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Intercontinental Abandons Cayo Largo Resort
Sources say Intercontinental has pulled out its four employees left at hotel project, including General Manager Louis Philippe
By EVELYN GUADALUPE-FAJARDO
September 4, 2003
Its been a bumpy ride and now Intercontinental Hotels Group, formerly known as Six Continents Hotels, has decided to hang up the spurs.
Sources say Intercontinental has pulled out its four employees who were left at Cayo Largo Resort in Fajardo, including General Manager Louis Philippe.
"Intercontinental will now sit on the sidelines to see what will be the final outcome of the project," one source told CARIBBEAN BUSINESS. "The company is relocating its staff because it cant afford to keep paying salaries to people who are unable to perform their duties, even though it does have a management contract with owners Cayo Largo Hotel Associates."
As of press time Friday, CARIBBEAN BUSINESS had been unable to get comments from Thomas Murray, chief operating officer of Americas Intercontinental Hotels Group PLC.
The owners and partners of Cayo Largo Resort include Puerto del Rey Inc. President Dan Shelley, Gabriel Fuentes of Fuentes Construction Co., Diego Suarez Jr. of V. Suarez, and Manuel H. Dubon.
Intercontinental owns 17% of the resorts assets. If Cayo Largo Resorts legal issues are resolved and the current owners are able to keep the property, Intercontinental will have first dibs on managing it.
However, the Government Development Bank (GDB), which assumed the first mortgage of the resort, aims to foreclose on the property.
Rumor has it that major hotel chains such as Four Seasons, Marriott International, and Barcelo have expressed interest in the project. Even if true, the GDB isnt legally permitted to formalize any negotiations until the issue has been resolved.
In February, construction of the $120 million Cayo Largo Resort came to a halt when heated disputes arose between the local partners in the resort over whether to waive a guaranteed-maximum price (Gmax) contract on the project. A Gmax stipulates a contractors plans, costs, timeframe, and profit for a construction project.
Another obstacle was the expropriation of eight acres bordering the resorts main entrance and providing direct access to highway PR3, which the government allegedly was supposed to have completed as part of the closing deal.
This Caribbean Business article appears courtesy of Casiano Communications.