ST JOHN’S, Antigua – People could enjoy a duty-free shopping experience in Antigua at a mega-complex if the Mulberry Center Group’s (MCP) troubled EC $300 million investment comes to fruition.
MCP Director Jeri Benjamin revealed in an exclusive interview with OBSERVER Media that plans for an EC $12 million advertising campaign aim to turn the commercial centre into a regional shopping hotspot.
However, Minister of Finance Harold Lovell has warned of the potential impact on existing local retailers if the massive mall featuring discounted goods goes ahead.
Lovell previously said, “my only issue would be subject to the impact that it would have on the retail sector, but it is a project I support.”
Benjamin declined to disclose the identity of nine other leading members of MCP. She also revealed that a number of obstacles had been cleared – paving the way for the giant scheme – including forcing the government to drop their demands for EC $30 million to be placed in an escrow account as proof of their financial clout.
“I just thought that was so outrageous because that leaves us with $30 million set aside in a performance bond,” said Benjamin.
“We spoke to him (Minister Lovell) and I was not comfortable that we owed the government that payment,” she added.
Benjamin said through negotiations they convinced the government to first lower the amount, then drop it entirely.
It will be MCP’s first project, should it get the go ahead, and the funding will come from a company that is yet to be revealed.
“I am not at will to disclose the name of the investors at the moment; that information is before the government,” said Benjamin.
“The money is not going to come from within the group members. The money is going to be provided by the financier and it will be a composition of debt and equity financing,” she added.
The MCP director said the other directors are young Antiguans and include accountants, an interior designer and persons involved in a healthcare business. She said MCP began with three members in 2007.
Plans are for 40 per cent of the commercial centre to be occupied by an undisclosed entertainment complex and major retailer. Benjamin denied rumours that the retailer involved is Walmart – but would not disclose the name of the real retailer involved. Fifty-four other units will be available for individual businesses.
The complex will be 435,000 square feet and has been earmarked for 48.28 acres of land near the National Heroes’ Park.
Benjamin said her understanding is the government is considering a lease with option to purchase agreement.
She explained the aim is to capture shoppers that normally travel to Puerto Rico and St Maarten and capitalise on Antigua’s strength as a regional hub for Caribbean airline Liat.
(More in today’s Daily OBSERVER)
let me get this straight, the government is going to give duty free concessions to businesses that will sell to all us locals. Whats going to happen to there of antigua’s business? How can any business operate when the government creates an uneven playing field. Whats likely to happen is those with moeny who have buisness will open up shop in the new area and then simply transfer the goods down to market street. Its the only way market street and any other locations would survive, OR , they have to make the whole country duty free and charge 48% ABST on all purchases. The governemnt really needs to be forth comming with more information to the public on this deal becuase it doesnt sound good for the hardworking small business people of this country.
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it would be nice to see the first mega mall in the OECS.. if it does come to fruition pls antiguans dont boast about it..ok.. but why would such a huge mall be viable esp with a pop of 90 thousand.. the rest of the caribbean islands are well aware that antigua is a very expensive place to buy goods even if it will be a discounted duty free rates.. antigua is known for its high cost of living.. thats a fact.. perhaps the entertainment area may occupy most of that mall cause i do not see retail stores in that mega mall making tonnes of money monthly ..maybe its a little too ambitious .. if it was trinidad then i would def understand that this could work or perhaps jamaica…lets wait and see
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I just gave icesp a like tick,his statement is on point. As someone who has worked in the appraisal industry in NY for over a quarter of a century, and have had the opportunity to value a few centers in the pre-construction and operating stages, I agree with the minister on the impact on local retailers, but not on the escrow issue.
A 10% escrow is usually required from the general contractor as an insurance policy to bind him to completion, but to the developer all they have to give is a letter of credit from a respectable financial institution. The minister can do his due diligence,before signing the lease purchase agreement.
A regional center with two anchors is a big deal for a small place like Antigua, especially when one of the anchors is an entertainment complex. While shoppers from neighboring islands may come to Antigua instead of Puerto Rico, no one will come to Antigua to see a movie or see Rihanna.
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It’s good to hear of an ambitious Antiguan inspired and managed project, but what’s the business plan – ‘a massive mall featuring discounted goods’ is mentioned, plus 40% of the space will be an entertainment complex. This is in a nation with general retail prices comparable with Western Europe (ie high), a currency pegged against $US, and the vast majority of retail goods arriving on a ship from USA. Just how is this going to work?
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A development like that in 108 square miles with a population of 90,000? How many empty Malls have we seen around the Caribbean? Where is the consumer base for this? How will the shoppers from the Caribbean get here? On LIAT’s expensive inter-island flights? What market research has been done to show that Caribbean shoppers will come here instead of going to St. Martin, Puerto Rico and Miami? What will be the impact on existing business? There are a lot of questions that should be answered before the government signs over 50 acres of land to anyone, local or foreign investors.
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For icesp, your assumptions are those of a normal sane person but they may not be valid.
Projects like the MCG proposal are often based on principles that would bewilder the average person. A developer can come up with an idea, a dream if you like, based on next to nothing. This has all the hallmarks of a no money down speculation. There is nothing wrong with that if it is done competently. For example, Only after the developer obtains his permissions and leases would he then approach potential tenants using his paperwork to assure them of the viability of his proposal. Once he has some provisional agreements from prospective tenants he goes to the bank and uses them to get loans for the money he needs to start digging some holes in the ground.
That is what is meant by – “The money is not going to come from within the group members. The money is going to be provided by the financier and it will be a composition of debt and equity financing,” she added.
This is how really wealthy people make their millions and billions.
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Didn’t we go through something like this a while ago with a guy named Dato Tan Kay Hock?
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The problem I have with this project is the level of secrecy surrounding it. We need to know who is involved, where the money is coming from and what exactly they are going to build. Its time for some investigative journalism Observer, Somebody’s name has to be written down somewhere and we are counting on you guys to find it.
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Ok, I know there is a first time for every thing for every one.
Has anyone googled as an informal initial ‘due diligence test” Mulberry Centre Group…try it !
You see, nothing that relates even closely. In todays world that kind of money will have some form of internet presence and a facebook page is not what I mean, that is free.
Unbelievable !
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