Less than 10 days away from General and Regional Elections in Guyana, the incumbent coalition administration rushed a sod-turning event for the construction of two more hotels, despite the investors still in negotiations with the potential brand partners.
The sod-turning ceremony was held on Wednesday at Plantation Ogle, East Coast Demerara (ECD), where approximately 21 acres of prime real estate lands have been sold to Caribbean Marketing Enterprise Inc (CMEI) – a local company formed by a group of foreign investors – to construct two “international flagship” hotels.
While there have been reports that a hotel under the Hilton brand will be constructed at the site, one of the principal investors, Guyanese-born businessman Edmond Braithwaite, told reporters that they are still in discussions with the franchise holder and as such failed to confirm which brands of hotel will be built.
He claimed that they have already secured a commitment from an international brand –one of the top hoteliers in the world – but refused to divulge any more details because, according to him, there is a lot more work to be done and they do not want to jeopardise the negotiations.
One of the seven principals of CMEI, Mike Elliot, has built hotels across the United States and in the Latin American/Caribbean region under the brands of Hilton, Marriott, Hyatt, Choice and IHG. His company is Energy Real Estate Solutions (ERES).
Pressed as to whether the two hotels will be under the same brand or different brands, Braithwaite said that decision lies with the investors.
“It’s incumbent upon us, who are looking to do two hotels, to determine which one fits the bill – whether it’s one brand for two (hotels) or two separate brands. That’s all the negotiations going on right now,” the businessman contended.
Meanwhile, the National Industrial and Commercial Investments Limited (NICIL) has again defended the deal amidst concerns by stakeholders.
In fact, Privatisation Specialist Racheal Henry told reporters on the sidelines of Wednesday’s sod-turning ceremony that with this particular project, there is a choice of hotel brands given the established connection between Elliot and top hoteliers.
“They’re in that contract stage and in that stage, they’re not allowed to disclose all the information, and that’s pretty normal business,” she asserted.
Asked about NICIL’s confidence in the investment, the Privatisation Specialist explained that the commercial agreement with CMEI is solid.
Only last week, the sod was turned for the construction of another hotel – AC Marriott, US$75 million project being undertaken by a Trinidadian investor. Like in this case, that principal, John Aboud, has not yet secured an agreement with the franchise holder, telling reporters that they are still in talks on that. He is planning to construct the five-star hotel on 2.61 acres of land at Plantation Ogle. He had paid over G$26 million per acre for the plot.
While the entire CMEI project is pegged at roughly US$100 million for the two hotels, when pressed for the price paid for the near 21 acres of land, which were once sugar fields that were vested to NICIL, Braithwaite would only say they paid a “comparable” price.
“I don’t necessarily have to give a figure… Based on our analysis figure, we feel that it’s quite comparable – whether it’s above or it’s below…” he contended.
Asked the same question, Henry posited that this parcel of land is also above the G$26 million range but did not divulge any other details when pressed for an exact amount.
“There is some information that is confidential due to the contracts that we’re into with these principals but lands have been sold for prime value above valuations. So for that, we’re satisfied that the due diligence process has been pretty solid in terms of us receiving value for the lands,” the NICIL official noted.
According to Henry, they signed a payment agreement with CMEI which entails a part-payment upfront and the release of the remaining amounts upon the transfer of land titles and other documentation.
The two hotels will include amenities such as a miniature golf course, clubhouse, entertainment centre, swimming pool, solar farm and green space allocation.
