Last update: 10-Dec-2013 1:42 am
Tuesday, December 10, 2013
Trinidad & Tobago Guardian Online
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PSA to lose 15m in sale of La Fortresse
The Public Service Association (PSA) is now set to lose $15 million on the sale of the La Fortresse housing development at Long Circular, St James, which has been under construction since 2006. This was confirmed by PSA president Watson Duke, who admitted that the deal with DTL Property Developers Ltd had gone sour because of rising building costs. He said the contract signed by the former PSA president, Jennifer Baptiste-Primus, on August 15, 2003, had put the union in financial distress.
Documents obtained by the T&T Guardian showed that the 3.1769 hectares of land, formerly called the PSA Grounds, was leased for commercial use for the construction of 45 townhouses, 38 duplex units, ten tri-level units, an indoor sports and cultural complex, tennis court, swimming pool, office complex and a club house.
The contract agreement signed by Baptiste-Primus and executive chairman of DTL Daniel Lambert said the PSA would be given $45 million upon completion of the project. However, an addendum bearing the same date said $40 million has to be paid upon completion. But now the PSA is willing to settle for $25 million from the project, which is still incomplete.
Duke said the contract negotiated with the developers and the commissioner of state lands had put the PSA at a significant disadvantage, so much so that the PSA had decided to cut its losses. “Instead of waiting for the project to be completed in the next five or ten years, when $40 million is worth about $10 million, we decided to accept $25 million and get out of that relationship. This was agreed last December and the developer said he will approach a bank to get money to complete the project.”
Duke: Apartments will be completed in December 2013
On the basis of recent discussions with the developer, Duke said the apartments will be completed by December. Construction of the project started in April 2007 and was scheduled for completion by August 2008. He could not say how much money DTL collected from sale of the housing units.
“Our legal contract with DTL does not entitle us to know about that. Our arrangement was to collect $40 million at the end of the contract and that may take years, so we are willing to accept $25 million up front and get out of that deal,” Duke said. The Sunday Guardian obtained a copy of the contract which mandated DTL “to provide information to the union as it sees fit in a timely manner.” It said the PSA had accepted a proposal from DTL to “develop, finance, construct and commercialise its property.”
DTL also agreed to give the PSA one tri-level duplex upon completion, at no cost to the union. “The developer agrees that in the event that it is unable to complete the development for any reason, the union will be entitled to step in and take control of the development and deal with it in such a manner as it sees fit,” the contract read.
On March 11, 2011, Duke and other members of the PSA executive, accompanied by six police officers, entered the development and temporarily took possession of it. However, the PSA was threatened with a $150 million lawsuit by the developer, which was later quashed after negotiations resumed.
In an interview with the Sunday Guardian, former PSA president Jennifer Baptiste-Primus expressed horror that Duke was willing to sell the property for a mere $25 million. “I am dismayed and flabbergasted, something does not smell right here,” Baptiste-Primus said.
“Why would Duke reduce the income of the PSA? I don’t follow it, this is surreal,” she said in a choked voice.
She said the project was supposed to bring profit, but accused Duke of shutting down administrative structures. She said the contract with DTL was binding and Duke could not single-handedly decide to accept $25 million when this was not sanctioned by the PSA’s conference of delegates.
“The project at Long Circular was approved by the conference in 2003 and, therefore, any variation of that decision cannot come from the general council. It must emanate from the conference of delegates,” Baptiste-Primus said. She added, “When my administration ended in 2009, we left $7.5 (million) in liquid cash. We were in a healthy financial position, we owed no one, we liquidated the mortgage on the headquarters. “In four years’ time, what has Duke done with the $7.5 million?”
She explained that the PSA Management and Services Company Ltd was formed to deliver all services at Long Circular, but this company had failed to get off the ground. Asked why the project took so long, Baptiste-Primus said there were delays in getting approvals from the State. Former general secretary of the PSA, Oral Saunders, said Duke’s willingness to accept $25 million instead of $40 million was a betrayal of public servants.
“There are certain high-ranking officials of the PSA who cannot wait to get their hands on $40 million, monies which were supposed to go to membership. For Duke and his cohorts to accede to taking less than the $40 million is another betrayal and it shows the consistency of betrayal to the membership of the PSA,” Saunders said.
“Because of cost overruns the PSA is facing litigation suits from disgruntled homeowners for breach of contract. I really believe that selling the PSA property was a bad idea. The average PSA member has not benefitted.” He said in the last PSA executive election campaign, the La Fortresse development was one of the hot issues that led to Baptiste-Primus demitting office. “Public officers were dissatisfied with the manner that entire land issue was dealt with.”
Saunders said after the next PSA elections, due on November 25, the new executive will have a tough decision to make about the property.
Apartments now up for sale
Checks by the Sunday Guardian revealed that photographs of the gated La Fortresse townhouses were advertised on several Web sites including zfbhomes.com, T&T Real Estate Services and Property Quest Trinidad Ltd.
In a Facebook advertisement, the two-bedroom units were priced at $2.05-$2.1 million and the completion date was given as July 2013. The units were advertised as having granite countertops, porcelain floor tiles, electric cookers, 22 cubic-foot refrigerators, microwave ovens, washers and dryers, airconditioned bedrooms, a club house, pool and 24-hour security. The houses were painted blue with red roofs.
Meanwhile, PSA trustee Dimitrius Harrison said he was surprised that the incomplete units were being offered for sale, as all the units were sold by 2008.
“As a trustee, I have no knowledge of any sale of these units. If these units are to be sold, I have to sign off on it. It is something illegal if the PSA is not contacted, because we are the owners of the land,” Harrison said. “Those units were so scandalised in corruption that those who placed monies sought to get it back. Some of the homeowners have sent pre-action protocol letters for us.” He said it was possible that some units were now being resold.
“A lot of people who have invested have requested to have back their money. New people are trying to buy into the properties. Names are changing. There is a need to have the trustee of the PSA signing on the name change. Anything else is illegal,” Harrison said.
Vice president of the Real Estate Agents of T&T Stuart Spiers said it was uncertain what the land would have been worth in 2006 when the project started.
“Chances are the prices they negotiated in 2006 were reflective of land prices then, so it is difficult to speculate on whether they would have made a profit.” He said many projects such as One Woodbrook Place and the Shorelands project experienced similar constraints after 2008. Other agents and valuators, including Joel Lewis and Linden Scott, also declined to say whether a profit could have been attained if the lands were sold in 2006.
Contacted, general manager of DTL Property Developers Ltd Lucien Delpesh declined to comment. In an e-mail he said, “Many thanks for your interest. As a private organisation, DTL Property Developers Company Ltd has no comment to advance on any of the queries you have raised.”
Customers want answers
Several people who purchased the townhouses said they were dissatisfied with the slow pace of the project and the contractor’s unwillingness to provide answers. Dr Ranier Rahman said he bought two units before his marriage in 2008 and up to now he had no information on when the houses will be complete. “I paid 50 per cent of the total cost for one unit and 75 per cent on the second unit. I paid in excess of $2.75 million. “It is unfair and we deserve to know when the houses will be completed,” Rahman said.
One of the real estate agents who advertised the sale of the units said the developer had told her they would all be complete by Christmas.
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