Statement by Dr. Ernest Hilaire on the Daher mall, the real story

17th June 2021

By Hon. Dr. Ernest Hilaire, MP for Castries South

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Today marks 5 years and 10 days after the holding of the last General Elections. Yet, Saint Lucians cannot be told when the next General Elections will be held. Three times before in our history has a Government gone beyond the fifth anniversary of holding elections. In 1979, the UWP under John Compton Government which was our first under our new Constitution which the UWP lost. In 1997, the UWP under Vaughn Lewis which the UWP lost and in 2006, the SLP under Kenny Anthony which the SLP lost. However, the House was dissolved and the polling date or the election date was announced by both Lewis and Anthony, before the 5^th year Anniversary of their Government. Whilst this Government refuses to call elections, the people continue to face increasing economic hardship, rising social tensions and unbearable emotional and psychological strain.

Meanwhile the Government continues to sign deals and make promises to investors which burden the people of Saint Lucia. Allen Chastanet and the UWP must act responsibly and not proceed to make commitments at this time. Parliament has one month left and it is not a time for more borrowing or for making commitments.

Let us take the example of the lease agreement made with Orange Grove Plaza Limited and the Government of Saint Lucia. Let us look at the context of this Agreement.

Immediately after the 2006 General Elections which the UWP won, the Government of Saint Lucia bought the abandoned Daher Mall for over $36 million! It was argued by Allen Chastanet then that this was a wise investment and Government will complete the building for office space. The total space of the building is about 280,000 square feet.
In 2001, it was valued that when completed the land and building would be valued at about $90 million.
The Building remained abandoned ever since, that is 15 years, with Government repaying a loan on its purchase. It means that Government would have paid over $45 million on this investment which was praised by Allen Chastanet, then Minister of Tourism.
In August 2020, the land and building were sold by Amazona Properties, a Government holding company to Orange Grove Plaza Ltd for $13.5 million. It means that Government has lost over $30 million, plus 11 years of interest, on that sale alone!!!!
The Government of Saint Lucia has now agreed after selling the land and building for $13.5 million, thereby losing at least $30 million, to rent portions of the second and third floor totalling 78,000 square feet. That means about a quarter of the space at a rental value of $313,624 per month for 15 years. This means $3.7 million per year. It means that our taxpayers will be paying $56.4 million in rent over the 15 years.
Moreover, we have to pay our portion of the utilities, maintenance and management of the land and building. The management fee for maintenance of the land and building is 10% of our portion.
We could end up paying over $60 million over the 15 years.
In effect, we lost about $30 million selling the building, then we pay out about $60 million in rental and maintenance. In the end we get 78,400 square feet of property.
Worse, Allen Chastanet told us that the space will be used for Call Centres!!! Imagine that. Not Government office space, not any statutory corporations, but a call centre. Now remember OJO Labs and Cabot. OJO Labs was given a building which was renovated and Government paid all utility bills and salaries for over 18 months. Does this mean that we will be renting all this space at $3.7 million a year for call centres. How long will they be there? Are we also going to pay the utilities, maintenance and management fees for these call centres? If they are to remain for the 15 years, are we really going to be paying over $60 million in subsidies for the call centres?
Now, I ask you to read Clause 2.1 of the Lease Agreement, which we can make available to you. It reads, “At the request of the tenant, the Landlords hereby leases and demises unto the tenant all the leased premises from the Commencement date with a moratorium on rent from the Commencement Date until the Rent Commencement Date for the Term provided that the Term shall not expire until all monies due and owing by the Landlord to the Republic Bank (EC) Limited or such other financier has been fully repaid.”
Does that mean that as long as the Orange Grove Plaza Ltd owes any financial institution we must continue to rent at the $3.7 million a year? If so, when will we ever be able to take ownership of the space? How can that make sense to us? Under what conditions, can we say no we will no longer continue to pay rent?
Finally, the SLP is asking why was NIPRO not used to purchase the property under the same terms and conditions? Why is another entity given the benefit of such a generous privatisation of a state asset and not an institution owned by the people?

In the final analysis the UWP administration used the people’s money to buy a building for $36 million, plus some 11 years of interest and then sold the building for $13.5 million. The Government then rented back part of the building at a costs of about $60 million over 15 years. What a sweet deal, which the people’s company NIPRO could not be given by our Government.

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