When the Jamaica Bauxite Mining Limited (JBML) secured a 20-year lease arrangement with Guardsman Group Limited for the popular Puerto Seco Beach in Discovery Bay, it hoped returns on the property would near eightfold to $11.4 million per year.

Executive chairman of Guardsman, Kenny Benjamin, recently confirmed the lease arrangement with JBML, a wholly-owned company of the Government of Jamaica. Guardsman plans to inject more than $100 million in the first phase to improve the location and increase traffic to the venue.

The property, which consists of eight acres, went to tender after its previous occupant encountered difficulties in covering expenses. A fee of $300 was charged to gain entry but that had little or no impact on increasing the attention it was given from locals and tourists visiting the community.

Ultimately, JBML wants annual returns of at least five per cent of the $228 million the Puerto Seco Beach was valued at in November 2014. Prior to the current lease agreement the company earned $1.5 million per annum on the property.

“When you go to Puerto Seco during the week there is hardly anybody there, as well as you have free beaches further down Runaway Bay,” managing director of JBML Coy Roache on Monday told the Jamaica Observer.

“The occupant had to hope that the crowd from the public holidays would spend enough to cover the lease amount but that’s no return for us. So we decided to advertise it, and three companies including Guardsman applied for the lease agreement. It went through the normal Government procurement process and Guardsman got it,” Roache said.

With the Group’s growing interests in tourist attractions across the island, Roache reckons that the company’s established tourist market will increase the chances of JBML meeting its returns target.

“It’s hard to say what the total leasing fee would be, but we usually start at more than what we were getting from the previous occupant and the fee goes up to the normal rate after three years. The average would be five per cent of property value and that’s where we want to get to,” the managing director said.

He noted that plans are underway to improve the entrance of Puerto Seco Beach, water attractions, a zoo, botanical garden and a bandstand for live performances in the evening. Guardsman Group has been hailed for its Konoko Park in Ocho Rios and the renowned Hope Zoo.

Co-managing director of Guardsman Group Limited, Vinay Walia, told the Business Observer that a committee has been appointed to provide insight on the features that would best suit the location.

“We are still planning all of those things while clean-up is now in progress. As we speak, there is a meeting going on to discuss what they need to do going forward and in another 10 days we will finalise all the plans,” he stated. The beach is expected to be reopened to the public in February 2016.

Once improvement is completed, Benjamin will be sitting down with the community to determine the entry price.