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#498857 - 12/10/14 03:56 AM Caye Chapel Sold to Mexican Luxury Hotel Group  
Joined: Oct 1999
Posts: 52,967
Marty Offline
Marty  Offline
Caye Chapel, it's been on the selling block for years…first we heard the Four Seasons Group of luxury hotels would buy it, and then it was the Sheridan group with a Canadian connect, then the Yumi group out of the British Virgin Islands, and then the Qatari's, and in between a few other rich names popped up. But none of those sales materialized, until now. BELTRAIDE sent out a release this evening saying that the sale of the 265 acre island has been completed, and the new owner is an un-named Mexican luxury hotel development group.

According to BELTRAIDE, the group owns and operates luxury developments in Mexico City, Cancun and Acapulco and they expect to partner with a, quote, "renowned global luxury hotel brand."

These preliminary renderings were released today - and the release says work on the new tourism project should commence in early 2015.

The deal is significant for tourism because of the promise of a true luxury brand, but it's also big for banking, because Caye Chapel - acquired to settle a debt in 2011 - has been an albatross on the Belize Bank's books since that time.

So, how much did it go for? We are told the Mexican group bought it for approximately 23 million Belize dollars - what would have to be considered a distressed price considering that it was on offer for over 30 million dollars at one point - and we have seen real estate web listings which put that price at 45 million US dollars.

History tells us that Belize first black millionaire Isaiah Morter owned the island in the early 1900's and had a large coconut planation out there. Latterly, former American coal billionaire Larry Addington bought it and developed a private airstrip, an 18 hole golf course and resort on the island which has hosted Beyonce Knowles and Tiger Woods among its exclusive clientele.

Addington filed for bankruptcy in 2012.

Channel 7

Above: Caye Chapel

Major Hotel Project Coming to Belize

A major new resort project is coming to Belize’s island of Caye Chapel.

The country’s government announced Tuesday evening that a leading Mexican luxury hotel development group had purchased the 265-acre island.

While the government did not reveal the name of the group, it said it consisted of the owners and operators of luxury tourism developments in Mexico City, Cancun and Acapulco.

The group is now “working on a detailed development plan for the island for presentation to Government,” Belize’s BELTRAIDE agency said in a statement.

The plan is expected to include a partnership with a “renowned global luxury hotel brand,” which will be announced in the near future.

The government said it anticipates the project to begin development in early 2015.

“The government of Belize is pleased to welcome this significant investment into Belize’s growing tourism sector,” it said.

Private Island Luxury Tourism Development

The Government of Belize, through BELTRAIDE, is pleased to announce the completion of the sale of the island of Caye Chapel, on Monday 8 December, 2014. Caye Chapel, an island in the Belize District, consisting of 265 acres, was purchased by a leading Mexican luxury hotel development group.

The group, who are owners and operators of luxury tourism developments in Mexico City, Cancun, and Acapulco, are currently working on a detailed development plan for the island for presentation to Government. It is expected that this plan will include the announcement of a partnership with a renown global luxury hotel brand, to be announced in the near future, as well as the development of high-end residencies and other amenities.

It is anticipated by the buyers that the development of the island will commence early in 2015. The Government of Belize is pleased to welcome this new significant investment into Belize’s growing tourism, sector.


#498919 - 12/12/14 03:23 AM Re: Caye Chapel Sold to Mexican Luxury Hotel Group [Re: Marty]  
Joined: Oct 1999
Posts: 52,967
Marty Offline
Marty  Offline

Caye Chapel Investment Explained

Two days ago, we told you about the closing of the deal to sell Caye Chapel which had been on the block for at least three years. The new owner is a Mexican group - which already has a significant tourism investments in Belize in addition to others in Cancun, Mexico City and Acapulco. But who are they? That's what we asked the CEO in the Ministry of Investment Mike Singh today. He started by explaining why the deal is a major relief for the Belize Bank:..

