FDR Pebbles, 2 more hotels on sale Bad loans land properties on DBJ's auction block

Dionne Rose, Business Reporter

More signs of the economic turbulence facing business in Jamaica are emerging with the decision by the Development Bank of Jamaica (DBJ) to seize and sell three small resort properties which, sources say, have been unable to pay off loans from the state-owned financing agency.

The Falmouth-based FDR Pebbles, recently rebranded as 'N' and which shares common ownership with the Runaway Bay, St Ann, property, Franklyn D. Resort; Ocean Sands in Ocho Rios, St Ann; and the Parotee in St Elizabeth, are the latest businesses to have been put on the market by the DBJ as it seeks to liquidate its bad-loans portfolio, which is believed to be a sizeable one.

Officials of the DBJ were tight-lipped about the details of the debts or the precise size of its non-performing loans portfolio.

"The Development Bank of Jamaica is unable to provide the information you requested because of banker-client confidentiality issues," said a prepared statement from the institution in



response to Sunday Business queries.

"We have been advised by the DBJ's legal department that this information falls within the exception under the Access to Information Act," the statement added.

The agency has, however, employed a debt collector - Ken Tomlinson's Business Recovery Services Limited - to recover what it is owed and who has, in turn, been advertising the properties for sale.

The DBJ is trying to recover more than J$1.4 billion from the property sales.

The 1.76-hectare or 4.36-acre FDR Pebbles is being sold for US$14 million (J$1.2 billion). The 100-room resort is the most expensive of the three.

FDR Pebbles is controlled by Franklyn D. Rance, who is still in charge of the hotel, well-placed sources say.

Rance rebranded the property as 'N' to go after a more eclectic and adventurous pleasure-seeking market, our source said. The hotel was originally marketed as at a family resort, but was closed in April for its rebranding as an all-inclusive nude resort.

Rance, who is also the chairman of FDR Resorts, did not respond to requests for comment.

According to information gleaned from National Land Agency records, the property on which the hotel sits was owned originally by a retired American businessman, Thomas Drake, and acquired for US$15,000 in 1998 by Northern Ventures Limited, a company in which Rance, John Issa, and Anthony Ferrari had ownerhsip, according to Companies Office records.

Issa is said to have sold his stake in the FDR property about a decade ago.

A US$2 million mortgage from the National Development Bank of Jamaica was recorded in 1999, and increased by US$750,000 a year later.

The mortgage was transferred in 2004 to the Development Bank of Jamaica, created out of a merger of the National Development Bank and two other state agencies.

FDR Pebbles has about 100 rooms and several restaurants.

The Ocean Sands Resorts, which is situated in Ocho Rios, is being sold for US$1.9 million (J$193 million). The property is controlled by Ocean Sands Resorts Limited, which has attorneys-at-law Ronald Cooper and George Magnus as its directors.

National Land Agency records show that in 1999, a US$380,106 mortgage was created on the property.

In 2007, with the DBJ's consent, the property was sold to the now -defunct unregulated investment scheme, Cash Plus Development Limited, for US$1 million, with a US$668,117 mortgage still attached to it. A 2008 injunction blocked the sale of the property until the court order was lifted last year.

Ocean Sands Resort, which is still in operation, has about 50 rooms.

The other hotel being sold, the Parotee, is a five-cottage resort near Black River. The asking price for the property is J$90 million. Sunday Business learned that the property is owned by M&M Corporation, the directors of which are attorney-at-law and former Member of Parliament for North West St James, Carl Miller, and family.

dionne.rose@gleanerjm.com