by Leon O Taylor
Mt Hartman and Hog Island have long been jewels in the crown, of government’s plans for the islands’ tourism development, from the time Grenada returned to democracy in 1984.
However, the record of the attempts to develop Mt Hartman and Hog Island demonstrate that lessons are not learned in Grenada, and that locals with experience in development are never consulted at the start of the process. Rather, the government’s strategy for development has been to depend on the arrival of Big Daddy Warbucks from overseas, to do what Grenadians should do.
Project Number 1: A New Name
The first attempt at development of Mt Hartman occurred around 1987, by a young Middle Eastern gentleman, who never got further than deciding he didn’t like the name Hog Island. He thought it wasn’t suitable for a resort, so he sponsored a mail-in competition in the West Indian newspaper, consisting of coupons to be filled in with a new name for Hog Island and mailed to a PO Box.
No one knew the results of this promotion, because the gentleman disappeared shortly after the notice appeared in the newspaper. He did leave Mt Hartman and Hog Island in its pristine condition, and also left behind a small single engine plane.
It is reported that this plane was to shuttle government ministers to Barbados, to connect to international flights. However, it was never clear if the plane was given to the Government of Grenada, or to a minister of government, and its fate is unknown, having one day disappeared and never again spoken of.
Project Number 2: Intercontinental
In 1999, Hog Island (81 acres) and Mt Hartman (240 acres) were sold freehold to an investor group headed by a Washington lawyer called Ekram Miller, for US$7 million, of which payment of US$3 million was to be deferred. The government held a mortgage over the deferred amount which was interest free.
The project was to develop a golf course and a 200-room hotel (the Ritz Carlton) with resort villas and a 10-slip marina. A first option to purchase the dove sanctuary was granted Miller. The government also guaranteed a US$6 million loan from Fortis Bank of Belgium, for the developer to design and install the infrastructure of the development, which included building a bridge linking Hog Island to Mt Hartman. A flurry of activity ensued, with designs by a Belgian firm of architects and engineers, supported by a local architecture firm. These designs however were never seen by the public.
I was commissioned to carry out soil tests for the development. I did the tests on Hog Island because the testing could be done by backhoe, but the work for the bridge was extensive, requiring boreholes on land and on sea. The developer required a contract for the latter work, which I turned down as he insisted that the contract specify that disputes were to be resolved by litigation in London, which I saw as exposure I could not afford.
The project came to a halt when the developer claimed that Fortis Bank ceased to continue funding the loan because Grenada’s credit rating had deteriorated to the extent that the government could no longer guarantee the loan. Further activity on the project ceased, and in 2004 the government was ordered to pay off the Fortis Bank loan, plus interest, amounting to US$6,348,598, and sought to re-acquire Hog Island and Mt Hartman.
The developer was wise to insist that his contracts, including that for his freehold acquisition of Hog Island and Mt Hartman which he still owned, specify that all disagreements and litigation had to be resolved in London.
The reacquisition of Mt Hartman and Hog Island were arbitrated in London and while the outcome of the arbitration is not known, it was rumored that it cost the government a total of US$16 million to reacquire Mt Hartman and Hog Island.
At the end of this affair, and for all of government expenses, all that existed at Mt Hartman and Hog Island was scrub vegetation and an unpaved dirt road running from the entrance of Mt Hartman at the Grand Anse Valley road to the sea.
Project Number 3: Ritz Carlton
Subsequently, around the time preceding Hurricane Ivan, agreements were made with the Ritz Carlton Hotels to build a resort on Mt Hartman, but the nature of these agreements are not known. Nevertheless, announcements were proudly made by the government about the start of construction of the prestigious Ritz Carlton hotel at Mt Hartman.
Hurricane Ivan intervened and throughout the recovery period, the then Minister of Tourism constantly announced the start of the Ritz Carlton hotel at Mt Hartman. At the time I was struggling to restore LaSource Resort receiving no help from my investors, which included the Government of Grenada, and reluctance by the insurers to settle the resort’s hurricane insurance damage claim.
LaSource was Grenada’s leading resort, employing 240 Grenadians, in which the government had invested a stake. Yet here was the Minister of Tourism on TV, talking incessantly about the Ritz Carlton as the saviour of Grenada’s tourism, while never mentioning the need for assistance for LaSource to reopen.
Ultimately, the Ritz Carlton hotel turned out to be just like all its predecessors: a figment of the imagination. As usual, the developer blamed the government; the government blamed the developer. The only thing that existed was the unmaintained dirt road and scrub vegetation.
