Investors show interest in Palmyra

WESTERN BUREAU:

MINIMAL REVENUE and significant management costs were among the options considered by RBC Royal Bank and National Commercial Bank in making the decision to close The Palmyra Resort and Spa, sources tell The Gleaner.

Like a number of the properties on the elegant corridor, which experienced occupancy levels of less than 20 per cent during September and parts of October, the Montego Bay resort saw significant reduction in business, said the source.

"Caring cost was too high, there was inadequate revenue and not enough hotel rooms to sustain the property," the staff was told at a meeting on Wednesday. They were then advised that come midnight next Tuesday, November 8, the resort would close its doors until a new purchaser was found, the source said.

The announced closure comes weeks ahead of the start of the winter tourist season and four months after the two banks called in their loans from developer, Robert Trotta, who reportedly owed them in excess of US$90 million.

multitude of creditors

In addition to the money owed to the banks, there were a multitude of creditors calling the resort daily trying to get paid for services rendered. Reports are that it was costing the banks an average of US$1 million per month to maintain the 300-room property.

According to the source, C.B. Richard Ellis Hospitality Brokerage out of Canada has been retained to seek new investors for the resort. Their efforts are complemented by local real estate dealers, which include Coldwell Banker.

Already, eight potential investors have shown interest in buying the property which started construction in 2005, and an aggressive marketing programme is to be launched next week by the interim managers, led by receiver Ken Tomlinson.

In the meantime, it is understood that Trotta continues in his effort to find funding to pay out the debenture holders.

Trotta, in a press release in July, explained that the global recession had impacted the resort development. His group had invested more than US$100 million.

He said then that management had budgeted to finish the resort and ultimately pay back its lenders from proceeds of the condominium sales.

janet.silvera@gleanerjm.com