Is Puerto Azul Belize for Real?
The billion dollar Puerto Azul project, or idea, is in the news once again. This time an American mortgagee is accusing the Puerto Azul developers of defaulting on a purchase agreement for Northern Two Caye. John Mills held a press conference on April 16, 2015 to voice his concerns over recent reports that the purchase of Northern Two Caye was finalized.
Some time ago, Mills bailed out the current owners of the islands, Northern Two Cayes Company Limited and the Lighthouse Reef Resort Limited, by purchasing the mortgage on Lighthouse Reef Resort just before the bank foreclosed upon the property. Therefore, he has a lean on the property and must be paid before any sale can be finalized. Mills says, “Puerto Azul has not closed on the islands. They signed a contract to purchase Northern 2 Cayes in March 2013. The first payment was to be made in March 2014. They did not make that. The second payment was to be made in 2015 and they did not make that.”
Puerto Azul says the delay in payment is due to legal procedures. The owners of the property, principals of Northern Two Cayes Company Limited and the Lighthouse Reef Resort Limited, were involved in a civil matter that has now been settled through arbitration. Domenico Giannini, President of Puerto Azul International, responded to John Mills' public comments in a joint release with John M. Black of Lighthouse Reef Resort Limited and Kathy Stuart of Northern Two Company Limited. The release states: “Puerto Azul International Holding Corp. signed a purchase agreement with Northern Two Cayes Company Ltd. and Lighthouse Reef Resort Ltd, who are the legitimate owners of the Northern Two Cayes at Lighthouse Atoll. All encumbrances on the property are scheduled to be paid from closing proceeds by escrow agent Barrow & Williams. Mr. Mills is aware of this as it was settled through legal arbitration.”
Mills clearly is trying to protect his financial interest by calling the media to publicize his “concerns”. However, he is definitely not the only person skeptical about the ambitious Puerto Azul idea. Most who have reviewed the project believe it must be scaled way back before it can even be possible. Luckily for the investors, even environmentalists believe the island is in need of development to halt the deterioration.
It is a 25 minute flight from the Belize City Municipal Airport to the island formerly known as Lighthouse Reef Resort. Though it is still surrounded by the most incredible turquoise shaded sea water in the Caribbean, the island is not as beautiful as it once was. There are hundreds of infected coconut trees that have been left untreated. The beach is covered with dead seaweed and garbage that floats in from the Southeast. Garbage that is collected is also torn apart by what is believed to be a very aggressive rodent population. According to the developers, they are hiring one of the most recognized international environmental assessment firms to conduct environmental studies for Puerto Azul and the wider area. “If their assessment finds that we can’t do certain things then we will have to make necessary changes to the plan but at the end of the day the environment comes first.”
The Puerto Azul project as it is currently known calls for a 350 room resort with a 250 boat marina, a golf course and an airport. One local partner says contracts for the development will be issued exclusively to Belizeans where service is available. When operational there will be a staff of approximately 2,000 people and 85 percent minimum must be Belizeans. These Belizeans will be trained to provide 7-star service at an academy that will be built by the developers to provide free training for all interested Belizeans. 7-star service is the highest in the world. Investors project that Puerto Azul will result in more than a hundred million dollars per annum in taxes. Accommodation is expected to cost US$20,000 to US$30,000 per night as the resort is catering to the richest people in the world. Foreign exchange will be in the millions annually.
However, to be given the nod of approval, the development must satisfy five criteria for investment. To do business in Belize the project must be socially and economically acceptable and legally doable. The second criterion for investment in Belize demands that the project provides meaningful employment that pays well. The third criterion for investment is the project must create an increase in revenue for the Government of Belize. The fourth criterion is that it must bring foreign exchange. The fifth criterion and most important is that it must preserve and possibly enhance the environment.
In the joint release issued by Puerto Azul International and the property owners, they claim to have “complied with the terms of reference provided by the Environmental Subcommittee, and environmental studies are being conducted to determine the appropriate development for the Northern Two Cayes. The final project proposal will depend on the outcome of these studies.”
Despite continued assurance by the principals of Puerto Azul International, Belizeans continue to ask, “Is Puerto Azul for real?”