Project Number 4: Four Seasons
Around 2006 a new group appeared on the scene, representing the Four Seasons Resort. Or perhaps the group representing the Ritz Carlton had jumped ship to Four Seasons? The new Big Daddy Warbucks was Mike Pemberton, representing Four Seasons. Pemberton, who was also promoting a Four Seasons project in Barbados, reportedly paid himself handsomely for his efforts, to the tune of US$20,000 per month. It is unclear how, or for how much, but the Grenada government by this time had re-acquired Hog Island from its previous (failed) developer, except for a rumoured amount of US$16 million.
In a Deed of Conveyance dated 28 January 2008, the government conveyed Hog Island to Mt Hartman and Hog Island Estate Ltd, for a payment of US$6 million. An office was set up by the developers in L’anse aux Epines, and cars with the Four Seasons logo could be seen driving around.
A narrow bridge connecting Hog Island to Mt Hartman was built, consisting of a single lane with narrow sidewalks, while one would expect, given the level of development anticipated, that the bridge would at least be dual carriageway.
The project was delayed because of international concern by locals and international wildlife organisations for the plight of the Grenada Dove. The matter was finally resolved amicably and the extent of the dove sanctuary was agreed to.
However, the Four Seasons group became a casualty of the world recession of 2009, and the project was abandoned. All that remained was the narrow bridge to Hog Island, the use of which was now blocked by the government and the unpaved road running from the entrance of Mt Hartman and the single lane bridge
It is unclear if, how, when or for much; but it would appear that, once again, ownership of Hog Island and Mt Hartman reverted to the Government of Grenada.
Project Number 5: United Demi Group, Charles Liu
Enter the Chinese.
In around 2016, the United Demi Group of China, fronted by Charles Liu, proposed a billion-dollar project at the much-abused Mt Hartman National Park. After some exposure on social media, of a massive medical and wellness development at Mt Hartman, which included a proton cancer treatment facility promoted by a Chinese entrepreneur. I was invited to carry out soil tests for a proposed welcome facility of this development.
I was then able to see the computer-generated images of the development. The proposed development was both extensive and dense. It looked like a futuristic theme park from Star Trek, and was totally out of context with Grenada or any Caribbean island.
A new access was cut to the proposed welcome centre. I was able to visit the site of the welcome centre which was at the top of a high hill at the west of Mt Hartman, overlooking Secret Harbour. The site consisted of “tiff” rock, which posed no threat to construction All that was required of my services was to calculate the site’s bearing capacity, and review the plans for the welcome centre.
However, the project engineers who were in Canada, must have gotten hold of a text book on soil mechanics, and extracted a list of all the soil tests possible, and required these to be reported on for the site. In all my 50 years of technical consulting, this would be considered a wasteful and irrelevant to the site conditions, so I declined the request to execute the soil investigation.
Subsequently I learnt that the Chinese entrepreneur was arrested by the Securities and Exchange Commission (SEC) in the US, for defrauding investors responding to a call for investment in a proton cancer treatment centre in California. Liu and his wife had siphoned off two-thirds of the US$27 million they had raised from Chinese investors, seeking visas, never starting construction on the facility. Was this also their plan for Mt Hartman?
When the news of the Liu’s criminal activities broke in Grenada, the response of the minister in charge of the project was that the project would continue, as the charges against the Chinese entrepreneur were civil not criminal, and occurred in US courts, not Grenada’s.
The Chinese development at Mt Hartman nevertheless came to naught, and the project office was closed.
Project Number 6: “The New Chinese”
Fast forward to the present day. It is apparent that the Chinese development at Mt Hartman has been resuscitated. Based on the computer images circulating on social media, it appears to be the same “Star Trek design” that featured in the previous (failed) Chinese mega-project. There is no infrastructure existing at Mt Hartman, other than the dirt road leading from Grand Anse Valley to the Hog Island bridge.
As usual, construction at Mt Hartman has commenced with the simplest – and most destructive – activity: clear-cutting. A visit to the site on 26 August required travelling over the original dirt road which is still in a deplorable state. The site was fenced off and sported signs in Chinese, and some Chinese workers were to be seen. Large panels of the computer images of the proposed development were on display, the same as in 2017. It is unclear what is being constructed, but there is a large acreage of land being cleared, as shown in the photograph.
