Susan Gordon, Business Reporter
An artist's impression of the Sabal Silver Palm Clubhouse at Palmyra, in Rose Hall, Montego Bay. - Contributed
Jamaica's first luxury beachfront residential community, the Palmyra Resort and Spa Development at Rose Hall in Montego Bay developed by the Rollins and Family, has upgraded its 16-acre development into a condo hotel.
The revisions have added US$25 million to the development cost, which by Financial Gleaner estimates, puts values the project at about US$176 million (J$12.6 billion).
President of the Palmyra Resort and Spa development, Dennis Constanzo, said the adjustments on the project whose first phase was pushed back for completion from December 2006 to fall of 2008, was decided one and a half years into the construction.
The five towers in the original phase one designs have been reduced to three, making the development less dense and, according to Constanzo, more valuable.
But it is the construction of additional features such as restaurants, a 10,000-square-feet meeting centre, a children's camp and commercial laundry area that have absorbed additional costs.
Constanzo would not reveal the amended cost of the development, saying only that Caribbean projects normally require a 50-50 split in the debt to value ratio in the structuring of financing.
US$176 million cost
Palmyra has at least US$88 million of loan financing from National Commercial Bank, which would put the project cost at a low of US$176 million.
At the end of phase one, a total of condo 299 units including penthouses and 11 villas would have been constructed on the three towers. This is well below the 24 villas and 633 units originally planned for the five towers.
This first phase of the Palmyra is being developed on 9 to acres of land.
"Initially this was meant to be a residential condo product to have people buy in and rent out as they wished," Constanzo told with the Financial Gleaner in an interview at his Montego Bay office.
"As we looked at this we saw the success and we thought of helping the buyer so we upgraded," he said.
The new units, he said, would offer buyers a more attractive real estate investment from which they could profit, saying that the units would be more appealing to a rental market.
"We had to bring it up to the standard that a normal hotel guest would expect. The standard is completely different," said Constanzo.
Within the bigger US$25 million price tag, Constanzo said the laundry area accounted for US$3 million while the restaurant added a similar amount to costs.
Still, the Palmyra president said the price of the units would not be adjusted.
"Our pricing has not increased. People who got in early got the best price. Our pricing strategy has not been determined by the overall improvement of the project," he said.
Construction is ongoing on the third and last tower, which has 88 units, down from 105 units in the original plan.
The pricing on the units , which are fully furnished, ranges from US$400,000 to US$3.55 million.
When the resort was first launched in January 2005, the one, two and three bedroom units ranging from 716 to 2,181 square feet in size, were priced at US$300 to US$1.4 million.
Debra Derrick, director of sales for the Palmyra Resort and Spa Development at Rose Hall told the Financial Gleaner that sales were going well.
"The first phase is nearly sold out; 65 per cent of the second tower is sold out," she said.
susan.gordon@gleanerjm.com
