Receivers

Can the Receiver at Flag Luxury Resort find a new buyer?  The answer is yes, he can find a new buyer.  But, there is not a damn thing he can do with the buyer, except tell him to go and talk to Robert FX Sillerman, the owner of Flag Luxury Resort. 

I do not know if you heard JB Turbidy being interviewed by Iwande on Upbeat Radio on the morning news about ten days ago.  What Turbidy said concerned me.  He repeatedly assured Iwande that the Salamander Group of investors was looking forward to the appointment of the Receiver at Flag Luxury Resort by Credit Suisse because that would enable the project to be sold to a new investor such as the Salamander Group.  He seemed convinced that the Receiver had the power to sell Flag to his group. That is so wrong, that I wondered if he had any advice before he spoke.   

Turbidy is not the only one mistaken.  The various newspapers carrying articles on the topic continue to repeat that Credit Suisse has “assumed ownership” of Flag.  Nothing could be further from the truth.

Anguilla has had since 1974 a pure system of registered land titles.  It is called the Torrens system after its Australian inventor Robert Torrens.  This system exists in several parts of Canada, the Commonwealth, and the United States, as well as in Anguilla.  It is a system whereby all deeds, and all common law concepts of land titles and interests in land, are abolished and replaced by a Register kept by government.  This Register is the only evidence of title to land in Anguilla. 

One of the reforms of the Registered Land Act of Anguilla was the abolition of mortgages, and the traditional rights of a mortgagee.  A lender secures a loan by registering “a charge” over real property.  When a secured loan goes into default, the creditor has only two remedies under our Act. They are, briefly, either (1) to appoint a Receiver of the charged property; or (2) to exercise the power of sale by public auction.  If a loan is in default, the secured creditor must give a 3-months notice either (1) to appoint a Receiver, or (2) that the property will be sold.  He cannot do both in the same notice.  Let us look at these two remedies.

First, what does it mean to appoint a Receiver of land in Anguilla?  The rights and powers of the Receiver are set out in the Act.  These rights and powers may not be expanded by contract beyond those given in the Act.  A lender cannot make a borrower sign a debenture increasing the rights and powers of the lender beyond those given by the Act.  To permit otherwise would be to corrupt and distort the remedies given in the Act.  Every lender would inevitably oblige every borrower to vary the limited rights of the lender to give the lender the widest possible rights.  The law does not permit that. 

If a loan goes into default, the Chargee may give the defaulting borrower a notice to the effect that unless the loan is brought current within 90 days the Chargee intends to appoint a Receiver.  The law enables the Receiver only to go into possession of the property and to manage it.  The Receiver runs it for the benefit, essentially, of the creditor until the loan has been paid off.  On the satisfaction of the debt, the Receiver is obliged to hand the property back to the owner.  His rights and powers are limited to managing the property in order to ensure the income goes to satisfying the debt.  Under no circumstances can he sell it to another investor, regardless of what the loan documents say.  He can sell nothing except in the ordinary course of business, eg, the sale of food in a restaurant.

A secured creditor has one alternative remedy under the Act.  That is the right of sale by public auction.  He no longer has the traditional remedies of a mortgagee under the common law.  The holder of a mortgage under the old law used to have the “right of forclosure”.  Forclosure gave the mortgagee title to the property, subject only to the right of the borrower to pay off the loan and get title back.  The holder of a mortgage used to have the right to go into possession of the property and to sell it to satisfy the debt.  He could sell by any means, once he tried his best to get the full market value.  That power of sale included the right to sell by private treaty.  That remedy has been abolished. 

The rights and powers of the lender who holds a mortgage charge are set out in the Act.  These rights and powers may not be varied except to the limited extent permitted by the Act.  The right of sale is, essentially, to appoint an auctioneer to sell the property by public auction.  No private sale is permitted.  The remedy of sale is given only to the holder of a charge exercising the right of sale as a chargee.  That right does not extend to a Receiver, who has no power of sale.  A sale by Chargee has the advantage that it wipes from the title all remaining charges and liens.  The purchaser from a Chargee obtains a free and clear title to the property.

