Contributed
Patrick Hylton, chairman of Harmonisation Limited, minority partner in Harmony Cove.
Chairman of Harmonisation Limited, handlers of the Harmony Cove luxury resort project, Patrick Hylton, is upbeat about financing for the US$2 billion project in the face of a global downturn, saying the project won't need to tap the browbeaten capital markets for funds.
"Remember, the time of the approach to any capital market would be some way off," said Hylton, who declined to comment on the status of the project.
But he also indicated that it was in the interest of investors for the global financial crisis to be handled expeditiously to unfreeze credit.
Deep pockets
If they don't: "Our partners have indicated they themselves have really deep pockets," said the banker.
Harmony Cove is a 2,400 property being developed under joint venture partnership with billionaire Joe Lewis, owner of the Tavistock Group.
Tavistock has a 51 per cent share in the development; Harmoni-sation, which is a state owned company that designed the project, owns the other 49 per cent.
Construction is to begin on the resort in 2009, starting with construction of some 2,000 rooms.
Harmony Cove is to be initially funded by partner Tavistock, through a US$100 million injection. According to the business model outlined two years ago, Tavistock would invite partners to take on aspects of the development.
Jamaica's major contribution has been in the form of land acquired by Harmonisation or associated agencies to facilitate the project. Harmonisation's spend on the early phases of the project amounts to some J$1 billion.
Harmony Cove's chief investor was himself an early victim of the financial crisis that began in the United States as the subprime collapse in mortgage related firms spread to banks that had bought up and collateralised the mortgage loans, before spreading across borders to Europe and Asia.
Lewis, a British billionaire, lost an estimated US$800 million on his investments in Bear Stearns earlier this year after the investment bank collapsed and was absorbed by JPMorgan under a Federal Reserve backed rescue plan.
The subprime crisis saw the banks reporting hundreds of billions of write-offs in 'toxic assets', a reference to the mortgages that had been rebundled in derivatives and sold, infecting the banking system along the way.
"We can't be in a crisis that long," said Hylton, himself a banker and president of Jamaica's largest banking network, National Commercial Bank, which reported that a portion of its assets were exposed but not at risk.
"Once the capital markets are freed up, then lending will start again, persons will be comfortable again with asset acquisition," he said.
Luxury residences
Harmony Cove is on a 10-year timetable to build 5,000 hotel rooms, an array of luxury residences and supporting amenities, multiple championship golf courses, an equestrian centre, water park, large scale marina with shops, res-taurants, and night clubs.
The initial plans also included a private international airport to serve the jetsetters expected to acquire homes in the luxury complex.
Tavistock has signalled that the master plan is subject to revision but has not said what aspects would be cut.
susan.gordon@gleanerjm.com
SOURCE: Financial Gleaner, Friday, October 31, 2008
