Ocean’s Edge delay under investigation
Billed as a panoramic, ocean-view, luxury development, Ocean’s Edge should have been on the market from October 2021, but it’s currently on pause, and the delays and missed deadlines have left investors fuming. Andrew James, chairman of the Real...
Billed as a panoramic, ocean-view, luxury development, Ocean’s Edge should have been on the market from October 2021, but it’s currently on pause, and the delays and missed deadlines have left investors fuming.
Andrew James, chairman of the Real Estate Board of Jamaica, says the regulatory agency is aware of the disgruntlement and carrying out investigations.
James said a more formal response would be prepared, but none has been forthcoming.
The REB polices residential developments to ensure that the interests of buyers are safeguarded in cases where deposits on purchases have been made.
The pre-construction prices for the villas began at US$495,000. All units were reportedly sold out.
One depositor, who requested anonymity, said they deposited US$50,000 in October 2020 on a unit valued at just over US$500,000, and is furious at having got no indication as to when the the project would be completed.
“Initial handover should have been 2021,” the person said. “We all know that COVID happened and supply chain delays occurred, etc etc, etc,” they added in mounting frustration.
“But respect is due to depositors on units. An updated forecast of completion is long overdue,” the depositor said.
The Ocean’s Edge Country Club is being developed by Genesis Construction Company with backing from start-up business Sygnus Real Estate Finance, SRF, a member of the Sygnus Group. At its announcement three years ago, the development, comprising 16 luxury villas, was estimated to cost US$4.2 million.
In January 2022, Sygnus Real Estate said in an update that the project was 80 per cent complete and that the targeted delivery date had been adjusted to March/April 2022.
But then in April of this year, the company disclosed that the former contractor was no longer associated with the project. However, no reason was given for the unusual event.
Sygnus Real Estate CEO David Cummings said on an earnings call that the project was then “in the process of identifying another contractor, since the other contractor had demobilised”.
Demobilisation is where a contractor removes all equipment and resources from a construction site under its management. Industry experts say it can occur at the end of the project, which can technically be defined as more than 80 or 90 per cent complete depending on the contract terms, or when there is disagreement.
The Ocean Edge contractor, Garco Construction, confirmed to the Financial Gleaner that it had demobilised but was cagey on the specifics.
Garco principal Rohan Grant merely asserted that he was standing by his record as a contractor for the last 24 years. Grant also said his company had disengaged from the project as far back as October 2022.
“There was a period of eight to ten months that I was never paid,” he charged.
Sygnus Group declined to comment on the fallout.
Sygnus Chief Investment Officer Jason Morris said SRF was constrained by how much it could say at this time, citing potential breaches of non-disclosure agreements linked to its role as a financier of the project.
Morris asserted that SRF’s participation in Ocean Edge was that of a debt investor only, and was not a partner in the development. As such, he said, questions about the demobilisation were best directed to the developer.
However, messages to Genesis Construction principal Norma Clarke remain unanswered. Clarke was last said this week to be off the island until the end of June.
Morris, in his assessment of the status of the project, said it was stalled, while referencing challenges linked to the pandemic and supply chain disruptions, but noted that the developer was searching for a solution.
“The developer is working through the issues to find a solution to get the project on a path to completion,” he said.
“It’s no different from what has obtained for almost every project started over the last two years in Jamaica.”
Regarding those who would have invested in the acquisition of the villas, Morris said it was standard procedure for such money to be held in escrow to protect the interests of depositors.