In the event that a Chargee gives a notice to appoint a Receiver, the Chargee must appoint the Receiver with the limited powers of a Receiver, ie, to manage for the benefit of the lender.  A Chargee may not appoint a Receiver and simultaneously exercise the right of sale by public auction.  If the lender/chargee wishes to change his mind and sell, he must give the defaulting borrower a second notice to that effect, with another 3-month grace period.  The creditor has to give 3 months in either case.  So that, if there is no revenue to make the appointment of the Receiver worthwhile, and the creditor decides to exercise the right of sale, he must give another 3-months grace period to that effect.  

Given that Flag Luxury has no significant income that I am aware of, I cannot imagine why Credit Suisse would have wanted to appoint a Receiver.  There would be no income for the Receiver to deal with in satisfying the debt owed to the lender.

In the unlikely event that the Receiver did find a buyer, and persuaded the defaulting debtor to sell to this buyer, such a sale would be a disaster.  It would essentially be a sale by owner.  Such a sale would leave the property bound by all the existing obligations registered against title.  A sale by the chargee/lender is much more advantageous.  Sale by the Chargee would wipe the existing obligations from the title.  A purchaser would obtain a clean title from the Chargee.  That advantage is lost if the Chargee permits or pressures the borrower to sell to a new purchaser.  The new purchaser would take title encumbered with all the other debts and charges.  No properly advised potential investor in these circumstances would buy from the Receiver or owner.  He would insist on buying only from an auctioneer, or from the government after compulsory acquisition.

          Is there something in all this that is a matter of public record and that I am missing?

         Just remember that Don Mitchell is a dead-out, retired, ex-lawyer, and nobody can safely rely on anything he says about the law.

Sweeping

The new administration has got to raise revenue and reduce costs. I figure they need all the help they can get. I make the following suggestions for increasing revenue starting with the most obvious and least controversial.

           'Sin taxes' always receive public approval and approbation. No one would object to increasing the duties on tobacco and alcohol. Anguillians consume far too much alcohol, anyway. It would be a significant health measure just to triple the duty on spirits, wines and beer. Tobacco is hardly a problem in Anguilla. Increased excise duty will make it even less so. And, don't forget lapdancing salons, cockpits, and dogfight rings. No more turning a blind eye to the main chance to maximise revenue!

           Collect property tax from the thousands of householders who have refused to pay it. Do not forget the fines associated with late payment. There is no need to prosecute everyone, an example of one or two prominent citizens should result in a flood of homeowners rushing to pay up. Perhaps, the Hon Mr Hubert Hughes can volunteer to be the guinea pig? That would be a real show of leadership.

           Disconnect the thousands of illegal water connections and prosecute the offenders for having stolen water. I do not approve of my tax dollars going to subsidise certain well-known North Valley and South Valley business men using the public water for free.

           Enforce the accommodation tax laws. Visitors to Anguilla pay the bed tax, and certain well-known local and foreign hotels have failed ever, and I mean ever, to pay the public revenue collected by them on behalf of the public into the Treasury. This is a form of licensed stealing, so long as Government continues to condone it.  If I were a law abiding hotelier, dutifully paying my bed tax into the Treasury every month, I would be particularly offended.

           And, please, don't tell me any stupidness about not wanting to “criminalise” poor Anguillians. These not-so-poor Anguillians have done it to themselves, no one is doing it to them.

           Remember, the new broom sweeps cleanest!

Sadness

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It is with great sadness that I report the following.  One of the many public complaints against the outgoing Anguilla Administration has been its gross over-emphasis on economic development at the cost of the under-development of our social services.  It seems that whenever there has been a choice between any of culture, social development, the environment, transparency, accountability or integrity on the one hand and the financial interest of the land developer on the other, the land developer won each time.  It appears to be the commonest complaint one hears both on the calypsos and on the opposition platforms.  Now, I hear a very sad story that I want to tell you about.  First, a little history.