Mike Singh, CEO- Ministry of Trade
"That investment will be very large. It will be a significant inflow of foreign capital. Caye Chapel has been in receivership for the past 4-5 years with the Belize Bank. Mr. Larry Addington who was the owner had borrowed money from the Belize Bank, he didn't repay, so the bank took it on in exchange for the debt. The bank did a sort of a swap on their balance sheet where they actually acquired the asset. It caused a little of a problem because it's a non performing asset as they say in the banking world. So, it was not part of their liquid assets. So the need to sell that by the bank was fairly important. So the owners of El Secreto, a part of the investment group and they have brought in some additional Mexican investors that are very large in developments in Acapulco, Mexico City and Cancun. So the potential for this group is very high."

"Obviously its a multi-million dollar investment and the investor has not been identified."

Mike Singh, CEO- Ministry of Trade
"I don't understand why that would be much of a concern. I think I just indicated who we know as the investor group which is the principals of the owner of an existing investment in Belize that's dong very well. It's based on a partnership that is entirely their own private affair. Of course Central Bank had to do a background check on the principals of the company. But if the company chooses not to make a formal announcement, I think it's entirely up to them. I think it's a good thing. It's going to bring certainly a legitimate world class brand into Belize. I think it's going to speak very well for tourism product. I think it's going to create significant jobs to be able to support a project of that magnitude that close to Belize City, means that you are going to bring employees either from Belize City or nearby communities. So, overall, we think it's positive."

Jules Vasquez
"Now you've mentioned Four Seasons. Is that the luxury brand in question or?"

Mike Singh, CEO- Ministry of Trade
"I do know that's who they are in discussions with. Whether or not they will sign with Four Seasons, that is something that they will have to decide. But I do know they are in discussions with Four Seasons."

Jules Vasquez
"But if not Four Seasons?"

Mike Singh, CEO- Ministry of Trade
"It would be one of the similar brands. There are many of them out there. You got the Ritz Carlton... but it will be one of the 5 star brands."

Jules Vasquez
"How important is that for Belize's profile as a overnight destination?"

Mike Singh, CEO- Ministry of Trade
"It's huge for us. We've challenge to be able to bring in the type of brands that put us on the map and if you think about the marketing program that these brands have, it actually adds to what the BTB already spends. So the halo effect of their kind of marketing will help all our properties."

"Do you anticipate any significant challenges from the environmental community?"

Mike Singh, CEO- Ministry of Trade
"On this project, I can't speak for the community. But I think Caye Chapel has gone through that already - the island itself. I think several years ago when they were doing the major expansion - they have done that. I don't see that the development needed for this island is going to need that much change to the actual ecosystem, so perhaps not. But I can't speak for that. It would be up to them to decide if they see an issue with it or not."

Our information says that the Mexican group paid 23 million US, not Belize dollars as we had reported two nights ago. That is still cheaper than the 45 million US asking price we had seen posted variously on the internet.

Channel 7

Details of Caye Chapel Sale Revealed

On Tuesday, the Government of Belize, through BELTRAIDE, announced the completion of the sale of Caye Chapel to a group of Mexican investors, who own El Secreto in San Pedro.  The two hundred and sixty-five acre island which has been in foreclosure by the Belize Bank for a number of years has been sold for an amount believed to be north of twenty million U.S. dollars.  While the proposed development will be subjected to the scrutiny of Cabinet’s investment subcommittee, as well as an environmental impact assessment by NEAC, Chief Executive Officer in the Ministry of Trade and Investment, Mike Singh, told the media today that the investment will be beneficial to Belize as an established tourism destination.

Mike Singh, C.E.O., Ministry of Trade & Investment

Mike Singh

“The group is made up of the owners of a resort in North Ambergris Caye called El Secreto, which is a very high-end resort that’s been getting very high reviews and awards lately.  So the owners of El Secreto is a part of the investment group and they have brought in some additional Mexican investors that are very large in developments in Acapulco, Mexico City and Cancun.  So the potential for this group is very high because they have all the connections, they certainly have the available capital to invest and of course because of the connection with the Belize Bank, the Central Bank had to be involved very closely to ensure that number one the funds are coming from a legitimate source, that they have the capability of doing it and also to approve the transaction because this is now changing an asset on the Belize Bank’s books from a nonperforming asset and liquidating it, which is a good thing.  It means that it strengthens their balance sheet.  So overall the benefits are multiple.  In respect to where the development is going, we’re being told by the developers that they will be presenting to us a development plan early in the new year.  Of course that’s going to go through the full process, the investment subcommittee of cabinet is going to look at it’s going to have to go through the EIA process.  The initial renderings that they showed us it doesn’t do well for us.”

