Husseys sticking to core business

Economic and other variables beyond the control of the owners of Terra Nova have been blamed for dooming the construction of 61 luxury residences, prodding the hoteliers to stick to their core business, CEO Andrew Hussey has said.

The Hussey family, which backed the highly touted Residences at Terra Nova project, will slash the 14 storeys originally planned.

The $7-billion high-rise development, unveiled last year, was slated to be a mixed-used complex with 30 fully furnished hotel suites and 61 luxury residences.

“We hired the best in this project to have in place a very competent team of professionals. We invested a significant amount of time and our own money in this project. However, since COVID, there have been many unfavourable variables that have impacted the project,” Hussey told The Gleaner on Monday.

The Terra Nova CEO said that the business decision required “immediate changes” to the plan as many challenges that followed the pandemic “could not have been predicted two years ago”.

Hussey insisted that “a varying number of things that have come together” prompted the exclusive focus on expansion as a business hotel.

“It’s just a number of variables out of our control that have affected us. When we really drill down, our core business has been in the hotel accommodation, food, and banqueting.

“We have done this for over two decades successfully, in my opinion,” he said.

Prime Minister Andrew Holness, who participated in the groundbreaking ceremony in June 2021, said the development was a vote of confidence by investors in the economy.

Construction has been among the most buoyant and resilient sectors of the Jamaican economy – even in the heights of the pandemic – but real value added for the industry contracted by 4.2 per cent in the April-June quarter, the Planning Institute of Jamaica said in August.

Total sales of construction inputs contracted by 13.6 per cent in real terms.

Hussey said that the expansion was not an “overnight decision” but a well-researched project buttressed by local surveys and in-house data from Terra Nova’s resort development programme system which tracks reservation revenue services to determine market feasibility.

He said international data were also used. But the preliminary reviews, he said, did not account for economic headwinds such as “worldwide interest rates going up significantly” or high inflation.

Veteran real estate agent Wayne Stewart had disclosed to The Gleaner last month that Coldwell Banker had received offers for 34 of the 61 units available and said that an additional 27 could have been taken off the market with ease.

But Hussey said the scrapping of that aspect was a safer bet.

Citing confidentiality between the family and its bankers, he declined to disclose the project’s financiers or say whether they had expressed concerns about the luxury residence investment.

The pullback is expected to affect the scope of the construction, Hussey confirmed, adding that “it definitely will be less than 14 levels, no doubt”.

Two lower floors and the subterranean level have so far been constructed.

He offered no clear timeline on when the initially planned two-year project is expected to be completed.

“It is anticipated that over the next few months, we will have to realign the new direction with the Real Estate Board (REB) going forward. They were in the process from the beginning and all the monies collected from depositors were held in escrow as required by the REB,” said Hussey.

The family disclosed in a media statement that the majority of depositors have been refunded.

The Residences at Terra Nova offered 37 two-bedroom units at US$537,800 each; 13 one-bedroom units at US$402,600 each; three 3-bedroom units at US$902,150 each; and eight penthouse suites valued at US$1.62 million-US$1.73 million each.

kimone.francis@gleanerjm.com