by Sandra C A Ferguson
It would seem that the caretaker for St Patrick’s East is seeking to ‘rev up’ support as St Patrick’s residents on the West side survey the disappearance of their beaches and threat to their property, believed to be the negative impacts of the breakwater(?) project that, obviously, was NOT properly planned and executed.
It really does not look good for her political compatriot who has asked his political leader for another chance to represent the constituency, so he could “finish what he started.” If the breakwater is anything to go by, that sounds SCARY! It is understood that nearly all of the majestic coconut palms have just toppled over as the beach disappeared.
The primary business of the Port Louis Marina is the business of berth rental for yachts and rental or sale of superyacht berths. We have noted that all the superyacht berths were occupied for extended periods during 2017, particularly after the announcement of the political leader that Santa Claus would be coming to town after the presentation of Budget 2018. Very good for the owners/operators of the Port Louis Marina. What spin-offs did this have in the Grenadian economy besides being a lovely photo opportunity to impress those who believe in Santa Claus?
In order to fully appreciate “the bustle of activity” at the Port Louis Marina, and assess what it is actually “delivering” to our economy, this article will take a peek at the following:
- The operations of a yacht charter company based in the marina.
- The operations of the owner and operator of the marina, Camper and Nicholsons Marina Investment Ltd through its subsidiary companies.
This information should aid in assessing whether the people of St Patrick should put their ‘pot on fire’ with the promise of a breakwater project to deliver a Port Louis type marina.
1. Living the Dream with Dream Yacht Charter
Business Grenada, 5 Star Grenada Special Edition, the glossy publication of the Grenada Investment Development Corporation (GIDC) for the 2016/2017 period, featuring one of the charter operators at the Port Louis Marina, provides an insight into the operations at Port Louis Marina and the possible spin-off on the Grenadian economy. A perusal of this article provides the following information:
- Dream Yacht Charter, the second largest charter company in the world, began operating out of the Port Louis Marina in October 2013 with 3 boats. In 2 years, the number increased to 23 boats – 700% increase in 2 years.
- According to the Base Manager, “the contribution to Grenada is massive annually – we have 20 boats and if we calculate at 50% occupancy for 6 months then basically that’s 240 charter weeks at 6 people per boat, so that’s about 1,440 people coming to Grenada as a direct result of our company.“
- How do these numbers spin-off in the economy?
- WHERE and WHO is feeling this ‘massive’ impact?
- Gross Sales Revenues 2015: Gross sales revenues “were an outstanding 5 million Euros (€).”
- Pre-paid Charters: However, the charters were pre-paid in other locations. So Grenada DOES NOT see any of that €1.5 million.
- Cost of Charters: Charter boats can range from US$1,700 per week to top-end crewed private charter boat of US$34,000 per week. How many of that crew are Grenadian?
- What do the Charters pay for ON island? Equipment for hire eg kayaks, paddle boards and provisioning services are paid for on island.
- Which Grenadian companies, if any, benefit from these opportunities? HOW MANY people are employed by these provisioning companies and what is the WAGE level?
- Tax Revenue/Service Level Agreement: Dream Yacht Charter Ltd is described as a ‘business based abroad’ and ‘externally funded.’ So, instead of corporation tax, a service level agreement stamp tax is applied.
- Stamp Tax: At a stamp tax rate of 0.075% (less than 1%) that is equivalent to €11,250
- Of Employees: A team of 7 employees provide technical, maintenance and cleaning services – ‘a growing team within a growing company.’
- Berth Rental and Docking Fees Paid to Camper & Nicholsons: The charter company has a contract for 17 berths on the basis of 60% occupancy. Docking spend is about EC$60,000 per month with Camper & Nicholsons. One can conclude that this rental is equivalent to EC$720,000 per year to Camper & Nicholsons. If there is an ‘overspill’ there will be ‘additional spend’ ie additional berth rental fees.
Dream Yacht Charter (second largest charter company in the world) occupying 17 berths at the Port Louis Marina:
- Gross Sales Revenue: generates business of €1.5 million (based on 2015 figures) from pre-paid charters
- Of Persons Purchasing Charters: An estimated 1,440 persons come to Grenada
- Government Revenues: Pays an annual stamp tax (less than 1%) – an estimated €11,250 (about US$12,600) on €1.5 million
- Employment: Employs 7 persons
- Local Spend: There are some local rentals of equipment and local provisioning.
- Camper & Nicholsons Berth Rental: An estimated EC$720,000 is paid to Camper & Nicholsons Grenada re berth rental.
- Camper & Nicholsons
Given that the Lagoon, the area occupied by Port Louis Marina is a significant natural, heritage and economic asset of we the shareholders of Grenada plc., it is useful to become aware of the arrangements agreed by the NNP administration of that period and the owners/operators of the marina. It is useful to also recall that the trustee of the nation’s assets is the Governor-General, at that time, Sir Daniel Williams.
2.1 Unresolved Questions re Deed of Release of 5 October 2006:
There are still unresolved questions in respect of the of the infamous Deed of Release of 5 October 2006, which is purported to have facilitated the transfer of the people’s property to Ambassador DeSavary’s Port Louis for EC$1 but is not registered in the Deeds and Lands Registry of Grenada because ‘it could not be found.’ Peter deSavary’s company then sold property to Camper and Nicholsons Marina Investment (CNMI), whose subsidiaries are the owners and the operators of the Port Louis Marina. It is understood that contracts were exchanged for US$24 million and purported to include water rights.
2.2 Lease Arrangement:
There is a lease arrangement between the Government of Grenada and Camper & Nicholsons in respect of the Lagoon.
