More casino confusion - Fiesta denies bidding; reveals joint-venture talks with Amaterra
Published:Wednesday | April 23, 2014 | 12:00 AM
Avia Collinder, Business Reporter
Fiesta Jamaica Limited and developers Amaterra Jamaica Limited are exploring a potential casino resort partnership amid confusion on whether the Spanish hotel group had, in fact, put in its own bid for a so-called Approved Integrated Resort Development order, or AIRD.
The Ministry of Finance said the hotel group submitted a bid, but Dimitris Kosvogiannis, the country manager of Palladium Resorts and Fiesta Jamaica Limited, told Wednesday Business that the company had not.
The documentation delivered to the ministry last November, a day ahead of the bid deadline, said Kosvogiannis, was merely a proposal on how to improve the casino law passed four years in 2010.
Fiesta believes the 2,000-room condition attached to the licence is an over-the-top requirement, and that investor capital is unnecessarily exposed without real guarantee of landing a casino licence that requires a commitment of no less than US$1.2 billion of spend.
"The Palladium hotel group is not in the habit of submitting applications which are half-done without paying the fees. What we have done is we have challenged the law as [being] against public policy, and on constitutional grounds, to force the Government to re-examine and change the law in an effort to make it viable - not only for us, but for other investors," he said.
INFORMATION ERRONEOUS
"The information you received is erroneous. Fiesta has not submitted an application for casino licence or AIRD. What we have done is challenge the ministry to re-examine the law."
The finance ministry, however, is holding to its position.
"As indicated by the minister in Parliament, the ministry received an application from Fiesta Jamaica Limited," the ministry reiterated via email, when asked to clarify the issue.
Kosvogiannis also revealed that Fiesta was in discussions with Keith Russell and his partners in Amaterra Jamaica - the latter has put in a casino resort bid and is attempting to finalise financing - on a possible joint venture on the casino complex that Amaterra proposes to develop in Trelawny.
Amaterra consultant, Joy Douglas, confirmed the talks were in progress with Fiesta. She said the Spanish hotel group told Amaterra that it had not put in a casino resort bid.
Douglas said the talks are "very preliminary", but would be mutually beneficial for both properties". Amaterra's landholdings are in Trelawny, while the Fiesta resort alluded to is located two parishes away in Hanover.
Kosvogiannis also said Fiesta was willing to acquire lands now owned by Harmony Cove Limited, as he was convinced the Jamaican Government did not have the money to develop an integrated resort.
Harmony Cove is a project of state-owned Harmonisation Limited and Tavistock Group.
The resort, with hotels, a casino, private villas, entertainment facilities, a marina and golf course, was initially unveiled by the Government more than a decade ago. The project has now secured Chinese backing, through a new partner said to be Sinohydro Corporation Limited.
The Harmony Cove resort will be developed on a 2,230-acre property in Trelawny. The first phase of the project was last estimated to cost US$900 million.
An AIRD order will qualify investors to apply for a casino licence from the Casino Commission, of which only three are up for grabs. But there are at least four bids on the table. The finance ministry says Fiesta's proposal makes five.
It first spoke of the Fiesta bid on April 10, four months after the AIRD tender deadline and official bid opening, saying the proposal was improperly addressed and had gone astray within the ministry.
The ministry said the attorney general was asked to weigh in on whether the proposal would still qualify for review - a legal opinion that now appears moot, given Fiesta's denial that it had put in a bid.
The other four bids are from Amaterra, Harmony Cove, Casino Royale and Celebration Jamaica.
Kosvogiannis, while saying that Fiesta has been lobbying for a casino licence for at least eight years, notes that the documents were about changing the existing law, which would require him to add 2,000 new rooms.
He also revealed that the Palladium group was currently in discussion with the government of Barbados regarding the opening of hotels with a casino component, even while noting that the hotel group remained "passionately" interested in Jamaica.
Fiesta is a subsidiary of the Palladium Hotel Group, which covers eight brands and 48 hotel properties worldwide and is owned by the Matutes Group of Companies.
Locally, there are two Grand Palladium properties, both located at Point in Hanover, which account for a combined 1,056 rooms.