The Jamaica Observer is reporting that Sandals Chairman Gordon 'Butch' Stewart has agreed to drop all suits filed by his company Gorstew Limited against the three state agencies in 2005 for compensation for losses suffered over the Sandals Whitehouse hotel in Westmoreland, Jamaica.
Sandals Whitehouse is the property for which the Urban Development Corporation (UDC) in 2001 entered into a joint venture for construction with Stewart's holding company, Gorstew Limited, which also owns the Jamaica Observer.
Under that accord a tri-partite company, Ackendown Newtown Development Company Limited (ANDCo) was formed with the UDC holding 37 per cent, the National Investment Bank of Jamaica (NIBJ) 30 percent and Gorstew 33 percent. The joint venture agreement provided for a 20-year lease of the property upon completion of construction to Gorstew, which manages the hotel through its Sandals brand.
That construction should have run from July 2001 to December 2002 at an estimated cost of $60 million. However, disputes, delays and massive cost overruns pushed the completion of the construction to 2005 and the costs escalated to $117 million, an overrun of $43.3 million.
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