Four vie for casino resorts

Published: Sunday | December 8, 2013 Comments 0

Correction & Clarification

In the article titled 'Four vie for casino resorts', published December 8, 2013, Amterra's beach was described as 3.5 acres in size. It is 3.5 miles.

We regret the error

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Avia Collinder, Business Reporter

The Ministry of Finance has received four bids for Integrated Resort Development (IRD) projects, otherwise called casino resort developments, that were opened Friday, marking the start of a selection process in which a maximum three proposals can be selected.

Only one of the four, however, presented the full application fee which amounts to almost J$16 million at the bid openings.

An approved IRD by the minister is a precursor to the granting of a casino licence under the Casino Gaming Act. Three licences are prescribed in the legislation.

Bids were submitted by Casino Royale Limited whose development is proposed for Drax Hall Estate in St Ann; Amaterra Jamaica Limited; Celebration Jamaica Limited, and Harmony Cove Limited.

The investors behind the four bids are: Phillip Reynolds and Richard Salm - Casino Royale and Drax Hall Limited, respectively; Jamaican developer Keith Russell and American partner Charles Murphy III of Arkansas - Amaterra Jamaica; Robert Trotta - Celebration Jamaica; and state-owned Harmonisation Limited and Tavistock Group - Harmony Cove.

All bids had the required documentation, but only one, Harmony Cove Limited, presented a cheque with the full non-refundable application fee of US$150,000 (J$15.75 million).

Bid representatives for the other companies gave various reasons for the absence of the fee. Trotta of Celebration Jamaica said by way of a letter included in the bid that the fee was already paid to the Ministry of Finance in the spring of 2008. The letter was read aloud at the meeting on Friday.

Amaterra Limited paid US$22,500, representing 15 per cent of the fee. Amaterra presented "a letter of undertaking from our lawyer to pay the balance," Russell told Sunday Business.

"We had sent questions in July and August and they had not responded. At the briefing session they showed us we could have a meeting with them. We are seeking an urgent meeting with them," he said.

It was unclear whether the absence of the fee was sufficient to derail a bid. The Finance Ministry had not up to press time answered the query.

Salm of Drax Hall said he advised the ministry before the meeting to open bids that the application fee would be paid by December 15.

Sunday Business was unable to make contact with the representative of Robert Trotta of Celebration Jamaica. Companies Office records list Trotta and Deutsch Franz, an Australian national living in the United States, as directors of the company.

The Finance Ministry's representative at the bid opening said the information would be verified later; and that Friday's meeting for opening of bids was merely the documentation phase in which the contents of all bids were duly noted.

A representative of the office of the Contractor General explained that the public process was held for reasons of transparency, although Requests for Proposals (RFPs) did not involve a tender or a procurement procedure.

Salm said after the meeting that he and his partner already have a commitment for US$500 million of the estimated US$1.5 billion required for the development.

"We are in negotiations for the remainder," he said.

Regarding the details of the Casino Royale proposal and the Drax Hall development, Salm said: "We have one section designated for a large casino hotel, 16 acres for a shopping complex, and areas designated for time share, individual villa lots, middle-income housing and a possible marina."

Russell of Amaterra said his project spans 850 acres in Duncans, Trelawny, including 3.5 acres of beach, and has already secured approvals for development.

"We have sub-division approval, beach development approval, and we are approved for a 2,200 room hotel and golf course. It is the only project that has all approvals," he said.

CEO of Harmonisation, Dr Lorna Simmonds, declined comment Friday,

but it is known that the project is slated for 2,200 acres of land in Trelawny. The first phase of Harmony Cove will include development of a 1,000-room hotel, a championship golf course and casino facilities. The cost for that phase was last estimated at US$900 million.

The casino resort projects aim to further diversify the tourism sector's product offerings.

The developments must include at least 2,000 rooms, of which 1,000 must be built before the casino licence can be issued. Investors are also required to demonstrate that they have access to land to develop the resort complex and adequate capital.

The mega-developments fall under the Casino Gaming (Application for Declaration of Approved Integrated Resort Development) Regulations 2012 and the Casino Gaming (Prescribed Games) Regulations 2012.

The ministry says it will next conduct due diligence on the bids which the application fees are meant to fund.

For the projects that are approved by the ministry, development orders will be issued for the resorts. This allows developers to apply for a casino licence from the Casino Gaming Commission.

Government has promised "exclusivity" to winning bidders, which is essentially a buffer zone within which no competing casino can be developed.

avia.collinder@gleanerjm.com

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