The Grenada government says it has reached an agreement with the True Blue Development Limited, the developers of the 147-room Kimpton Kawana Bay hotel project.
The resort was due to open in late 2021 and be operated by one of the world’s leading boutique hotel operators, Kimpton Hotels & Restaurants, part of the Intercontinental Hotels Group (IHG).
But the developers last year filed a complaint with the International Centre for the Settlement of Investment (ICSID). The Washington-based ICSID is an arm of the World Bank devoted to resolving international investment disputes against sovereign states.
“On assuming office, we felt it best to engage in negotiations with the owners of the Kawana Bay project and we are happy to report to this Honourable House that we have essentially reached an agreement, we have reached a settlement with Kawana Bay principals,” Attorney General and Minister of Legal Affairs, Claudette Joseph, told Parliament.
“The arbitration will be settled, and the property will be transferred back to the people of Grenada,” said Joseph, adding that the agreement “will be consummated during the course of this week.
“Before the week is up the agreement will be consummated and that agreement will again see the Kawana Bay properties which is just over five acres of land on the far end of Grand Anse beach again coming back to the people of Grenada, we will once more own that property,” she said.
Owned and developed by True Blue Development, whose major shareholder is a former ambassador at large to Grenada, Warren Newfield, the now incomplete tourism project on Grand Anse beach is a Citizenship by Investment (CBI) approved project.
Under the CBI programme, Grenada provides citizenship to a foreign investor in return for making a substantial investment in the socio-economic development of the island.
Joseph told legislators that in 2016 the then New National Party (NNP) government of then prime minister Dr Keith Mitchell transferred the freehold of the land to True Blue Development.
“And in transferring again nothing went into our Treasury at the time the freehold was transferred in real terms because what happened there was a conveyance and a mortgage.
“Essentially government loaned the True Blue company money and to buy the property from us. Government advance on the money and they take the same money and they brought the property from us. It was a really good deal, it was only 3.5 million dollars,” she said without disclosing the currency for the transaction.
According to legal documents for the arbitration matter on March 23, 2016, True Blue Development agreed to purchase the Flamboyant Hotel and Villas after the former owners had defaulted on their mortgage and the property was in receivership.
On May 23, 2016, the Grenada government granted Approved Project status under Section 11 of the CBI Act, giving True Blue Development the right to raise capital and solicit investors for the development of the project.
The Approved Project status also meant that citizenship would be granted to all CBI applicants investing in the project who successfully apply for and qualify to become citizens of Grenada under the CBI programme.
However, the project came to a halt in mid-2021 due to what the then government described as “discrepancies” in the companies’ records as it pertains to the CBI regulations. The developers then filed for an arbitration hearing with the Center in July 2021.