Portrait of Dr SB Jones MD

Dr Samuel B Jones, famous as the first black medical doctor in the Leeward Islands, served as Warden, doctor, and Magistrate of Anguilla from August 1918 to May 1923.  He wrote the first published history of Anguilla, The Annals of Anguilla (1931).

Dr SB Jones OBE of Anguilla

During the time Dr Jones was in charge of Anguilla, the island experienced four consecutive years of drought, food shortages, a hurricane and a quarantine period.  The last of these endured for several months due to the presence of 400 contacts and 19 cases of mild smallpox imported from the Dominican Republic.  In response to the threat, Dr Jones built a quarantine station on the tip of the point of the Shannon Hill which lies to the north of Sandy Ground Bay. 

View of the point at Shannon Hill where Dr Jones built the Anguilla Quarantine station

All schooners returning to Anguilla bringing the annual temporary cane cutters from the Dominican Republic back to Anguilla were made to tie up to the great iron ring that still to this day remains cemented on the small cliff.  There, the crew and passengers were detained in quarantine until they were cleared of all infection and were permitted to join their families.  They were the 400 “contacts”.  Dr Jones ensured that no serious case of smallpox escaped from the quarantine station.  It is said that he built a fence across the Shannon Hill point, from shore to shore, and put guards at the gate to keep the men in and the girlfriends out.  No Anguillians died during the epidemic that raged in the islands around.  For his achievement in preserving the islanders from serious infection he was awarded the OBE.  The ruins of the foundations of the cottages that made up the quarantine hospital could, at least until about five years ago, still be seen there.  Now they have been bulldozed by some demented Philistine developer, and the site has gone back to its previous state of abandonment, but without the historic foundations.  There remained one link with Dr Jones’ historic achievement.

Bulldozed foundations of the quarantine station at the point of the Shannon Hill

The cottages that he built on the foundations at the point on the Shannon Hill were subsequently, when he finally lifted the quarantine, transported by truck and by cart to the top of Crocus Hill.  There they were installed on new foundations.  They formed the first wards of The Old Cottage Hospital.  Over the years, the original chattel house buildings were gradually replaced by the concrete and galvanized-roof buildings that are there now.

The back view of the Old Cottage Hospital

Anguilla’s hospital has moved on to its present location in Pope Hill where it is now known as the Princess Alexandra Hospital.  The Old Cottage Hospital buildings are presently occupied only by WISE and by the Anguilla branch of the Red Cross. 

The front view of the Old Cottage Hospital

WISE stands for Workshop Initiative for Support in Education.  The name rather conceals the purpose of the institution.  This is where Anguilla’s children who have behavioural issues, or who have chronic learning problems, come to complete their education.  Members of the public have equipped it with wood working equipment and metal working tools.  There is a modern, well equipped teaching kitchen.  Language and mathematics skills are developed.  Above all, there is shelter, care and concern showered on the students while they are there.  WISE is a division of the Ministry of Education, and is one of the most important social developments that have taken place in Anguilla over the past decade.  The management and staff of WISE are widely recognized throughout the island for their selfless devotion to, and love for, their wards.  Many of them have graduated and gone on to be productive and useful members of Anguilla society.

The WISE classrooms at the Old Cottage Hospital

Now, the school children tell me that members of a certain political party have promised the Crocus Bay Development people that, if they should win the upcoming general election, they will sell them the Old Cottage Hospital buildings.  The developers have, apparently, applied to some of these politicians for the property to be sold to them.  Once they open their villas for sale, they do not want the school to continue on their doorstep, so to say.  I am told that the original Old Folks Home on the grounds of the Cottage Hospital was turned over to the Fisheries Department when the old folks were removed to their new home at Pope Hill.  This building has already been occupied by the developers.  If this is true, there will be precedent for this proposed transfer.

