Government yesterday defended the mortgaging of Kingston property for the Marriott Hotel, saying that the financial
arrangements in place allowed it to do so. But its statement raises even more questions over the arrangements between Government and the investors.
According to the Government, the ownership of the Marriott Hotel project, the assets of which total in excess of US$58M, would remain with AHI and the syndicated loan of US$27M will be repaid from its operations. This would contradict the fact that the notice for the mortgage published on November 22, 2014 in the Official Gazette, states clearly that all the buildings and erections on the land and any future buildings will belong to the mortgagor – Republic Bank.
Denying reports that the Atlantic Hotel Inc. (AHI) has in effect “pawned” off the hotel, the statement by Government yesterday said that the publication of these mortgages to Republic Bank is in fact concrete evidence that the financial arrangements with that bank are being concluded and that the funding, some US$27M, has been committed.
AHI is the special company established by Government to manage the project.
Sitting at the head of that company is Winston Brassington, whose controversial handling of Government’s investments and privatizations has been under fire. AHI said that publication of the mortgage in the Official Gazette is normal for any loan agreement. Brassington said that the feasibility studies for the hotel allowed for mortgages to be taken.
AHI insisted that on more than one occasion it had pointed out that the conclusion of the Republic Bank financing is a requirement for the closing of the arrangements with the principal investors to acquire 67% of the equity of AHI.
The US$58M hotel has been controversial from the start with secrecy surrounding the investors. It was only recently, when the hotel is almost completed, that Government announced that it has found two Hong Kong-based businessmen as partners. Those businessmen are the ones who will put in US$8M. There have also been numerous questions about the source of monies being used in the project but few answers.
The project is now set to be completed in February next year, with the hiring of staffers underway.
The construction is being carried out by the Chinese-owned, Shanghai Construction Group.
In September, Brassington had said that Republic Bank was “close to finalizing the documentation for the debt financing agreement”. To date, all the money that has been spent on the Marriott has been taxpayers’ dollars – some US$20M of it.
In October, Member of Parliament for A Partnership for National Unity (APNU), Desmond Trotman, petitioned the High Court to prevent the National Industrial and Commercial Investments Limited (NICIL), the Government-owned company that controls AHI and their head, Brassington, from mortgaging, leasing or in any way transferring the title of the land and building on which the Marriott Hotel sits in Kingston.
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