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Spain-Based Group To Buy Martineau Bay Resort
Transaction could mean introduction of W hotel brand to Puerto Rico
By JOANISABEL GONZALEZ-VELAZQUEZ
October 14, 2004
A Spain-based group owned by a wealthy European family has signed a confidential agreement with the Government Development Bank (GDB) of Puerto Rico to buy the 156-room Martineau Bay Resort in Vieques.
"The parties reached an agreement a couple of days ago, and the group has already made a good-faith down payment," said a source related to the transaction. "Now, the group is looking for an operator, which could be [Starwoods] W Hotels."
Sources said the property could have fetched between $30 million and $40 million. They said the group has the resources to buy the property without the need of financing.
To make the Martineau Bay Resort project viable, the Tourism Development Fund, a GDB subsidiary, has invested $38 million, including a $27 million bond issue and a $10 million loan in 2000. GDB President Antonio Faria declined to provide details on the transaction but confirmed the agreement.
"It is my responsibility to honor the confidentiality agreement, so we cant provide further details. The party has 60 days to conduct the due-diligence process and complete the acquisition," said Faria. "Our efforts are aimed at the continuance of operations at Martineau for the well-being of the Vieques economy and the 150 jobs [the hotel] represents."
Faria acknowledged the hotel went through difficult times before and after opening last year. This year, however, it has been operating on a break-even basis.
In August 2001, the GDB initiated foreclosure proceedings to recover the governments $38 million investment. In January 2002, it filed a civil lawsuit against majority partner Martineau Bay Resort S.E., which was settled in 2003 after the GDB loan was restructured. The settlement allowed WyndhamResorts to manage the property and the hotel to open in February 2003.
Martineau Bay Resort stands on 43 acres of prime land in Vieques. It has 156 rooms with spectacular ocean views, a spa, a swimming pool, a business center, and 3,100 square feet of meeting space.
W Hotels is the newest brand of Starwood Hotels & Resorts Worldwide, whose portfolio includes more than 400 hotels in 70 countries. Considered a luxury brand, W Hotels has boutique-type hotels in some of the most important cities in the world, including Los Angeles; Chicago; New York; Sydney, Australia; and Seoul, Korea.
This Caribbean Business article appears courtesy of Casiano Communications.