- 99 year Non-cancellable Lease: An area of 25.88 acres was transferred to the control of Camper and Nicholsons Grenada Limited for a period of 99 years via a non-cancellable lease, with an option to renew for another 99 years. While the date of the lease agreement is 11 January 2008, it is effective from 5 October 2006. Note that date!
- Lease Rental: Rent is to be paid in arrears in monthly installments.
- Calculation of Rent:
- Certified Area: Rent is payable for certified area, ie any part available for secured berthing of vessels. Certified area does not include:
- Any part available/required/used for servicing and fuelling berths.
- Any other area of water space not used for berthing of vessels alongside jetties, pontoons or quays.
- Rent Payable for the first term of 99 years is as follows:
- $1 (ONE DOLLAR) per year from the execution of lease till any part of the Marina works was complete and available for secure berths of vessels. It is not specified whether this is EC$ or $US.
- US 3¢ per square foot . of certified area per year – for the first 25 years
- US 4¢ (US$0.04) per square foot of certified area per year – for the next 25 years.
- US 5¢ per square foot of certified area per year – for the next 25 years
- US 6¢ per square foot of certified area – for the next 24 years.
The Annual Reports of CNMI provide information in respect on the area of seabed and the area available for berth rental.
Port Louis Marina: Area of Seabed and Lettable Berth:
||Area in Square Metres
|Total Seabed Leased
|Berths for Rent
- Seabed Lease Rental Fees: Camper & Nicholsons occupies 50,000 square metres of seabed, but pays for less than 20,000 square metres – annual rental fees of less than US$6,000. The local fishers are excluded from using the Lagoon as a safe haven in times of extreme events.
- Berth Rental Income: Consider that the company earns from just 17 berths – EC$60,000 per month or EC$720,000/US$266,666.
2.3 Super Yacht Berths:
We are in the dark about the prices of superyacht berths or rentals. But we are quite sure that the rental income earned in respect of the berth occupied by the smallest superyacht exceeds MANY times over the US$1,714 annual rental re the ENTIRE certified area occupied by superyacht berths.
The following information was extracted from the Preliminary Accounts of 2008:
- Even before the superyacht berths were constructed at Port Louis, contracts had been agreed for the 30-year licences of 2 berths representing total revenues of US$0.4 million.
- These contracts were concluded at a price of US$2,000 per square metre, in line with management expectations at the time of the acquisition. In respect of long-term leases, all revenue is collected up front upon signing of long term licences.
Another reference to a September 2012, special offer of ‘two berths for one purchase’ on the sale of superyacht berths, twinning berths in Grand Harbour Marina in Malta and Port Louis Marina in Grenada noted as follows:-
“Whereas purchase of an individual 30m berth at Grenada would normally cost €355,000 and €810,000 for the same size berth in Malta, the double-berth package price is €839,214. This results in a saving of €325,786…”
2.3.1 Tax Exemptions:
In respect of superyacht berths, generous and extended tax exemptions apply to the transactions. Among those are exemption from taxes relating to the receipt of rents and profits from ‘land’ in the hands of subsequent purchasers. Superyacht berths are treated as real estate.
2.4 Lagoon Seabed Mortgage to the Bank of Nova Scotia:
In October 2008, Camper & Nicholsons completed negotiations with the Bank of Nova Scotia for US$25 million loan facility for construction of the Port Louis facility, secured against the people’s property. The Bank of Nova Scotia now also has a claim to the people’s property COURTESY the consents given in October 2008 by the then NDC Administration, advised, we assume by the then Attorney-General. A detail to also be aware of is the relationship between the bank’s attorneys and the holder of the position at that time.
2.5 Fund Raising and Debt Restructuring:
The Government of Grenada was not the only entity negotiating debt restructuring in 2013. There were “historic breaches of the Debt Service Coverage Ratio Covenant.” The company undertook initial fundraising of Sterling 4 million through an open offer in May 2013 in order to service and restructure its Bank of Nova Scotia loan in respect of the Port Louis Marina, facilitate business restructuring and fund working capital…”
- Dispossession and Alienation of People’s Property: It should be noted that the marina is also laying claim to an area of the Lagoon foreshore, what we call the Lagoon Park. Fishers have lost their safe haven and due to the prohibitive rates, yachties are anchored off Falaise and Mt Pandy, posing challenges to the health of our reefs.
- Government Revenues: Contribution to the government coffers is minimal.
- Employment: There is some employment, direct and indirect but one is not sure of the numbers.
3. Who is Minding the People’s Business:
The question that we the people need to reflect on is whether or not Grenada plc is getting its FAIR share from this investment in the Port Louis Marina. OUR property, transferred for $1, is tied up in a non-cancellable 99-year lease and is mortgaged to a bank. WHAT are the benefits deriving from this development? HOW are these benefits distributed in the economy and WHO is really benefitting? Is this ‘development’ really serving the best interests of Grenada plc?
4. The Promise:
This is ‘MOUTH OPEN, WORD JUMP OUT’ season! It is hoped that this information will provide interested persons with a little insight, BEYOND the façade of apparent glitz and luxury of the Port Louis Marina. What advice would we the people give to the Hon. Senator in her quest to secure a brighter future? Is the equivalent of a Port Louis Marina the answer for St Patrick? To ALL those offering themselves for office, they would do well to be reminded: All that glitters in not gold! The noise in the marketplace is not the sale! Do not confound caca poule with egg white! GRENADA DESERVES BETTER!!
 Conversion to cost per sq. metre – US$0.32/EC$0.86 / sq.metre)
 CNM’s two berths offer saves thousands – accessed December 2012