The Old Folks Home at the Cottage Hospital, now occupied by the developer

Given what, in my opinion, appears to be the cattle-truck style of construction pursued by Crocus Bay Development, I doubt that there can be any question of a surplus bundle of money being available to the company for it to build a suitable replacement college building for WISE. 

The Crocus Bay Development

It is not clear whether any, and if so, how much of a campaign contribution was solicited or donated in exchange for this promise.  Given the presently apparently semi-abandoned state of the project, it is highly unlikely that there would be any substance to such a base thought.  As is apparent from the photographs, construction appears to be almost at a standstill.  On the Saturday I visited, there was one workman hammering away at the back of the site.  The fronts of the half-constructed buildings were covered with weeds.  It did not seem to be under active construction.  A July 2009 article in The Anguillian Newspaper quotes the owners as saying that the first of the buildings would have been available for sale last year.  The next seven were to be ready by December of 2010.  It would appear that things are not progressing as planned.  Even the website appears to be only partially constructed.

Weeds growing out of the front of the Crocus Bay Development, suggesting a degree of abandonment

Will WISE have to close down, or will they be able to remove their equipment, students and staff, to a new and adequate location provided to them?

Whatever the fate or fortune of Crocus Bay Development, if there is any substance to the story of the imminent demise of our Old Cottage Hospital building at the request of a real estate developer and speculator, all those who are concerned ought to be ashamed of themselves.

Madness

What did Osborne and Victor think they were doing?  I was living in Anguilla in 1976.  I was the Magistrate.  I know, that makes me old.  More than that, it means I was present in 1978 when Emile Gumbs’ government adopted Anguilla’s first tourism policy.  With expert guidance, Anguilla studied the various models of tourism development in the region.  We came to the conclusion that the secret to success was to hold to a low-density, up-market product.  This policy was enthusiastically adopted by Emile’s government, Ronald’s subsequent 1980 government, and Hubert’s.  So, what happened to make us lose sight of the aim?

On 5 June 2007, Dr Aidan Harrigan issued a cautionary address when delivering the 7th Walter G Hodge Memorial Anguilla Day Lecture.  Everything was going well then, but he saw the danger.  That was six months before the present recession hit us.  He warned us at the time that the ten hotel projects recently approved by the Government were a disaster waiting to happen.  Do we remember the nature of the catastrophe that he warned awaited us?

Anguilla in the year 2007 was a tiny island with a population of some 10,000 souls.  We enjoyed full employment.  Our tourism plant then consisted of some 700 hotel rooms.  The rule of thumb is that approximately three employees are required to service one up-market hotel room.  All available Anguillian hotel staff were fully employed.  Hundreds of men were employed in the construction industry.  Thousands of men and women were employed in ancillary services, such as construction, drug distribution, massage parlours, music production, car rentals, agriculture, and fishing.  We thought we were doing well.

Executive Council next proceeded to consider approval of the construction of over 4,000 additional rooms.  They dealt with over a dozen major new hotel/condominium projects.  No independent Environmental Impact Studies were required.  These new projects were intended all to have been on stream by the year 2020. 

I actually get more than his ten projects, I get fourteen.  In alphabetical order, the ones I know about are:

1. Altamer Marina and Hotel expansion 164 units

2. Cap Juluca Cove Bay expansion        360 rooms

3. Crocus Bay Development                 50 rooms

4. CuisinArt Resort expansion              93 guest rooms and suites

5. Fairmont Hotel and Golf Course        730 rooms and suites

6. Flag Luxury Hotel & Golf Course       450 rooms

7. Frangipani Hotel expansion              50 rooms and 6 villas

8. Long Bay Development                   41 villas and 14 apartments

9. Rendezvous Bay Hotel expansion      450 rooms

10. Shoal Bay Development                 100 rooms

11. Seychelles Hotel                           Unknown

12. Viceroy Hotel on Barnes Bay          350 rooms

13. Viceroy Hotel on Meads Bay           Unknown

14. Viceroy Hotel on Savannah Bay      Unknown

How many Anguillian hotel development projects in the period 2006-2010 do you know about?