On 31 August 2020, Now Grenada published an article announcing that a new investor and management team were to continue the proposed development, under Grenada’s Citizenship by Investment (CBI) programme. Further, the proposed project would cost US$2.9 billion, and would extend over a period of 10 years in 4 phases.
The new project appears to be a reconfiguration of the plans of developer No 5, and includes a marina and a sanctuary for the Grenada Dove. However, these new plans are not available to the public. It is also reported that some 50 Grenadians would be employed in the first phase of construction. It is obvious that these would be in addition to a large compliment of Chinese workers.
There are no plans available showing the infrastructure required to support the proposed development. This absence casts serious doubts on the feasibility of the project, or if the developer seriously contemplates completing the project at all. For the reason that normally, the infrastructure must be in place, before any work starts on the construction of the hard elements of a project. The infrastructure required within and outside the Mt Hartman site will be very expensive.
It is also unclear, from the information provided in the government’s statement, the identity of this new group of Chinese “investors”. Whereas before, we at least had a name to go by, the current group have not been identified by the government at all. However, a little searching reveals that Grenada Resort Complex Ltd, the project company for Mt Hartman, lists 2 new directors: Marco Ma and Wenli Yao, both of Beijing China. No more is known about the identity of the people who are claiming that they will invest US$2.9 billion in Grenada.
Conclusion: What have we learned – or not?
This has been a long and depressing tale of failure after failure – one can only wonder at what cost to Grenadian taxpayers. What conclusions can we draw, and what lessons should we learn?
Firstly, Grenada’s infrastructure is totally inadequate to support a US$2.9 billion investment especially in Mt Hartman and causes one to ask the question: How is it possible for anyone to even conceive an investment of US$2.9 billion in Mt Hartman?
The road network serving Mt Hartman consists of roads that have existed for more than a century. They have been widened and paved but remain narrow, congested 2 lane roads serving both commercial and residential buildings with on-street parking. They are poorly maintained and structurally inadequate for the existing traffic. Further the technology for resurfacing them does not exist on the island. They are maintained by replacing the numerous potholes with bumps created by filling the potholes. Driving on them feels like being in a dinghy in a choppy confused sea. Electricity, water, ports, waste disposal – Grenada is already challenged in these infrastructure services. Who will create the extra capacity needed to service an investment of US$2.9 billion?
Concerns about infrastructure, or even the long-term viability of the project, may not be a major concern to the developers. This is because of the method of financing: CBI. Investors aren’t buying shares in a hotel; they are essentially buying a Grenadian passport.
In a traditional resort development like LaSource, a company invests in building the resort, and looks to make a profit over the economic life of the hotel. Not so in CBI-funded resorts.
Under CBI, there is a disconnect between the short term (building the resort), and the long term (operating the resort). The developer’s main interest is in selling passports, building the hotel, collecting handsome fees from the sale of passports and moving on. What happens to the hotel subsequently is of little concern to them; they’ll be off tilting at more CBI windmills.
Which brings us to the third lesson we should have learned, but appear not to have. Like a father might say to his daughter: don’t walk off into the sunset with the first suitor that appears on your doorstep – be a little selective. In our haste to attract Big Daddy Warbucks, we have consistently put our faith in saviours who have turned out to be nothing but failures, or fraudsters. Someone turns up in a private jet, and the red carpet is rolled out.
How about conducting public consultations before deciding on the wisdom of the proposed major investment followed by real due diligence, or even competition, to attract the best project developers, ones with a proven a track record of performance, and not just someone owning or renting a private jet?
Further, given the history of major investments in the island’s infrastructure and of successful investments undertaken mainly by local entities in the 20 year period following Grenada’s return to democracy in 1984 and the advent of hurricane Ivan in 2004 which resulted in major growth in GDP and a Debt to GDP ratio of 79.5% (the latter a target slightly above that set by the IMF in 2017), why is it now that there is little or no investment in infrastructure and that the only way the government can create investment in the island is by the sale of passports via the CBI programme?
On the other hand, I am sorry to say that if there is one thing that the history of failed CBI projects has taught us is that the CBI scheme of investment is something that every Grenadian should be vary of.
The key to creating local investment lies in having access to financial institutions that exist for the purpose of creating and stimulating local investment. These institutions like the CPDF, CDC, CFSC and the LOME V convention no longer exist. If government wishes to encourage and foster local investment development, financial institutions must be created. The capacity of the GDB is too small to undertake any significant investment and foreign commercial banks are not suited to finance local investment as the experience of LaSource bears out.