Press Release

The Chaguaramas Hotel and Convention Center has NOT been sold

The Chaguaramas Development Authority wishes to clarify several

inaccuracies related to the Leasing of the Chaguaramas Hotel and
Convention Center as reported in the media.
The Facts
1. The Chaguaramas Hotel and Convention Center has NOT been sold
but is leased for 30 years.
2. The Chaguaramas Hotel and Convention Center is in dire need of
restoration and loses TT $ 0.4 million dollars annually.
3. It will cost in excess of TT $200 million dollars to refurbish and
upgrade the property into a four star hotel.
4.

A significant portion of the property is deemed unsafe and

uninhabitable.

5. The financial burden on taxpayers has been going on for over 15

years.
6. For several years no investor wanted to assume responsibility for the
huge sum which was required to be invested given the state of the
building.

7. In 2009, the CDA at that time applied to the then Cabinet for TT $49
million dollars to refurbish and repair the Chaguaramas Hotel and
Convention Center. Only TT $1.0 million dollars was provided, far
short of the urgent requirement.
8. After an exhaustive search and stringent process, an investor who is
solely responsible for refurbishing and upgrading the property and
preserving its architectural history qualified for a 30 year lease in the
amount of TT $ 30 million dollars.
Critical to this discussion is the fact that The Chaguaramas
Development Authority Act states that the principal function of the CDA
is to secure the undertaking of, the laying out and development of
the North-West Peninsula. Part of our development mandate
involves the management of land and property assets and the leasing
of land as guided by section 14 (4) of the CDA Act.
Notwithstanding the provisions of this section but subject to
section 16 nothing in this Act shall be construed so as to permit or
empower the Authority with respect to any land in the North West
Peninsula (the subject matter of a Vesting Order) to alienate the
freehold or grant leases for a term of more than thirty years with an
option for a further term not exceeding thirty years, except with the
consent of the President.
In light of the above, two things are clear:
1. Land in the Chaguaramas region cannot be sold.
2. The CDA has the authority to lease lands for a period of thirty
years.
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The CDA currently owns and operates the Chaguaramas Hotel and
Convention Centre (CHACC) which is located on the Peninsula. In 1999,
the CDA conducted refurbishment works on the building, however to
date, the overall condition of the property has significantly
deteriorated.
The Chaguaramas Convention Center is a dilapidated facility in dire
need of repairs. In 2009, the CDA applied to the previous Cabinet for
some TT $49 million for the refurbishment and upgrade of the CHACC.
TT $1 million dollars of government funding was allocated in response.
This fell far short of the required financial input. In the meantime, the
CHACC continued to be a drain on the coffers of the CDA. The current
short term tenancy masks the true financial position of the hotel, which
has an increasing annual deficit of TT $ 0.4 million. According to an
independent assessment undertaken by the CDA, during the period
2012 to 2014, a significant portion of the facility, particularly the
unutilized section of the building is in dire need of repairs. The property
is unsafe and unfit for tenancy.
In the past, several attempts were made by the CDA to operate and/or
secure private investors for the development of the hotel. From 2002
to present, there have been a number of short term tenants, however,
as articulated in the CDA Act on the management of its assets, the
overall objectives of a self sustainable viable operating model for the
hotel, has never been achieved.

On 5th February 2013, an invitation was issued in the public domain

(Express, Guardian and Newsday) seeking proposals from qualified and
experienced developers/investors for the refurbishment/reconstruction
and operation of the Chaguaramas Hotel and Convention Centre.
The original advertisement provided May 31st 2013 as the deadline for
the submission of proposals. The deadline was extended to 29th July
2013. A total of four companies expressed interest but only One (1)
submission was received, but did not meet the qualifying requirements.
Thereafter, several advertisements were placed in the media, in
magazines, and attempts were made through foreign Embassies to seek
prospective developers and investors. No investors committed.
The underlying issue is that CDA is not a hotel operator, and as such,
purely on the principle of competitive advantage, the Authority cannot
as an entity succeed in the management and operation of the hotel
particularly given its mandate and business model.
In November 2013, the CDA received an unsolicited expression of
interest from an international Hotel Management Company to provide
hotel management services, consumer and business sale
representation. This model however required capital funding from
another entity.
As such, the CDA recognised synergies between the unsuccessful
proponent mentioned above and the Hotel Management Company,
and facilitated introductions between the two entities.
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The CDA also extended an offer to the National Insurance Board of

Trinidad and Tobago to provide capital funding for this project. The
proposed collaborative approach was not successful.
In July 2014, the CDA received a preliminary proposal from another
local investor/developer. After a comprehensive review of their
proposal, the CDA saw the need for a Hotel Management Operator and
facilitated introductions between the prospective investor and the
international Hotel Management Company. The following are key
highlights of their joint proposal:
1. Based on the future recreation and tourism products to be
developed in the Chaguaramas region, there was a need for a Hotel.
2. The existing Hotel and Convention Center was not viable in
terms of cost and revenue.
3. The structure, design and configuration of the building were
unsuitable for a modern four (4) star hotel and would require large
scale investment to bring the structure to international standards.
In determining the terms and conditions of a prospective lease
agreement, the CDA received advice from PricewaterhouseCoopers
who reviewed the independent reports and all other financial
information and advised as follows:
1. The CDA should consider the grant of a 30 year lease, TT $30
million in lump sum premium payments, in addition to a rental
payment of no less than TT $15k per annum, taking into consideration a
capital investment in the region of TT $200 million.

Following negotiations on the proposal, the CDA granted the investor a

30 year lease. The successful investor is required to develop, manage
and operate a four star leisure hotel, which will support the future
recreational, and tourism products within the peninsula at no cost to
the CDA.
At the investors own cost, the restoration of the St Chads Church and
internship programs for students for the Trinidad and Tobago Hotel
Institute and the University of Trinidad and Tobago are among the
benefits to be derived. This is consistent with the CDAs mandate for
balanced development.
All development in Chaguaramas is premised on the essential condition
that every investment produces a real benefit to the national
community and no investment must ever be a burden to the taxpayer.

Kizzie Ruiz
Communication Manager