It is difficult to estimate the number of hotel rooms involved in these 14 projects that I know about.  Villas, units, and suites are multi-room accommodation units.  They involve any number of rooms.  Dr Harrigan’s best estimate was that, by the year 2020, Anguilla would be attempting to fill a total of 5,000 rooms.  Do remember that US visitors on average only come for a week at a time.  We would have to fill each of these rooms each week or two at the most.  These are double rooms, which means that 5,000 rooms could on average hold 10,000 visitors.  It does not take a lot to work out that we would have needed to find 15,000 hotel staff to accommodate them comfortably.  The pressure this number would mean on our schools, hospitals, roads, electricity, water, waste disposal, mortuaries, is unimaginable. 

The unsustainability of this approach is overwhelming.  Let us be honest.  We could not have managed it.  There would have been island-wide melt-down.  We simply could not have got 10,000 visitors into Anguilla, and out, every weekend.  American Eagle, LIAT and the Access Tsarina’s Anguilla Express would have to be working around the clock.  The present one-lady post at Customs at Blowing Point Port would have had to be multiplied ten times to deal with the traffic.

The impossibility eventually impacted even our leaders.  They put in place a moratorium on future hotel licences.  It did not last for long.  They then promptly proceeded to make exceptions.  For their friends only, of course!  All done with God’s blessing!

It is not correct to say that the recession rescued us.  The recession compounded the problem.  There was no accommodation for the needed extra 15,000 hotel staff.  Osborne and Victor hit on a solution.  They encouraged poor Anguillians to borrow heavily from the banks.  We were supposed to invest in building apartment complexes.  We would make our money from accommodating the foreign, imported staff needed to work at these hotels.  Then the recession hit.  There are no renters for the existing or planned apartments.  The apartment complexes lie empty.  Meanwhile, the bank loans had to be repaid.  With no income to make it possible.  The s*** had hit the fan.

That is where we are now.

Where do we go from here?

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Fairmont

Apartments

Illiterates

The gossip around The Valley was about the demand of Viceroy to bring in 70-odd Nevisians to complete the staffing of their Anguilla hotel.  Why Nevisians? you may ask.  Because Four Seasons Hotel in neighbouring Nevis trained hundreds of locals to run a hotel to the highest standard.  Four Seasons has been closed for a year.  It closed down thanks to Hurricane Omar.  As a result, there are hundreds of trained, unemployed hotel staff in Nevis.  Just 100 miles away from Anguilla.  What more obvious solution to the understaffed Viceroy Hotel than to bring the unemployed Nevisians to Anguilla?

The anticipated advantage for Viceroy was that they would be employing vulnerable, malleable immigrants.  At the slightest sign of stroppiness, or independence of mind, these foreign workers could be cowed into submission by threatening them with deportation.  That should keep them quiet!

The problem is that in Anguilla there are hundreds of young people who are out of a job.  They are demanding to know what their government is doing to look out for them.  Elections are around the corner.  Government was anxious to oblige.  The machinery of government was deployed in their defence.  Is that so wrong?

