THE Urban Development Corporation (UDC) said yesterday that it expects to make between US$5 million and US$6 million from the sale of its 50 per cent share in Bloody Bay Hotel, formerly Grand Lido, in Negril, to the SuperClubs Group.
The 22-acre property — a 'victim' of the 1990s financial meltdown — was sold by FINSAC Limited to a joint venture pair of the SuperClubs-owned Village Resorts Limited and the UDC's Bloody Bay Hotel Development Limited in 2000.
SuperClubs/Village Resorts and UDC/Bloody Bay each paid half of the US$9 million price for the 200-room resort at the time but, according to information coming out of yesterday's meeting of Parliament's Public Administration and Ap-propriations Committee, the joint venture partners are expected to make at least a 100 per cent profit on their investment.
The UDC explained yesterday that it had sold its 50 per cent share to Village Resorts, which had first call on the shares for US$9.1 million. The UDC also picked up an additional US$1.1 million refund on a loan to the project. However, it has to pay approximately US$1.1 million on an outstanding loan from the Development Bank of Jamaica (DBJ) which was used to secure the property.
"...So we are looking at probably about US$5-6 million, after the commissions," UDC deputy general manager in charge of finance, Donald Hamilton, told the committee.
SuperClubs/Village Resorts is expected to sell the entire 22-acre property, which it now fully owns with the UDC's departure, to Blue Diamond Resorts, a subsidiary of Canada-based Sunwing Travel Group, which is seeking to expand its presence in the Jamaican tourism market.
"Are you aware what will happen to that Bloody Bay property now?" PAAC Chairman Edmund Bartlett asked.
"UDC has sold its 50 per cent to Village Resort. We understand that Village Resorts intends to sell to Blue Diamond," permanent secretary in the Office of the Prime Minister Onika Miller explained.
Blue Diamond bought the 350-room Starfish Trelawny hotel last June and spent US$40 million on refurbishing the property to open it as Memories White Sands, then extended its management lease on the 226-room Braco Hotel, which is owned by the National Insurance Fund (NIF), then announced construction of a 500-room five-star hotel next door to Starfish Trelawny.
The company has also been seeking to expand into Negril, and Bloody Bay is set to become the scene of its landing there.
The PAAC was unable to ascertain the selling price at which SuperClubs/Village Resorts will dispose the property to Blue Diamond, but UDC General Manager, Desmond Malcolm, said that Blue Diamond, which had been trying to buy the Braco property as well, has significant expansion plans for the property.