Friday, September 24, 2010
Black Bess Saga Revisited
"One of the largest developments planned for Barbados is
in limbo and searching for a buyer.
An alliance of real estate companies in Barbados, the
United Kingdom and British Virgin Islands (BVI) has for the
past several months been hunting someone with deep enough
pockets to purchase the property earmarked for a more than
half billion dollar golf and residential resort at Black Bess, St.
Peter, but has been stalled for over a year now, with nothing
beyond massive excavation work having taken place.
Local company, Realtors Limited, its BVI counterpart
Smith Gore and the latter’s London affiliate SG Commercial
LLP, are trying to sell the 247 acre site, which has planning
permission for a hotel and spa complex with up to 100
rooms, an 18-hole golf course and up to 200 residential units.
“The site originally known as Black Bess Plantation, has a
superb hilltop location with magnificent views of the famous
platinum coast and Caribbean Sea. Detailed negotiations
have taken place with a world-renowned luxury hotel
operator to operate the hotel and villas on completion of the
development,” Realtors says in its sales pitch.
“The Black Bess project has been assembled with the
intention of developing a high-end resort community to equal
the very best Barbados and the wider Caribbean has to offer.
The site lends itself extremely well to such a development
and the location and setting are superb. A sale of the site
with the benefit of the planning permission ... is now being
The project in question, which was to have been
undertaken by local company Bacassa Developments
(Barbados) Limited in partnership with Asian hotel chain
Banyan Tree Hotels & Resorts, officially started in 2007, but
did not get past its first phase after finances became an issue,
sources told Barbados TODAY.
“All that basically took place was that the site was
excavated, things like roads laid out, a road bridge
constructed, and the layout for a lake to be used to provide
water to the golf course completed. Funds then became an
issue with the onset of the international financial meltdown
and economic recession,” the official noted.
Investigations revealed that a company called Caribbean
Resort Assets Fund (CRAF) registered in London, England,
working with others, including joint venture partner COPRIM
Inc of Montreal, Canada, which was expected to be in charge
of project development and management, had worked out a
deal where Banyan would have been guaranteed the majority
of earnings from rentals, money which would then be used
for certain tasks.
“The projected return is a minimum of six per cent on
investment in the form of rental income from the villas.
The Banyan Tree will underwrite this rental guarantee for a
minimum of five years from practical completion,” an outline
of the plan stated.
“The Banyan Tree Hotel and Resorts will retain 66.6 per
cent of the gross receipts from lettings to pay for all the
outgoings, including maintenance, and provide it with a fee
for so doing, paying the joint venture partner the remaining
one third, which is anticipated to equate six per cent of the
value of the villas. There is a guaranteed minimum income
equivalent to four per cent of the value.”
It was also intended that CRAF would have provided
investors with “a total return equivalent to 15.2
per annum over the anticipated seven year life of
the fund ... net of all costs and fees”.
“Those investors admitted to the partnership
or buying units at the first close will be given
an additional five per cent share of the final
profit after the repayment of all loans and capital
commitments,” the plan added.
Investigations found that CRAF was
incorporated in 2007, the same year the Black
Bess project was officially launched by then
Minister of Tourism Noel Lynch, but was unable
to raise the funds needed to build the Barbados
resort, which was projected to cost $600 million.
This venture is one of several high-profile ones
in Barbados that have either failed to start or have
been forced to stop mainly because of finance
issues. Also in this category was the Four Seasons
Project, also on the West Coast.
While efforts have been ongoing to get Four
Seasons restarted under the guidance of Barbadian
financing expert Professor Avinash Persaud, a
real estate industry source said the reality was
investors and financiers alike were not willing to
commit until they actually saw activity at the Four
Seasons, Black Rock, St. Michael site.
“Everyone must face that fact. Four Seasons
is the game changer for many of these projects and until
all of the talk ceases and work actually starts on the site in
Black Rock, quite frankly many others are not going to start
because confidence in the market is down and financiers are
still hesitant to pump millions and millions of dollars into
these ventures that have no guarantee of success,” the official
Click here for original Barbados Today article.