Two days ago there was a Press Release from Dubai.
It announced a deal among Range Developments, the Hyatt Hotels Group, and Kiawah Development Partners to build and operate a Park Hyatt Hotel at Christophe Harbour, St. Kitts.
Range Developments is part of Range Holdings Group (RHG), which develops real estate.
RHG’s head office is in Dubai, United Arab Emirates, and it has offices in Pakistan, Iraq, Saudi Arabia, Kuwait and London.
Hyatt Hotels (Hyatt) is one of the world’s largest hotel chains. It has a number of sub-brands, one of which is Park Hyatt, a luxury sub-brand that’s placed in what are considered to be special destinations.
And Kiawah Development Partners (KDP) are South Carolina-based real estate developers who own about 2,500 acres of land at Christophe Harbour.
For over 20 years, people in St. Kitts, and the Government, have been pursuing Hyatt. But there have been challenges.
For example, it seemed that Hyatt was more interested in Southeast Peninsula (SEP) locations than in Frigate Bay or elsewhere. But a good portion of the better land in the SEP was owned by the company which developed the Four Seasons property on Nevis.
This Company had bought the SEP land purportedly for resort development. But there seemed to be no great rush to develop the land. And the reason might have been that its intention was either to develop the land after completing the Four Seasons Hotel, or not to develop it at all, but instead to hold it until that fine hotel started to turn a profit, then to sell it.
In any case, it was a tie up.
Meanwhile, the owners of other SEP land, such as Cockleshell Bay, Banana Bay and Friars’ Bay, were making serious efforts to attract major international hotel brands to the SEP.
Indeed, in the 1990’s, the Friars’ Bay people got Hyatt to sign a deal for a Hyatt Resort, and about 10-12 years later, the Cockleshell Bay interests also got Hyatt to sign a deal at that property, this time for a Park Hyatt.
But financing challenges prevented either project from materializing.
Now, a Park Hyatt could be a good thing for our economy and, most importantly, for our people. I say “could be” because, with the benefit of hindsight and experience, the Government ought not to repeat mistakes made in the past.
Indeed, it might be an opportunity to fix some of those mistakes, for example, the less-than-satisfactory arrangements with Christophe Harbour where, after five years or so, we’ve not seen the much heralded Mandarin Hotel, or any other hotel for that matter. Not even a hotel room has been built.
What I’ve seen is some construction and a lot of destruction.
This would be a good time to guide Kiawah into an arrangement that is more equitable for, and respectful of, the people of this country, to dismantle the principality that is Christophe Harbor, and to introduce a new construct. But it won’t happen, because our errant Prime Minister is focused on other priorities.
Now apart from all of those concerns, we’ve been hearing about law suits brought last month in South Carolina, USA, against, inter alia, Kiawah Development Partners, Kiawah St. Kitts Holdings, and Mr. Charles ’Buddy’ Darby, the top banana in Kiawah Resorts Associates.
Clause 6 of the law suit states that Mr. Darby “has consistently utilized his controlling and superior positions in Kiawah Entities to oppress the minority owners to the benefit of himself and the other major owners, to freeze out the (minority owners) from business, and to squeeze them out of their ownership interests” in Kiawah.
In Clause 9, “the Plaintiffs ask the Court to stop the oppression being carried out by Buddy Darby and order a judicial dissolution of the Kiawah Entities and the liquidation and distribution of their assets”.
In Clause 10, the Plaintiffs state that “because the assets of the Kiawah Entities include real property that is being used by Buddy Darby to carry out his schemes and divest company assets to himself and for other wrongful purposes, the Plaintiffs ask the Court to place a constructive trust or equitable lien upon such property, recognize that the Plaintiffs have equitable title to such property, order the transfer of legal title of all such real property in partition to the owners of the Kiawah Entities, including the Plaintiffs ,in proportion to their ownership interests, and if necessary, direct a partition sale of such property”.
