July 4th saw a Public consultation in respect of a planning application for the development of Pinneys Estate. Over the years there has been much talk about possible construction of hotels and villas on this land. The presentation for this consultation meeting was given by Lee Nightingale of KSS, the architects for the project. He was accompanied by Alison King Joseph also a part of the team put together by the developer. Mr. Nightingale gave a competent, low key, preliminary assessment of the application. He began by saying that this was not the old Newfound, that there were now entirely new investors. Indeed his client is named as Newfound Pinneys Limited (Daren Burney).
A fruitful successful development of this nature is neither easy nor certain. You need a developer, a financier and, since the plan calls for two hotels, an operator of same. The greater the experience of the developer, the pocket of the financier, and the reputation of the operator, the better the chance of success. We are not told who the financiers might be, but some funds have been committed for payment for removal of Double Deuce from its earlier position and for payment of the architects etc. Operators have not yet been approached. We would hope for a quality company with a reputation to match that of Four Seasons. For their part the operator has to be satisfied that the developer and financier can make the whole scheme work, and that they are not lending their name to a fantasy or a project which may get stuck or run into insuperable difficulties. The only identity we are given is developer Daren Burney. More about him later.
According to the documents lodged at the Charlestown Public Library, the Application is for permission to develop 380 acres of Pinneys Estate for two hotels, 265 villas or apartments, and an 18 hole golf course. One hotel will be a beach hotel, having 72 bedroom suites. There will be a spa hotel of similar size, sited to the East of the island road. None of this is unexpected or sounds odd. So what are the general constraints and difficulties peculiar to the site? We, and the architects, know the damage caused by water at the neighbouring resort. The sea, and mountain and ghaut runoff can overwhelm a carelessly sited range of buildings.
Following a big storm we have seen the sea advance 150 yards into the land now proposed for the development. As I understand it the proposal is to take up sand from the areas near to the beach and add that to the beach. At the same time that land, or at least the areas to be built upon near the beach, would be raised, perhaps by 3 or 4 metres, by infilling with spoil (earth and rocks) removed from the intended golf course. Runoff would be channelled around both sides. Mr. Nightingale said that the beach would be renourished, ie added to by dredging, whenever it was necessary. There would be no breakwaters or groins. Long term I doubt that this will work. If you attempt to increase the width of the beach, in due course the sea will distribute that sand along the rest of the beach, and hurricane seas may, after destroying the beach, attack the newly raised levels and erode the foundations of all buildings too close to the coast.
The two essentials for a development, water and electricity, how do they fare? The architects calculation is that the total water requirement for the site, golf course, landscaping and domestic will be 1,938,377 litres per day. They hope to reduce this demand by recycling treated effluent water and obtaining 213,836 litres per day from the Nevis mains supply. Making an allowance for these two items leaves a shortfall of 1,146,605 l.p.d. This they intend to supply from a sea water reverse osmosis plant of capacity 1200 cubic metres per day. This is a very large plant, expensive, high on electricity, and seriously demanding of impeccable maintenance if it is to deliver day in day out. The highly saline waste of about 3000 cubic metres discharged daily into the sea may have some effect upon the marine environment.
The developers say that Nevlec was advised in May 2012 of a preliminary electrical load requirement in the region of 5.2 Mega Watts. They hope to use solar power and photovoltaic cells to decrease their demand upon Nevlec’s electricity. Nevlec tell me that at present they have spare capacity of 2-3 MW, and that they would always try to help. However they point out that other demands may arise from other developments. Further, electricity produced from photovoltaic cells depends upon the amount of sunlight. Night produces nothing, cloudy days produce less than sunny days. The problem for Nevlec would be one of stabilisation of load. It would appear that there could be a considerable short fall. There is space for two more generators at Prospect, but who is to fund this, or are we to wait for geothermal?