All that we asked was for our Anguillian youth to present themselves to any prospective employer in a reasonable light.  The problem is that the youth of Anguilla are unprepared for the job market.  The average Anguillian out-of-school young lady is tattooed from wrist to armpit.  She wears to the job-interview earrings that reach from her ears to her shoulders.  No one has taught either her or her brother how to handle a job interview.  Viewing the combination of her tattoos and earrings is guaranteed to frighten the s++t out of the average middle-aged, north-American guest at her hotel.  This makes her virtually unemployable.  Meanwhile, her brothers have lost the last trace of their parents’ Anguillian culture.  The present-day youth of Anguilla have been educated by BET jail-talk.  They speak a dialect, learned from US TV, that is closer to Folsum Jail prisoner-jargon than anything their Anguillian ancestors ever spoke.  They are generally unmannerly, semi-literate, and unprepared for the job market.  With their pants-waists dropping below their hips to reveal their dirty underpants, no employer, no matter how desperate, would ever imagine employing them.  They are, all of them, just not ready for the job market.  The average Anguillian High-School graduate is barely fit to be employed in the garden of a second-rate hotel, far less the front office of a Viceroy.

The joke of it all is on Viceroy.  As part of the deal for getting all the tax exemptions they were given by our generous, outgoing government, Viceroy had promised to have the necessary staff trained in time for the opening of the hotel.  They utterly failed themselves.  They dropped the training promise.  Such little training of Anguilllian staff as they provided, was perfunctory and last-minute.  The accountants who now run the hotel had decided that the promised training of Anguillian staff would be too expensive.  It would be cheaper to bring in Asians at one tenth the going West Indian rate.  Our government encouraged them to believe this was feasible.

They did not factor in the general elections that come every five years, and the ensuing upsurge in ‘patriotism’.  Sorry, it turns out that at this present time no imports are allowed.  An election has to be won first.

Good luck, Viceroy.

Golf

The big question in the tourism industry of Anguilla today is how long can Cap Juluca afford to carry the golf course?  Even Adam Aron’s backers will run out of money and patience one day.  You work out the math.  The figures were widely circulated a year ago when Flag Luxury Resorts was threatening to shut down the course.  It was said to cost US$6,000 per day just to water the grass.  That is US$180,000 per month.  There are other costs besides the water.  Another figure widely circulated was that Flag lost US$3.9 million on the course in the last year of operations.  That is US$300,000 per month.  And the story in circulation is that Cap Juluca has promised to keep the course open for up to six months.  Keeping that promise would cost them between US$1 and US$2 million in operating costs.  At US$225 per round, between 44 and 88, say 66, golfers per day will have to be found just to break even.  Given the uncertainties, it is not likely that many golfers are going to visit Anguilla for the purpose of playing golf.  Certainly, few will bear the burden of bringing their clubs with them.  Business will have to depend on the occasional drop-in.  The course will be lucky to attract even 10% of the numbers required to break even. 

It will have become obvious to Cap Juluca before the end of January that good money is only being poured after bad.

I don’t think Cap Juluca is in the charity business.

The well is never bottomless. 

We are reminded that the lunch is never free. 

And, Santa Claus does not exist.

I would not be so pessimistic if I thought this was anything other than a very expensive campaign contribution.

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Expect more

Cozumel

Is Anguilla turning into Cozumel without the water skis?  Besides the old canard of the value of our people, Anguilla’s principal resource is its famed beaches.  We will never be a Singapore or a Switzerland.  Those countries were truly without any resources save for their strategic locations.  They had something else to capitalize on, and to make their people rich and comfortable.  They practised a strict attention not only to laws but to rules and standards.  That is something that our spoiled and semi-literate Anguillian children have not attained in this generation.  So, given the special significance of our beaches in providing employment and attracting investment, we would expect that the authorities would do their utmost to attend to their safeguarding.  Anguilla’s beaches should be sacrosanct, dedicated to the public use, and with all private structures forbidden to be built on them.  This has actually been our government’s claim for decades.  So, it is important to express outrage when the rules are broken by one of us. 

Vehicles are not permitted to be driven on the beach.  If it is not a law, then it is certainly a well-publicised rule.  This rule is being broken more and more, particularly by locals.  Sandy Ground and Rendezvous Beaches are becoming more and more like a racetrack.  Visitors have the rule that it is illegal to drive a vehicle on the beach pummeled into them by all the tourist literature.  Can we locals not follow the same simple rule?

