they see fit," he said.
Started in 2005 by developer Robert Trotta, Palmyra is a partially completed 280-plus room boutique hotel/condominium complex encompassing three towers on 16 acres of beachfront land in Montego Bay.
The two condominium towers already built contains 200 luxury residences, of which 97 remain available for sale.
The shell of the third tower has been erected, but the 88 studio suites are still to be developed, as are the 11 three-bedroom villas, 12,000 square feet of banquet, conference and meeting facilities and a 30,000-square foot spa facility.
The villas, spa and banquet facilities are also in varying stages of construction.
The new investor is expected to complete the project - the estimated cost was not disclosed - but may expand the design, according to Cuticelli.
Advertisements for the auction were rolled out in Jamaica on Sunday and will next hit the Chinese press, as well as Malaysia, Russian and other European business journals starting today.
Cuticelli says finding a buyer could be challenging, given the size of the resort project.
"There are not a lot of buyers for this type of property, so that's why we have to go to the world in our marketing efforts," he said.
Trotta and his partners had planned to spend US$176 million on the resort, and at the takeover by his bankers and bondholders had poured US$100 million into the project, the developer has said.
Tomlinson declined comment on Palmyra's current indebtedness. The resort had principal debt of US$88 million arranged principally by National Commercial Bank and its wealth subsidiary, and a US$22-million loan from RBTT Bank Jamaica, now RBC Royal Bank Jamaica, at takeover.
Racebrook, a private investment firm specialising in real-estate deals, has been operating in Jamaica for a year now, having received a licence as a real-estate broker.
The American company says it has done transactions and advisory assignment deals internationally, individually ranging in value from US$3 million to US$1 billion on real-estate assets covering the full range of investment activities, such as deal sourcing, negotiation, investment, development, and disposition.
Cuticelli said Racebrook has received 97 contacts from interested parties in Palmrya.
"We will advertise in newspapers that reach throughout the world, our webpage will give interested parties the ability to communicate and register with the company - and give them everything they need to know to make the buying decision," he said.
Prospective investors must show they have the funds and capacity to complete the development. Cuticelli said the receiver and Palmyra's creditors and debenture will make a determination of the winning bid based on the price.
The sale is expected to be finalised 60 days after the bids are in, which places the deadline for closing the deal at the end of May.
In the meantime, Cuticelli said that current condo owners have been reassured that there will be minimal disruption to them.
"We have not had discussion with them directly but they have communicated with the trustee concerns and how to reconcile their position during this period. We have also sent our communication explaining what is happening and that there will be minimal disruption to them," said Cuticelli.
The trustee is a reference to receiver Ken Tomlinson.
"It's natural for anyone who owns property to be concerned because they want to know that if someone else comes in they will continue the same concept of what they bought into," said the dealmaker.
"I think the receivership has done its job in stabilising the property - keeping it so it doesn't deteriorate and allowing someone to come and complete it," he said.
Racebrook plans to position the resort's proximity to the airport and the hook of a gaming licence, as well as its downstream financial benefits, employment for the project and its expected expansion, as selling points.
"The pull of a potential gaming licence would assist this economy immensely with tourism," the Racebrook executive said.