According to Singh, the investors are in discussion with renowned global luxury brand The Four Seasons to develop high-end residencies on the island.

Channel 5

Caye Chapel sold to Mexican developers

Mexican developers, Abraham Roffe and Abraham Saade, the owners of El Secreto, a resort which opened its doors in San Pedro in 2012, are two of the main investors behind a new resort development planned to take place in 2015 on the historic island of Caye Chapel.

This was confirmed today by Mike Singh, chairman of the Belize Trade and Investment Development Services (BELTRAIDE), although Singh said he was not at liberty to disclose the price which the Mexicans paid for Caye Chapel, since it was a private transaction between them and the Belize Bank.

Previous talks with potential buyers, the most recent being Yumi Limited of the British Virgin Islands, who proposed to purchase the island for US$30 million, fell through.

Although the Caye Chapel package appeared to be a hard sell, Singh said that an improvement in Belize’s S&P ratings was encouraging to the investors.

Singh explained that on Monday the Mexicans took possession of the island, formerly owned by Isaiah Morter, British Honduras’ first known black millionaire. There are also other foreign investors in the mix who have not yet been named.

“Caye Chapel has been in receivership for the last 4, 5 years with the Belize Bank,” Singh explained.

He said that the bank took over the property from Larry Addington in exchange for a debt which he owed the bank. The bank then did a swap on its balance sheet to acquire the asset, Singh said.

Singh said that the investors are in talks with representatives of the Four Seasons brand. He said that the developers had said that they would present a plan for the project in 2015 and that the resort would consist of 140 high-end rooms plus residential development.

Singh said that the proposed development in Caye Chapel will bolster our tourism product and create jobs.

“Overall, we think it’s positive,” he commented.

There were concerns over the fact that the government did not initially release the names of the Mexican investors and suggestions that it may appear to be a shady deal. However, Singh dismissed those notions today, saying that all background checks were executed by the Central Bank of Belize. When we asked for the names of the private investors yesterday, Singh had declined to say, adding that it had not yet been disclosed by the investors in their home country. He said that they were waiting for them to make the announcement there, before they could do so in Belize.

“If the company chooses not to do a formal announcement, that is entirely up to them,” said Singh.

He added that, “that’s the normal way of doing business…”

As for fiscal incentives, Singh said that the Mexicans have not asked for any special deals.

Singh said that it goes without saying that the project, like other large scale projects reviewed by the Cabinet Sub-Committee for Investments, headed by Minister Godwin Hulse, will be subject to what he calls “The Hulse 5-way Test.” That test looks at a range of factors, including employment creation, environmental impacts, as well as returns to the Government of Belize.

“We will be doing everything that we do with the largest investments…” he added.

Singh does not anticipate any major challenge from the environmental community. He said that the island was developed some years ago, and he does not think that the development needed for island will lead to that much change to the existing ecosystem.

As our newspaper had previously reported, British Caribbean Bank International Limited, based at Market Square, Belize City, had acquired Caye Chapel in lieu of a US$30 million liability Caribbean Holdings Inc. (CHI) held with the bank. The bank held the island and villas as security or collateral for a US$20 million loan, which was later increased. The bank acquired Caye Chapel in 2011, in settlement of CHI’s indebtedness to the claimant.

However, the Caye Chapel Resort property, located just 12 miles from Belize City, had been listed at a price of up to US$45 million.

As a historical side note, we recall that Caye Chapel, just south of Caye Caulker, at one point was owned by Isaiah Morter. Morter willed his entire estate to Marcus Garvey in the cause of “African redemption.”

While Garvey was in jail in the late 1920s, his organization was taken over by charlatans, who ended up, after lengthy court proceedings which concluded in 1939, both in British Honduras and in England, in control of Isaiah Morter’s exceedingly wealthy estate. This is how Caye Chapel, a part of Isaiah Morter’s estate, ended up in the hands of an American multimillionaire.


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