The partially completed Molasses Reef development on West Caicos
The government has announced the completion of a development agreement enabling the recommencement of the Molasses Reef development, a luxury hotel and condominium resort on West Caicos, which has been stalled since 2008.
The development agreement was completed on December 6, while the remaining arrangements necessary for recommencing the project were due to be completed last week.
West Caicos measures 9 square miles and is currently uninhabited. Development of the island began in 2001, but with the credit crisis in 2008 and the collapse of main creditor to the project, the development came to a standstill in the same year.
A group of European investors advised by Kew Capital reached an agreement with the previous developers, Logwood Development Company, to buy most of their interest in the project, and with the administrator of the original creditor to buy its interest in the land and other assets including the partially built hotel and associated infrastructure.
The project will re-mobilise as soon as practicable and after the new development team has carried out a detailed review of the existing infrastructure and buildings. Subject to this review, the developer looks to start work in 2013 with a view to opening the hotel as soon as possible.
The development agreement, initially signed by Governor Ric Todd on behalf of the government, has been under negotiation between the government, the owners of the development and the new investors for nearly 12 months, and will bring significant benefits to the government and people of the islands.
The development is a multi-phased development, which will be a source of construction activity and employment on the island for many years to come. Other benefits include enhanced government revenues through ongoing duties, licence and other fees, as well as a 25% share of proceeds from the sale of leasehold interests of land located in the southern part of West Caicos. Also the agreement reached with the new investors yielded the government $7.6 million, including stamp duty, through the completion of land sales that had previously been agreed but not completed.
The original project employed 500 people at its peak and was expected to create hundreds of jobs on an ongoing basis once the hotel was opened; the government expects similar levels of employment under the new development.
The additional phases of the development include luxury villa and condominium developments, which will create further construction work and hospitality industry employment. The investment group expects that hundreds of millions of dollars will be invested in the island over the lifetime of the project.
The new development team has ambitious plans for making an environmentally sustainable development on West Caicos and will work closely with the various government agencies including the Planning Department and Department of the Environment and Costal Resources among others. A key part of the development agreement designates much of the island as a nature conservancy, which the project team has undertaken to maintain, preserve and protect.
Todd commented: "I am glad that the government and the various parties involved in this transaction have reached a deal that will enable this project to restart. The project will add to the range of tourism and hospitality offerings, which already makes these islands such a leading tourism destination. This luxury resort development will deliver considerable economic and employment benefits to TCI, and has been very carefully structured so as to preserve the unique environmental and marine heritage of West Caicos. The re-start of the development is a further vote of confidence in TCI and in the current investment policy of the TCIG.”
A spokesman for the investment adviser, Kew Capital said: “We are very pleased to have advised on this investment in TCI. We have worked hard along with the government to bring it about, and we look forward to the project recommencing with the new development team. The investment reflects our conviction that TCI has a great tourism base and has enormous further tourism potential. We know this project comes with a great deal of responsibility; West Caicos is a beautiful island and we are determined to ensure that the new development is sensitive to its environment and to this end we will work closely with the various government agencies as well as the newly elected government.”