Priced out!
Published:Sunday | August 15, 2010 | 12:00 AM
Janet Silvera, Senior Gleaner Writer
WESTERN BUREAU:
Approximately 25 per cent of the local duty-free industry has taken stores in the new Falmouth Port as Royal Caribbean Cruise Line (RCCL) pulls some 500,000 of their passengers from the Ocho Rios port in preparation for mega business in Trelawny.
The Sunday Gleaner has been reliably informed that a number of local companies that showed interest in the Falmouth shops have withdrawn as a result of the high rental agreement.
The merchants are being asked to fork out US$75,000 in advance rental, and another $75,000 in key money for a 1,000 square-foot store. In addition, they must sign a five-year no-exit lease and have in their possession a banker's guarantee of US$375,000. The term 'key money' is used synony-mously with normal security deposits, which are used to cover non-payment of rent and excessive damage to a rental unit. In this case, key money is going into building the project.
There is also an escalation clause, which takes effect annually, and this is estimated to increase by three per cent, which is the standard adjustment in most leases.
"And all you get is a gray shell (raw area) that will run approximately US$150,000 before inventory to fix in the manner that befits the standards," a merchant told this newspaper.
Spaces gobbled up
The local entities that have signed on so far include Bijoux, Tropicana Jewellers, Gem Palace, Gold Mines, Presita Shop, Colours and House of Diamonds, while another 12 souvenir stores have placed their signature on the dotted line.
The rest of the stores in the 68,000 square-foot space have been gobbled up by some of the biggest names in port and cruise shipping. They include the Swiss-owned Dufry and Diamonds International. Dufry controls about 1,000 stores in airports and stores throughout the world, and owns the brand Colombian Emeralds, while Diamond International has taken about six shops there.
Information gathered by this newspaper revealed that the 68,000 square-foot space is located on the ground floor and is dedicated to both retail and restaurant buildings. Additionally, there will be 20 kiosks and 36 craft market vendor booths. Some 40 per cent of the leasable space will be allocated to duty-free businesses.
According to RCCL, merchants will be provided with exterior doors designed to resist wind loads of 140mph in accordance with Miami Dade requirements. Each tenant will have to make his own improvements to fit his business needs.
The stores are required to operate four or five days per week with only two ships per week. The total number of calls per year will be 122 in 96 days, leaving the businesses without ships 269 days.
Efforts to get comments from Angelica Lopez of the leasing team proved futile, as Lopez said her supervisor needed time to respond to the questions posed by The Sunday Gleaner.