Prospect Reef purchase: CM responds to Criticism

Government's acquisition of the Prospect Reef Resort has raised criticism both from politicians and members of the BVI community. Nevertheless, at last week's sitting of the Legislative Council, Chief Minister Dr. the Hon. D. Orlando Smith responded to the criticism with clear and detailed answers. He pointed out that a good amount of misinformation circulating throughout the community sparked the criticism.

"We do not respond to threats. We do not respond to intimidation. We will not be bullied into compromising the interests of the citizens and residents of this Territory. Period", Dr. Smith said.

Chief Minister Smith opined that the decision to purchase Prospect Reef and transform it into a world-class Hospitality Training Centre was not a small idea: "it is a significant project based on a large vision for the future of our tourism industry and the role of our people in that industry, and like many big ideas, it has drawn its share of critics".

Since the acquisition of the resort, there have been quite a number of concerns for the employee's of the resort. According to Dr. Smith since 31 March, all of the employees have been paid their full severance and vacation pay. Dr. Smith pointed out that a combined team of the Departments of Labour, Immigration, the Social Security Board, the Management Company and his Office met with the employees to establish a workable solution to their severance pay and vacation pay entitlements (more about this on page 4).

The BVI Leader responded to the rumors that were being circulated about the timeshare issue by saying that "a great deal of attention and misinformation has focused on the issue of the timeshare holders. Among these comments was the unfounded charge that in purchasing Prospect Reef the Government of the British Virgin Islands was illegally expropriating property. Government’s position is clear on this matter. The issues at hand are not a problem between the Government and the timeshare holders; rather the issues raised are a matter between the timeshare holders and the person or persons with whom they had entered into timeshare agreements".

"The Government of the BVI purchased Prospect Reef Resort. It did not purchase every agreement ever entered into by the previous owners or operators of the facility. What the previous owners or operators did, remains their responsibility to address.  This is the essence of  ‘vacant possession.’ "

Dr. Smith said that government has carefully ensured that a thorough research was conducted before entering a purchase agreement. "Paramount in this was the importance of ensuring the integrity of the transactions". The Chief Minister emphasized that particular attention and emphasis was placed on ensuring that "no liability" was attached to the purchase.

Dr. Smith explained that Government is well within its rights to purchase Prospect Reef without incurring any liability from the previous ownership. "Let me make this perfectly clear, this Government will stand up for the legal rights of the people of the British Virgin Islands in all circumstances". 

A letter dated 23 February, purportedly written on behalf of the members of the Prospect Reef Resort Vacation Club, was sent to the Chief Minister on 11 March. That letter essentially presented proposals for Government’s intervention to resolve the Club members concerns, and threatened certain actions if they were unable to reach what they termed a “very fair settlement”. The Vacation Club acknowledged that their investment contracts were negotiated and concluded with a person other than the Government.

On 31 March the Chief Minister responded to the Vacation Club letter, and in that letter the Chief Minister pointed out that the Government had simply engaged in a legitimate transaction and that there is no legal nexus between the Club and the Government and therefore the Government did not and could not accept the Club’s claim that the Government, by entering into a valid purchase agreement, had expropriated the Club’s property.

Dr. Smith said that in the spirit of good faith, the Club was advised that the Government would do what it can to settle the matter in a friendly fashion.

He announced that the Club was advised to submit for Government’s study any documents pertaining to the interests of the Club and other persons concerned.

The BVI Government is still waiting for that document. This, the Chief Minister stressed, is a voluntary effort and must not be construed as an acknowledgement of any responsibility or liability on the part of the Government.

The Chief Minister stated that all outstanding debts owed to Government, and statutory bodies must be paid. In addition, assets of sufficient value must be turned over by the former operator to the government to make up for any expense incurred by the Government because of its intervention.