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HDC Rescues Fairmont Resort Deal From Dissolving

Project threatened after Willowbend pulled out following 9/11


October 31, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

The Hotel Development Corp. (HDC), a subsidiary of the Puerto Rico Tourism Co., was required to rescue the $150 million Fairmont Coco Beach Resort & Spa by investing $15 million in order to get the much-publicized project moving.

As a result, HDC is a minority stakeholder in the project, for which construction is scheduled for early 2003.

The local government’s entry occurred when Willowbend Development LLC., who had an $11 million commitment in the project, pulled out of the deal immediately after the 9/11 attacks because it needed to preserve as much cash as possible.

Willowbend is the majority owner of The Westin Rio Mar Beach Resort & Golf Club in Rio Grande and is currently working with the owners of Coco Beach Golf & Country Club to develop 36-holes of championship golf and a clubhouse within the development.

In an earlier interview with CARIBBEAN BUSINESS (CB July 18), Jaime Durand, deputy executive director of planning and financial incentives at the Tourism Co., said the project needed more equity to move forward, either with the help of private investors or from the government.

According to Hector Mendez, president of the Government Development Bank (GDB), Scotiabank is the lead banking institution financing the deal with a $90 million loan, the Tourism Development Fund, a subsidiary of the GDB, is providing a $22 million subordinated loan, local entrepreneur Arturo Diaz is putting up close to 27-acres of land, and Fairmont Hotels & Resorts is putting up 15% of Coco Beach resort’s equity investment.

The Fairmont Coco Beach Resort will consist of a 400-room hotel, three restaurants, a condo-hotel, two golf courses, a clubhouse, tennis courts, spa, and casino.

This Caribbean Business article appears courtesy of Casiano Communications.
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