So, you can imagine my disgust and dismay when I saw this fellow streaking by in some sport vehicle, at full speed, and making a racket of noise, on Meads Bay Beach. 

It seems clear to me that no employee of one of our major new resorts would take it on his own to joy ride on the public beach like this.  One has to assume that he had been sent out by his supervisor to test fly the vehicle.  Maybe they are going to enter it in Le Mans next?

Of course, it may have been part of a conspiracy.  Perhaps he had been instructed to keep the beach clear of tourists between Viceroy Hotel and Frangipani Hotel?  Could it be that he was actually on duty, and not sloping off as I at first suspected?  No, I decided, too far-fetched.

I guess it was just sheer Anguillian slackness, and a few old tourists on the beach did not count.  Besides, it serves them right.  Who told them to come and pollute our beach with their sad presence?

At last, even the best of things must come to an end, and one must return to boring work.

In my humble opinion, this fellow in question should be investigated by the police.  If he has committed an offence, he should be prosecuted.  If not for what he did, at least pour encourager les autres.  He should next be fired from his job.  He should be given a job letter that makes him permanently unemployable in any part of the tourism sector.  Following that, management at Viceroy Hotel should call all construction staff to a meeting, and advise them that anyone joy riding on the beach will be summarily dismissed.  It is not only illegal, it brings the establishment into disrepute.  Then, every resort in Anguilla ought to be requested by the Tourism Department to do the same thing.

Does no one around here have any standards?

Tourism

I get really angry when I read an uninformed tourism promotion article about Anguilla.  If you are a real Anguillian, visit this stupid article.  In the breathless prose we expect from tourism industry advertising hacks, we are invited to “succumb to this island’s charms.”  There follows all the usual rubbish about “crystal clear turquoise waters”. 

Perhaps the most annoying part of the article is the nonsense about The People.  Apparently, our island policies have resulted in a prosperous population in Anguilla with a good education system and a proud heritage.  Yuck! Yuck!  For those of us on the front line, the one thing you notice in our schools is how totally uneducated our school population is.  There is no good education system “with a proud heritage” in Anguilla.  Our graduating children can hardly read or write.  That is a fact.  As for the prosperous population, I have a few unemployed friends I would like to introduce you to.

The author blithely reports that there is only one criminal in Anguilla, and he has been caught.  She writes that the last crime wave in Anguilla involved one young person who was responsible for a few break-ins and minor thefts that were a challenge to the island’s reputation.  His arrest, and the community’s disapproval, served as a lesson to anyone with similar intent.  Please, I want to puke!  Who fed this author on free meals and drinks?

This would be embarrassing if it was written by a blogger. But it was published by Macleans.  This is the Time Magazine of Canada.  It is embarrassing and unprofessional, and the author does not spel so good either!

The only thing that makes sense in the article is the advice that “if you don’t arrive on your own yacht or your own jet, you’ll have to travel via St Maarten”.  I can only conclude that Donna must be doing a great job of promoting our subsidized, very expensive, alternative transportation to Anguilla.

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Temenos

Anyone for Golf?  FYI, I have just been told that an announcement was made this morning at Cap Juluca.  They are backing out of the agreement to manage the golf course. Thought you might all want to know.

Okay, are we surprised?  Who were they trying to kid?  I suspect Cap wanted to ride in on their white horse and look good.  Now the MoA has been approved there is nothing to stop them backing out.  

If the story is true, real slimeballs!

What sort of protections did our Ministers put in place before they signed away all our revenue for the next 25 years?  

I would like to see Pam Webster come out with something on this one.

