Hard Rock’s principals present investment wish list

POSTED: 04/12/12 12:49 PM

Heyliger: “Nothing is a show stopper”

St. Maarten – The Council of Ministers met with the principals of Hard Rock Hotel and Casino on Tuesday as part of a familiarization tour the latter has made as part of discussions to purchase Simpson Bay Resort. Hard Rock’s plans include purchasing and branding the timeshare segment of the resort and constructing between 150 and 200 hotel rooms. Deputy Prime Minister Theodore Heyliger estimates the project would mean an investment of at least $85 million and deliver many new jobs, would give St. Maarten the prestige of being home to Hard Rock’s first branded time share property in this area.

Prime Minister Sarah Wescot-Williams announced the meeting during her general notifications during Wednesday’s Council of Ministers press briefing. She pointed out early on that though the Council of Ministers has been informed about the ongoing talks between Hard Rock and Simpson Bay Resort, the cabinet is not privy to the details of the ongoing negotiations.

“More information we do not have,” Wescot-Williams said.

Her notes for the press briefing add, “The group, no strangers to St. Maarten is confident that an eventual agreement will benefit them and the country St. Maarten. The Seminole Tribe is a sovereign entity in the state of Florida. Preliminary ideas hold promise of a development that would greatly contribute to our tourism product and St. Maarten in general. After these orientations, the representatives of Hard Rock will now submit a formal position to government that will include a request for government’s support for the group’s plans.” 

Tuesday’s meeting is considered the first step in a process and the principals of Hard Rock have committed to putting their “wish list” in writing and submitting it so government can examine whether the investment and its spinoff will add value. According to Deputy Prime Minister and Minister of Public Housing, Physical Planning, Environment and Infrastructure Theodore Heyliger the verbal wish list does not include a casino license or anything else that “out of the ordinary. Pressed for specifics Wescot-Williams said, “tax holidays and those types of things” was put on the table.

“They actually would not need to request a casino license. Simpson Bay Resort is already eligible for a license because they have sufficient rooms and the casino that is there now is a standalone casino. I am sure they have very smart lawyers who have already told them that they could have a license so it does not have to be part of the wish list,” Heyliger said.

Employment situation

Both ministers have put the entire discussion in the realm of what would be the overall benefit of allowing the investment. They also made it clear that the principals of Hard Rock had not indicated that the ongoing battle between the current owners/management of Simpson Bay Resort and the Workers Institute for Organized Labor (Wifol) is an issue.

“The employment matter is separate to the takeover. Simpson Bay Resort responsible for its human resource at this time and I am sure that the human resource is important,” Wescot-Williams said.

Heyliger added, “Hard Rock did not specify that employment situation was an issue. Nothing is a show stopper.”

Questions linking the takeover and the labor situation are prompted by an e-mail sent to the members of the Tenants Association Pelican Resort Club (TAPRC) on April 3, 2012.

“You may have heard rumors that another entity, Hard Rock International, planned to purchase the resort, and may hope that a sale might save the resort. Please be advised that this is just a rumor. No such agreement has been formalized. Also consider who would purchase the resort when the courts have made it clear they will saddle any subsequent owners with Wifol’s decade old labor contract? The court’s verdict not only deals a death blow to the resort’s finances, it effectively ends the possibility that a purchaser will swoop in to save the day,” Director of Simpson Bay Resort Owner Company Mark Miller states in the letter.

The prime minister and the Minister of Public Health, Social Development and Labor Cornelius de Weever also indicated that while the employment situation did not come up at Tuesday’s meeting, Simpson Bay Resort has indicated that they want an end to the ongoing labor dispute.

“That is up to them to negotiate. There is not much that government can say or do. It will take two to tango,” de Weever said.

“There is a desire to have this matter settled and we look forward to seeing action Wescot-Williams added.

That “desire to settle” on the resort’s side is focused on keeping some of Wifol’s members away from the resort. In an e-mail on April 3, after the Court in First Instance ruled in Wifol’s favor, Miller informed the member s of the TAPRC that the resort’s owners have pumped $5 million into the property already, that they cannot afford to put in more and the implementing the verdict will lead to either a closure of the resort or another special assessment for the members.

“We plan to appeal this verdict and request a stay of the order entered by the court. If the appellate court does not enter a stay while considering the appeal, the resort will not only accrue another $5, 000 per day penalty for non-payment (as the resort cannot pay the current verdict), but Wifol can file attachments against the resort’s bank accounts, which will cause the resort to immediately close,” Miller states in his April 3rd e-mail.

In a subsequent e-mail on April 6 Miller states, “If the appellate court does not freeze the verdict, whether the resort stays open or not is completely up to Wifol. If Wifol seeks to execute on the verdict as described above (i.e., by seizing the resort’s accounts) the resort will close. We trust that Wifol realizes that closure of the resort will detrimentally affect its own members and the island as whole, and will therefore not take an action that will close the resort. However we do not speak for Wifol and cannot predict what they will do.”

Miller also states in his April 6 e-mail that he members of the TAPRC will be provided with “some” advance notice if the resort is forced to close. This will be so affected members can make “alternative plans.”

“We cannot guarantee how much notice we will provide, since we don’t know what action Wifol will take, but we wanted you to know that providing adequate notice will be one of our top priorities. We would like to minimize the disruption compared to the last time that the resort closed,” Miller said.


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