Outameni back on the market
Published:Sunday | October 27, 2019 | 12:33 AMHuntley Medley - Senior Business Writer
The National Housing Trust, (NHT) is again trying to find a buyer on the open market for the nine-acre Orange Grove property in Trelawny it acquired more than six years ago amid a firestorm of controversy.
The property houses the shuttered Outameni Experience, a history- themed tour and attraction that was owned and operated by filmmaker Lenny Little White through his company Orange Valley Holdings Limited (OVH).
The NHT’s purchase in early 2013, which initially involved only the land, followed a period of financial troubles for OVH which also saw the former National Investment Bank of Jamaica, NIBJ, pumping US$500,000 in equity into the venture. This investment was later written off as uncollectable by the Development Bank of Jamaica into which NIBJ, by then, had been merged.
Following the public furore which erupted in 2014, NHT, a government run mortgage and housing agency, has tried unsuccessfully since 2015 to sell the land. A successful bidder selected by the NHT to buy the land in October 2016, was said to have backtracked and copped out of the negotiations, after which the agency, in 2017, re-offered the property, this time, for sale or lease. The outcome of the 2017 offer is not immediately clear.
Financial Gleaner sought information from the NHT on the results of the offer advertised two years ago, the circumstances that led to the property’s return to the market, the cost incurred to maintain the property since the NHT purchased it in 2013, and whether the real estate has earned any income. No response has yet been provided.
The land was acquired by the NHT in March 2013 from OVH for $180 million with the payment being made to the former Capital & Credit Merchant Bank, which, along with Jamaica Money Market Brokers Limited, had a shared lien on the property. OVH was said to have been indebted to both institutions. The purchase was done, the NHT said at the time, after valuations of $311 million in 2011 and $280 million in 2013 by different valuators.
The rationale provided by NHT for the purchase at the time was the property’s immense recreational, cultural, heritage value and tourism potential, and that it was akin to its social investment in the development and ongoing management of the Emancipation Park green area in New Kingston.
In mid-2014 the Trust also bought from OVH for just over $2 million, equipment and furnishings that had been used for the attraction and tour business, and was said to have commenced negotiations for the intellectual property related to the history tour.
At the time, the NHT was also said to have mulled several land use options for the property, including establishing a Jamaica 50 legacy historical park there or restating the Outameni tour. The location was never selected for a legacy project, and an estimated $110 million needed at the time to get the history and culture business operational, plus the public furore, appears to have stymied that option.
In one year, following the acquisition, the NHT is on record as having spent approximately $21 million to maintain the property, which does not appear to have been commercially utilised since then.
The property’s repeated unsuccessful return to the market since its 2013 purchase by the NHT mirrors attempts, also said to have been unsuccessful, by the former creditors to offload the collateral for cash during the OVH indebtedness.
Industry sources say that the property having not been bought for residential development, the relatively small acreage of the does not allow for the spreading of the associated development costs, should consideration be given to using it as a residential development. Additionally, its former use as a commercial venture, it is believed, would create a high cost for conversion to residential use.
In the latest sale or lease bid, the NHT has listed the commercial property on its website and placed newspaper advertisements. The latest call for proposals for purchase or lease lists no deadline for submission.
The advertisement notes that “the NHT will sell or lease the property ‘as-is’ to the successful proposer, if any”.
The offer describes the property as including office and other buildings, entertainment area, a four-bedroom Georgian great house, sugar mill, burial ground and graves of past owners. “The property was previously used for historic tours, catering mainly to visitors to the island and students of history from primary and high schools,” the NHT notice says.
The NHT requires proposers for lease to show, “how maintenance of the tourism product, recreational and, if feasible, educational use of the property will be achieved”. And it stipulates that residential use will not be accommodated in any lease arrangement.
The NHT will also not provide mortgage financing for persons wishing to purchase the property.