The island of Caye Chapel, covering 265 acres off the mainland of the Belize District, has been sold to a consortium from Mexico that includes Belizean investors. Its previous owner lost the land to receivership five years ago, when he was unable to pay his loan with the Belize Bank, and it was listed as a non-performing asset until this deal was closed.
According to CEO Michael Singh, the confluence of BELTRAIDE’s plans for high-end tourism investment in Belize and the Bank’s need to get rid of the island led to a unique deal. He divulged more on the ownership group taking over the property, which already owns a recognized hotel in Ambergris Caye.
“The group that did the acquisition was a group out of Mexico. What I can tell you is that the group is made up of the owners of a resort in North Ambergris Caye called El Secreto, which is a very high-end resort that’s been getting very high reviews and awards lately.
So the owners of El Secreto are a part of the investment group and they have brought in some additional Mexican investors that are very large in developments in Acapulco, Mexico City and Cancun. So the potential for this group is very high because they have all the connections, they certainly have the available capital to invest and, of course, because of the connection with the Belize Bank, the Central Bank of Belize had to be involved very closely, to ensure that: number one the funds are coming from a legitimate source, that they have the capability of doing it, and also to approve the transaction, because this is now changing an asset on the Belize Bank’s books from a nonperforming asset and liquidating it, which is a good thing. It means that it strengthens their balance sheet.”
According to Michael Singh, the development plan for the island is being prepared, which would include a five-star hotel belonging to one of the major hotel brands, most likely the Four Seasons Group, but he anticipates that what is on the table is not expected to affect the environment insofar as the island is already developed.
“We are being told by the developers that they will be presenting to us a development plan, early in the year. Of course, that’s going to go through the full process, the Investment Sub-Committee. Cabinet is going to look at it. They’re going to have to gio through the PIA process.
The initial renderings that they showed us, it doesn’t seem to be anything that I think we would not to be able to go through, perhaps with some modifications.
Caye Chapel, as you know, is an already developed island. It already has an 18 hole golf course. The seawall is already constructed. There’s no dredging required, as far as I know. So the development on this would be a lot less high-impact, I think, than certain areas that are more in raw form.”
The purchase is in the range of BZ$20-$40 million but Michael Singh could not provide an exact figure. He indicated that the plan once presented must go through what he calls the “Hulse 5-Way Test”, the five-point criteria that measures environmental, economic and social impact. Here is why he believes this project will make the cut.
“It’s huge for us. We’ve been challenged to be able to bring in the type of brands that put us on the map, and if you think about the marketing program that these brands have, it actually adds to what the BTB already spends. So the halo effect of their kind of marketing will help all our properties, knowing that that sort of brand is establishing the quality that they have.
The other thing is, I think we sent out a release a few weeks ago about the S&P ratings on Belize that have improved. We’re almost at investment grade , and I will tell you that some of those things helped in the decision-making for this company to make an investment.
This investment will be very large. It will be a significant inflow of foreign capital, but they have to feel safe if the country’s safe, and I think we’ve done a lot in improving that image, BELTRAIDE putting out the investment magazines, being very transparent with information, being very engaging with the investors in a very transparent manor, through the Investment Sub-Committee.
I think we’re at a point now that people are seeing us as a real player.”