Black Bay to Cost Taxpayers $58 million

The Black Bay Lands transaction entered into by the UWP government is an “irresponsible approach of the former administration” and will cost the people of St Lucia EC58.725 million dollars to re-purchase the lands. That’s according to PM Dr Kenny Anthony at a press conference held at his office yesterday.
The prime minister who appeared to be running quickly through the briefing —possibly because of a Cabinet meeting which was scheduled immediately after, blames the former administration for costing the country a loss of more than 20 million dollars “at a time when the country is still recovering from damages incurred by Hurricane Tomas.”
“Apart from an occasional statement from Minister of Tourism, Allen Chastanet, who initially denied that the development was in trouble, the Government and its Prime Minister, Stephenson King refused to comment on the allegations of the then opposition St Lucia Party,” said Anthony.
According to the prime minister, the developers, Roebuck Properties (St Lucia), were supposed to develop a five-star resort development under the brand name of Ritz Carlton in Black Bay and Cannelles. He further stated that the developers initially approached the former SLP administration in 2005. The then government had offered to sell the property comprising 219.78 acres to Roebuck Properties St Lucia to facilitate the development.
“The UWP government decided that they would use a different approach. They allowed NDC, then chaired by UWP chairman, Nicholas John to exchange the entire parcel of land at Black Bay for 12.5 percent, redeemable preference shares in the company, Roebuck Properties.
“NDC declined to pay for the land and took shares instead,” Anthony said, while adding, “The UWP government decided to also acquire some 249.72 acres of land at Cannelles in the south-east coast of St Lucia. Government now has to pay the owners of this parcel of land EC $27, 866, 203.20.”
In effect therefore, according to Anthony, the UWP government places a total of 469.50 acres of land at the disposal of Roebuck Properties. Anthony announced on Friday, in order to finance the development, Roebuck Properties secured a loan of approximately US $25 million from a bank, Kaupthing Singer & Friedlander Ltd. Due to difficulties encountered by the development, the developers could not repay the loan they had obtained to finance the project.                         Meanwhile the bank collapsed and entered into administration. According to government, administrators of the bank have been attempting to recover the outstanding loan to Roebuck. The administrators, in a bid to recover the loan, threatened to sell the land.
Anthony also accused former Prime Minister Stephenson King of signing an agreement to reclaim the lands for US$11.750 or EC$31.725 million dollars on November 24, 2011, four days before the general elections.
Since assuming office, Anthony said, the current SLP administration reviewed the matter and decided that notwithstanding the huge loss that was incurred, it is in the public’s best interest to ensure the lands were returned to the ownership of the people of St Lucia.
“It therefore decided, despite the irresponsible approach of the former UWP government, to live with the decision to purchase the lands in question, which will cost the people of St Lucia EC $58.72 million dollars,” Anthony said adding, the figure includes cost to repurchase the lands and cost of the compensation of the lands acquired at Cannelles for Roebuck.
“The challenge now,” the prime minister explained, “is to raise money to pay the bank and the owners of the property which the government acquired at Cannelles.”
With a time frame of 150     days after the agreement is signed to reclaim the Black Bay property, it is no surprise Anthony and his administration’s first choice would be to borrow the sum amount to settle the agreement. Anthony explained to a quiet and seemingly stunned press room that should government delay in an effort to acquire funds, there is a possibility of the property being sold to a third party resulting in an even greater loss for the country.
He further noted that due to ongoing projects started by the previous UWP administration, government is also forced to borrow an additional 484 million dollars to support the projects. Projects that he claims are important in the recovery process of St Lucia but again.
“Projects started by the previous government is going to require some 484 million dollars; the amazing thing was that they commenced these projects without arranging for the financing of these projects – so we are going to start the budget recycle having to borrow at least 480 million dollars to finance the ongoing projects,” he said.
According to Anthony, his administration will not have any room available to initialize any capital projects planned for the new fiscal year as a result of a situation he says, was created by the previous administration.
However, the PM assured the press that his government will remain committed to continuing all projects of the previous administration that are in the country’s best interest.