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Wyndham To Operate Martineau Bay In Vieques
Sources say a subsidiary of Grupo Cacho paid $9.3 million to buy out Rosewood 33% stake
By EVELYN GUADALUPE-FAJARDO
January 16, 2003
Wyndham International has been chosen to operate the 156-room Martineau Bay Resort in Vieques. The resort, newly dubbed the Wyndham Martineau Bay Resort & Spa, will officially open its doors Feb. 15, before the much-anticipated departure of the U.S. Navy from Vieques in May.
"As the largest U.S.-based hotelier in the Caribbean, we have a special affinity for Puerto Rico, where we now have seven premier properties," said Fred Kleisner, chairman & CEO of Wyndham International.
Wyndham owns, manages, and franchises more than 220 hotels and resorts in the U.S., Caribbean, Canada, Mexico, and the United Kingdom. In Puerto Rico, Wyndham owns El Conquistador Resort & Country Club in Fajardo, the Condado Plaza Hotel & Casino, El San Juan Hotel & Casino, and the Regency Hotel in Condado. It also manages Las Casitas Village at El Conquistador and the Wyndham Old San Juan Hotel & Casino.
El Conquistador Resort is Wyndhams biggest revenue producer; Wyndham Condado Plaza Hotel & Casino is the second, and Wyndham El San Juan Hotel & Casino is No. 4. With these three properties alone, Wyndham manages 2,499 rooms, more than any other hotel company on the island, and employs 3,300 people.
As of press time Monday, the Government Development Bank (GDB) and Martineau Bay Resort SE--majority partners of Martineau Bay Resort, including Roberto Cacho, Hector Hoyos, Joseph Fuentes, and six limited partners--were still negotiating a restructuring plan to settle a pending legal case regarding interest payments on certain bonds issued by Afica.
The Tourism Development Fund, a subsidiary of the GDB, had asked the court to issue an order requiring Martineau Bay Resort SE to make a $10.3 million mortgage payment. That amount corresponds to $9.6 million in principal and nearly $700,000 in interest accumulated up to August 2001.
The TDF also asked the court to declare it has a lien on a second, $10 million mortgage on the hotel; to order the sale of the property by public auction; to collect additional costs paid to maintain the rights over collateral; and to receive a payment of $1 million (equivalent to 10% of the principal mortgage payment) to cover costs, expenses, and lawyer fees during the case.
The legal dispute stems from a $10 million loan guaranteed by the TDF and made by Banco Popular de Puerto Rico to Martineau Bay Resort SE in July 2000. The money was to be used to finalize construction and purchase equipment for the resort, to pay interest on certain bonds issued by Afica to finance both the hotel and reserves required by Afica, to cover financing costs and pre-opening expenses, and to pay Rosewood Hotels & Resorts LLC, which had a 33% stake in the property.
According to an inside source, a subsidiary of Grupo Cacho Inc. (owned by Roberto Cacho, the managing partner of Martineau Bay Resort) paid $9.3 million to buy out Rosewoods minority stake in Martineau Bay Resort, which made it easier to find a new hotel operator. The local hotel investors now have a 66% stake in the resort.
The battle between Rosewood Hotels, a high-standard luxury hotel operator, and the local investors in Martineau Bay Resort, who were unwilling to relinquish control of the resorts development, began in May 2000. A disagreement arose then regarding who would pick up the tab for $15 million in construction overruns.
The owners of Martineau Bay reportedly wanted a five-star resort, but were unhappy with the exorbitant amounts they said Rosewood Hotels needed to spend.
The final legal run-in between Rosewood Hotels and the resort owners occurred in February 2001, when Rosewood sought a court order to give it access to Martineau Bay Resorts books. Rosewood then decided to pull out of its management contract, though it retained an ownership stake in the resort.
Another problematic issue being worked on, which was one of the original reasons for the resorts delayed opening, is getting American Eagle to fly to Vieques since the islands airport was certified to handle larger aircraft. The airports runway was extended and thickened to support the weight of the carriers aircraft and navigation, crash, fire, and rescue equipment was bought. The resort will initially be served by local charter companies Vieques Air Link and MN Aviation.
Construction of Martineau Bay Resort began in June 1998. The hotel was expected to celebrate a soft opening on Feb. 15, 2001. All of the guestrooms at Wyndham Martineau Bay Resort & Spa, perched on 42 acres, have ocean views and are decorated with Spanish and French accents. Guests will enjoy its private beaches, full-service spa & fitness center, water sports with nonmotorized equipment, two restaurants, bar and lounge, tennis courts, and meeting facilities that can accommodate 220 people.
This Caribbean Business article appears courtesy of Casiano Communications.