Lights out at Palmyra

Published: Sunday | February 10, 2013 Comments 0

Janet Silvera, Senior Gleaner Writer

WESTERN BUREAU:A number of homeowners and tenants of the Palmyra Resort & Spa, Montego Bay, have been forced to vacate the premises because of a refusal by the property's overseers to continue funding increasing maintenance costs.

The receiver has already curtailed access to electricity to a few hours each day.

Sunday Business understands that at least one of the two banks that own the property has stopped providing funding towards the operation of the power plant at the resort.

The property was placed in receivership by National Commercial Bank Jamaica (NCB) and RBC Royal Bank Jamaica.

Electricity at the property is costing in excess of US$140,000 per month, sources close to the resort have said. The property has its own power plant and was supposed to be self-sufficient.

Overall, the two banks, RBC and NCB, spend US$450,000 to maintain the property which went into receivership on July 2011.

The operation of the property, said the source had impacted badly on the bottom line of both entities. "Insurance alone is US$220,000 per month," said the source.

The occupants were given a four-day notice to move out by Saturday, February 9.

irked occupants

The short eviction notice has irked occupants, about 20 to 30 homeowners and tenants, who were advised by the property's receiver Ken Tomlinson on February 5.

"There is absolutely no basis in law or in equity for the outrageous decision to constructively evict all of the residents at Palmyra with only 4 DAYS' NOTICE," said one homeowner, attorney-at-law Tiffany Hamilton, in a letter to the receiver.

She noted that the blame could simply not be RBC's only.

Hamilton said the receiver and his team must have foreseen the possibility of discontinued funding by the bank, but obviously did little to prevent it, failing to inform residents that eviction was a strong possibility.

"Instead, you (Tomlinson) waited until the 11th hour, and then gave residents four days' notice to abandon the apartments that they lawfully own or rent. The law affords even illegal hold over tenants a longer notice period! And for lawful owners, this situation is unheard of," Hamilton wrote.

The 299-room property, which generates its own electricity from a private power plant, 'Caribbean Green Power', has been experiencing electrical outages daily for the last two months. Caribbean Green Power is also in receivership.

In a letter from Tomlinson to the homeowners, dated December 31, 2012, they were told that effective January 1, 2013, electricity would be curtailed.

"This curtailment will be for 10 hours daily in the first instance, and has come about because Caribbean Green Power Systems Limited (In Receivership) as of December 31, 2012, is in deficit (approximately US$61,000) in respect to its financial obligations to IGL, the supplier of fuel to the power plant."

The hours of shutdown were from 12:30 am to 5:30 am and 12:30 pm to 5:30 pm daily.

The resort was not wired to take electricity from the Jamaica Public Service Company. Connection to JPS power grid at this stage would cost about US$3 million.

In the meantime, at least two prospective buyers were scheduled to visit the property last week with the intention to purchase the development.

NCB and RBC Royal Bank took over the property claiming that the Palmyra developers had defaulted on two loans, and appointed Tomlinson as receiver/manager. The loans amounted to US$110 million.

The developers deny the breach and last month filed suit against the banks.

janet.silvera@gleanerjm.com


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