Clause 18 lists the Kiawah Entities, and includes Kiawah St. Kitts Holdings in that list.
In Clause 23 the Plaintiffs claim that Mr. Darby “directed and allowed the commingling of assets from different Kiawah Entities and with entities which he and his family owned….”, and “unilaterally redirected profits from Kiawah Entities to himself and to other businesses with different corporate structures and ownership vested directly or indirectly in members of the Darby family”.
This is very serious stuff.
Of course, Mr. Darby is not liable, and has to be so treated, unless and until proven otherwise. However, this law suit could have severe implications, not only for Kiawah and Christopher Harbor but also for St.Kitts & Nevis. And not only in its result, but also between now and then.
The Press release of 10th July, 2012, referred to a “private beach club” and to “private beach access”, both of which are terms and concepts that are extremely insensitive to, and disrespectful of, the people of this country, to their history, and to the Labour Movement and its stalwarts past, and which, in both concept and reality, have crept into the daily life of what, tragically, has become a jellyfish nation.
It also stated that the Park Hyatt Hotel would be built “contingent upon final financing” and then went on to state that the Hotel would “be financed under the St. Kitts & Nevis Citizenship by Investment Program through the sale of individual investment shares for US$400,000.00.”
This tells me that Kiawah is unable to raise capital to build large facilities, that the project is in trouble, that the Prime Minister is desperate to show something of substance happening at Christophe Harbour, and that a focused, indeed project-specific, highly touted funding scheme such as the one being proposed may be the only lifeline available to the project financially, and to Kiawah generally, as Uncle Sam, always on the lookout for his citizens’ well being, and for other things, watches the game with interest.
It may also be a major lifeline for the Prime Minister politically, because the last thing he’d want is for Christophe Harbour to collapse and for Kiawah’s aggrieved investors to start applying to the Court here to tie up 4-5% of the entire island of St. Kitts in litigation in order to get their justice.
Yes, he mightn’t lose much sleep if the people ‘on the other side of St. Kitts’ have their 5,000 acres and their patrimony tied up as a result of his fiscal irresponsibility. But for him, those folks down at the SEP might be different.
Not only might he lose sleep, but he might cry, long, long tears. Longer and wetter by far than the ones he said that he’d shed after seeing some peoples’ electricity bills.
And if he has to sell another 300-400 passports to preserve a principality within the geographical boundaries of St. Kitts, private beach clubs and private access to beaches and all, and to preserve himself, of course, he’d do it.
Now what are these “investment shares”?
Go to rangedevelopments.com
An investment of US$400,000.00 buys “a share”, which can get passports for the buyer, his or her spouse, and two dependents. And after five years, the share can be sold, and the process can be repeated.
“Range Developments can assist buyers with selecting a lawyer and a service provider”, says the website. Why should Range Developments do that? Can’t they simply refer people to the list of service providers that is published on the Citizenship by Investment Unit’s website? Is this another face of insider trading?
It also says that the investor has to pay 5% Stamp Duty on the sale of the share.
As far as I’m aware, the sale of a company share attracts a Stamp Duty of 2%, payable by the buyer. So this is not a company share, is it?
And the sale of a share in a condominium attracts a Stamp Duty of 5%, but the legal obligation is on the seller, not on the buyer, to pay this amount.
So what kind of share is this?
I’d like to know.
But what I’d like to know most is what kind of share are the people of this country to get out of these deals, other than this steady share of licks, disrespect and indignity that they’ve been getting?
Will our Tourism Minister be able to help fill these proposed hotel rooms when, as we speak, there are over 400 hotel rooms in St. Kitts that are occupied by students instead of tourists?
Will our people get jobs, or will they continue to be made second class citizens?
Will those who do get work have to endure 3-, and 4-day work weeks in the height of the winter season?
Will the Park Hyatt follow the bad example and hold on to the VAT (formerly 10% Room Tax) for its own use?
In the end, who will benefit from this? If the people of this nation don’t, and in a major way, then what’s the point?