Flag Revival

Robert FX Sillerman’s back!  He may have told everybody that he has no talent in real estate.  But, he sure has talent for dealing with the government of Anguilla.  His team has recently put together a 30-page marketing presentation to persuade investors to take over the Flag Luxury Resort project in Anguilla.  The presentation reveals that in July of this year he concluded a terrific deal with government.  It brings him back in charge of Flag, and has breathed life into this failed project.  He is using this presentation to invite new investors in the Flag project.  The presentation tells us a number of things.  For one thing, from the cover we learn that the new project will be called Temenos Resort, Anguilla. 

1. Note the particularly disturbing news that we are now being described as “Anguilla, a British Protectorate”.  The last British Protectorate I know about was Palestine, and look what happened to that unhappy territory.

 

2. Page 3 reveals that it is really the same old project completely unchanged.

3. Page 4 indicates that the new investors will acquire $180 million of ‘first and second lien’ debt for $100 million.  No doubt that is clear to our US cousins.  Since “first and second lien debt” has no meaning in Anguillian law, I have no idea what they wanted to say.  I suspect they meant to say that Credit Suisse, and perhaps Sillerman himself, are selling out their charges cheap. 

 

Most extraordinarily from the same page 4 we learn that the “owners” have recently concluded negotiations with government for “a 25 year bed tax concession” which we learn is worth $98 million over the same 25 years!!  We knew about the tax concession, but now we learn the amount of the give away.

4. From page 8 it appears to be the same project.  It is just being refinanced.  With us giving them $98 million of public revenue to sweeten the deal!  No question of one acre of land being refunded.  I am glad we do not take responsibility for the golf course, as government was proposing at one time.  But still . . . accommodation tax is supposed to be a major part of our revenue.  Government has given up collecting it for 25 years.  How are they going to pay their public servants and other obligations?

 

5. Page 15 reveals that delivery of the first Temenos villa will occur in the last quarter of 2009.  Delivery of the last will be in the second quarter of 2010.  The hotel will be completed and opened in the last quarter of 2010.  So, it looks like full steam ahead.  Just in time for the upcoming general elections.  

There is one worry.  Since the US economy is not expected to turn around until the last quarter of 2011, I am not sure who is going to come forward to make this happen.

 

6. Page 16 is quite revealing.  It states that Mr Sillerman enjoys “a great deal of local support for the project”.  I have no idea what local support he could be referring to.  I rather thought that both Government and Opposition had publicly and repeatedly washed their hands of him.  

Anybody remember the Chief Minister’s actual words the last time on the subject of Mr Sillerman? 

 

Did you catch the bit at page 16 that Mr Sillerman has been granted permanent residence status in Anguilla?  The brochure claims this “is quite unusual for a non-native of the island”.  That is surprising.  I always thought that it was a precondition for being granted permanent residence status that you had to be a non-native.  I was also under the mistaken impression that every foreigner who bought a flat or apartment was more or less automatically granted permanent residence status.  Permanent residence status was invented by Ronald Webster back in 1980 as a convenience for every foreign home-owner not to be asked harassing questions by the youngsters of the Immigration Department when arriving in Anguilla to spend the winter.  Each person who buys one of the villas will be entitled to apply for permanent residence status.  Although, since government abused the status to additionally give citizenship rights, I hear they may be stopping it.  Is Sillerman mamaguying me, or what?

7. Page 22 contains some vital figures.  It calls itself “Key Financial Data”.  From it, we learn that some $200 million has to be raised to bring this project to completion.  We also learn that it will take the trivial figure of $40 million to buy out the existing lenders.  Credit Suisse has obviously agreed to lie down and play dead in exchange for $40 million.  Any takers?

 

It looks like the government of Anguilla was not joking when they announced a few months ago in the House of Assembly that they were thinking of ways to bail out this project.  Have you any idea what US$98 million represents?  That is more than a quarter of a billion EC dollars.  Some bail out!

No doubt, this development will be presented as a major triumph for the party in power when the upcoming elections are announced.  But, why have they been silent about the figures up to now?

Who said Mr Sillerman knew nothing about the real estate business?