Harmony Cove casino report partners renewing agreement
HARMONISATION LIMITED has shelved plans to hire a project manager for the Harmony Cove casino resort development, but in the meantime, Chairman Jeffrey Hall says the “very complex project” is moving forward.
The Harmony Cove project, in which state-owned Harmonisation and Tavistock Group are partners, has been stalled due to lack of funding.
The project was conceived two decades ago, while the resort development has been on hold for over a decade, but Hall indicated this week that the partners have renewed their commitment to it.
“Harmony Cove has the full support of its partners to move forward. The parties have undertaken negotiations to update their agreements to address the current expectations for the financing and development of a world-class, integrated resort development. The negotiations are at an advanced and very promising stage,” the Harmonisation chairman said.
Details of the new agreement were not disclosed.
Since 2010, Jamaica has been trying to get a casino market going in Jamaica, but every effort to date has failed.
Harmony Cove was one of two projects approved in the first selection of preliminary developers, but none of the projects got off the ground in the stipulated periods.
Harmony Cove was originally costed at US$7.5 billion, according to government disclosures; however, Hall said while it will be one of the largest projects of its kind, the budget is currently under review. The megaresort will comprise a series of hotels and casino, golf courses, luxury spa, marina facilities, commercial developments, private residences and other amenities.
The law requires that investors first develop a stipulated number of hotel rooms prior to being granted the casino licence.
The government issues what it calls approved integrated resort development orders, or AIRDs, that are the precursor licence to the application for casino permits. The initial AIRD permit holders included Harmony Cove and Celebration Jamaica. The latter company’s founder passed away and the AIRD licence subsequently lapsed.
The last major update about Harmony Cove was made i n 2022, when the Government of Jamaica indicated that it was searching for a project manager for the resort development. Later, i n 2023, there were also advertisements for security arrangements, including drones and guards to prevent squatting and sand theft.
All project partners – which include Development Bank of Jamaica and National Housing Trust, through Harmonisation; and foreign private investor Tavistock Group – remain in place, Hall said on Monday.
Minister of Finance Dr Nigel Clarke, under whose ministry the casino project falls, did not respond to requests for comments on the current status of the programme. Back i n March 2021, Clarke indicated that the Jamaican government was still wedded to the Harmony Cove development,
saying then that “to the extent that Tavistock is ready to go, we will find a way for our portion to be met”.
In the original agreement reached in September 2006, jointventure partner Tavistock Group held 51 per cent interest in Harmony Cove Limited, while Harmonisation held 49 per cent. The agreement with Tavistock Group was amended in February 2009 to reflect contribution by Harmonisation, through subsidiary Silver Sands Estate Limited, of additional parcels of lands.
For the consideration, Harmonisation was to be issued with cumulative preference shares by Tavistock Group Inc in the amount of US$6.66 million.
In 2017, the DBJ disclosed having spent $1 billion on the project over time.
Then in 2022, Hall said that new sources of financing were being worked on, including a mix of sources which include debt, equity from the original founders, and third-party equity.
The Casino Gaming Act was passed by the Houses of Parliament in March 2010 and brought into force in June 2010 to facilitate Jamaica’s entry into, and subsequent regulation of, the casino gaming sector.
Later, amendments were made to the law after complaints that the conditions were unfriendly towards investors. The changes were meant to strengthen its appeal to potential investors, and by doing so attract more foreign direct investments, the government said at the time.
In the wake of those amendments, which included a reduction in the amount of investment required, the Ministry of Finance made another attempt to entice casino investors into bidding for new AIRDs nearly two years ago.
A declaration of an AIRD by the minister of finance is a precursor for an application for a casino gaming licence under Section 9 of the Casino Gaming Act. Nine AIRD applications were received by the deadline in March 2022. Nothing was said regarding approved investors. However at last report, due diligence was being conducted on Hard Rock Jamaica Limited and Inco Land Princess Hotel.
The Hard Rock Hotel & Casino development is a US$800 million project encompassing 1,100 rooms; while Inco Land is a US$500million, 2,000-room resort.
Harmony Cove has continued to receive promotion by the government as its own flagship AIRD.