THE government yesterday got parliamentary approval to withdraw J$75 million from the capital development fund (CDF) to help finance a 360-room hotel it is developing in Whitehouse, Westmoreland in partnership with Gordon “Butch” Stewart’s organisation.

The hotel, which will be marketed under Stewart’s Beaches brand, is seen by the government as the centrepiece of a major plan, being spearheaded by the Urban Development Corporation (UDC), for the opening of the island’s south coast for tourism and general development.

The CDF is the account into which the earnings from the bauxite production levy is channelled, to be used primarily for economic development projects, rather than normal government housekeeping expenditure.

The J$75-million (approximately US$1.6 million) represents less than three per cent of the projected US$60-million cost of the hotel, to be owned by a company called New Town Development.

Stewart’s holding company, Gorstew, will control about a third of New Town, with the remaining two-thirds to be held by the government through the UDC and the National Investment Bank of Jamaica (NIBJ). That arrangement is to last for a decade.

“UDC and Gorstew have agreed in heads of agreement to purchase the interest of the NIBJ in New Town, after 10 years, for $35 million,” Davies told Parliament.

Stewart, whose chain of all-inclusive Sandals and Beaches hotels represent one of the world’s strongest leisure brands, had, in the mid-1990s, started preliminary work on the 33-acres of land in Whitehouse where he intended to build a 258-room property.

That was placed on hold while Stewart followed through on other projects, until last year when he reached an agreement with the UDC and the NIBJ to re-start the development.

As part of its investment in New Town, Gorstew put up the land and is also injecting another US$5 million cash for the project, which will be 50:50 in debt and equity.

“Work has started on the property and is taking place now,” said Gorstew executive, Patrick Lynch.