Plans for and execution of a development are the function and responsibility of the developer. He it is who will arrange the financing, the construction, the hotel operator, and the sales of land, villas and apartments. He it is who will make use of and take advantage of the vast tax concessions given to the original Newfound. Once his scheme is given the final go ahead Nevis is stuck with him and his agreed development. The NIA representing all of us must therefore satisfy itself that the project is a good one and that the developer has the capacity and funds to complete and will actually do so. They must do better than they did with the original Newfound, when they were bluffed or helicoptered into disadvantageous arrangements with virtually insolvent developers. They have the name of Mr. Daren Burney and perhaps they know, as they should, his co-investors. We are told that DB is a property developer from England, so we need to know if this is true, and if he has been successful and is a person of substance.
Fortunately the Internet can provide much information. What I have found is that DB was a director of many different UK companies often with a co-director named Robert Whitton. Most of the operations put together by these two took place between 2006 (sometimes earlier) and 2012, many of them failed and went into liquidation or administration. Some of them changed their names.
Some owned the others. It was a bit of a tangle. Names of Companies were often very similar, for instance:
RCAP Limited
Rom Capital (Asset Management) Ltd.
Rom Capital (Clacton) Ltd.
Rom Capital (Northamption) ltd.
Rom Capital (Walsall) Ltd.
Rom Capital (Accrington) Ltd.
Rom Capital Opportunites Fund Ltd.
Rom Capital Personnel Ltd.
Rom Capital (Academy) Ltd.
There was a number of ‘Canleys’ and of ‘Hudsons’.
To give you the flavour of past events, here are a few excerpts. They are not always clear but they show a general picture.
1. Canley 2 Ltd.
Incorporated 29.11.07. Previous name Rom Capital (Clacton) Ltd.
Directors: D. Burney 29.11.07 – 28.2.12
R. Whitton 29.11.07 – 28.2.12
Administrators appointed: 16.4.12
The latest accounts submitted to Companies House for year to 13/3/11 reported:
Cash at Bank £19,928
Liabilities £12,191,043
Net worth - £6,498,933
Assets $692,110.
2. Canley 5 Ltd.
Previously Rom Capital (Walsall) Ltd.
Previously Rom Capital (Accrington) ltd.
Annual accounts to 31.03.11 report;
Liabilities £24,431,203
Net worth -£7,051,240
Assets £79,693
Messrs Whitton and Burney leave the board on 01.03.12
3. Canley Limited
Annual accounts to 31.3.11 reported:
Cash at Bank £2,024,193
Liabilities £4,958,910
Net worth -£26,234,987
Assets £3,031,376
These are not satisfactory filings since Net worth should be Assets less Liabilities (the amount owed by a Company to others). Nevertheless they are filed accounts of Companies that lost millions.
A check on Daren Mark Burney states under ‘Directorships’:
4 current appointments
48 resigned appointments
31 dissolved appointments
My score differed. I counted 39 dissolved, and a total of 61, either dissolved, liquidated or in Administration.
A check on Robert David Whitton was of the same kind. 1 current directorship, 59 resigned appointments, 39 dissolved appointments.
Is this not an unusual record of multiple failure?
The curious thing is that these two UK property developer partners appear to have gone to the Caribbean, Burney to Nevis, Whitton to St. Lucia where his Freedom Bay development, within the World Heritage Pitons area could cause the removal of that sought after classification.
You and I might be surprised that developers with this kind of record can still find anyone willing to lend them money. The question for the NIA is, has Mr. Burney’s Newfound enough money behind it to complete the project? The old Newfound hoped to make sufficient forward sale of plots and villas with which to fund the infrastructure. That did not happen. For all we know Mr. Burney may also be relying on forward sales to keep the project going. What we cannot permit is the commencement of an inadequately funded development, which half completes a hotel and some beach villas, suffers storm damage, and then runs out of money and leaves us with broken buildings and a court case. There is a simple way to protect ourselves from this. The NIA should demand a performance bond.
A bond of this nature is one issued by a reputable bank of international standing, whereby the bank guarantees to put up whatever is necessary, up to the limit of the bond figure, to allow for completion of the works should the developer run out of funds. Bona fide developers of substance have no difficulty in obtaining a performance bond from their bankers. They would expect to be asked to provide one for a development of this scale. As the developer has divided the project into three phases, you would want a bond to cover at least phase one, and then be continued, perhaps for different amounts on completion of phase one and then phase two. Final planning permission should be granted only upon production of the required bond. We can’t afford a Zetlands on our prime beach.
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