St Lucia: what odds for 1,000 horses?
Published on Jan 12, 2017, 9:00 pm AST
By Mark Wilson
A Royal St Lucia Turf Club with stabling for a thousand horses. A casino. A marina. A “Pearl of the Caribbean†development, with prime residential lots, villas, timeshares and apartments. A free trade zone right next to Hewanorra International Airport. And all close to a mile-long sandy beach, an offshore reef and a nature reserve on the rocky Maria Islands.
All this and more is planned for a three square kilometre site, just outside the town of Vieux Fort at the southern tip of St Lucia, with an eventual investment of US$3.0 billion by around 2040. That's knocking on for TT$20 billion—less than the cost of the CL Financial bailout, but still big money. If we're to believe the sales pitch and artists' impressions, it's looking good.
Britain's Prince Harry starred in a ground-breaking ceremony on November 25, on the St Lucia leg of his seven-country Caribbean tour. Construction is to start this year.
This dream development will be part-funded by St Lucia's passports-for-sale programme, launched a year ago. Subject to a few checks, just about anyone—from San Fernando, Shanghai or Syria—can buy a St Lucian passport for just US$100,000. There's a US$190,000 package for a family of four.
This horse-racing project aims to attract punters from China, south-east Asia and Russia. With a part-share in a racehorse or a timeshare thrown in, we could see a flood of new St Lucian passports.
St Lucia's prime minister Allan Chastenet won office with an election in June last year. In July, he signed an agreement with Malaysian-born architect and horse-racing entrepreneur Teo Ah Khing, of Desert Star Holdings and Hong Kong's China Horse Club. A supplementary agreement followed in November.
Teo boasts construction successes with the Palm in Dubai, Dubai's Meydan racecourse, and in Pakistan and Malaysia. He is part owner of a horse, Australia, which won the Epsom Derby in 2014.
Chastenet's predecessor, Kenny Anthony of the St Lucia Labour Party, talked to him for three years, but did not reach an agreement.
Teo's agreements are confidential. But scans are out, reportedly showing leaked copies.
If the scans are accurate, there are big tax breaks—no VAT, income tax, company tax, import duty, stamp duty or property tax for 25 years.
Land would be sold to Teo for between US$60,000 and US$90,000 per acre; each parcel will be paid for only when the development is complete. Land not already government-owned will be bought through compulsory purchase, then sold to the developer at the guaranteed price. The government will pick up the tab for any difference.
If the scheme flops, the developers are protected. If 200 passports are not sold within two years, they can take a full refund for land purchased.
Passport sales have been loosened up. The cut price of US$100,000 kicks in this month. An annual upper limit of 500 new citizens has been junked. Applicants no longer need to prove wealth of US$3.0 million. Turnaround time has been cut from three months to 35 days.
As they say, you can't make an omelette … To clear the site, St Lucia will demolish its 9,000-seat national stadium, a gift from China completed only in 2002.
The stadium has barely been used. Since 2009, it has housed a makeshift hospital, replacing a Vieux Fort hospital which burnt down that year.
Also to be demolished is a newly-completed abattoir, paid for by Taiwan. It's equal-opportunity wastage for aid projects.
Allan Chastenet has a track record running hotels and airlines. He is no fly-by-night. But to an outsider, mega-schemes on small islands look challenging.
A thousand horses is a lot. Trinidad and Barbados each have perhaps around 400, and a racing tradition.
St Lucia would be moving from a standing start to a few hundred skilled grooms, up to 100 trainers and a few dozen specialist vets.
Elsewhere, Nassau's US$3.5 billion Baha Mar resort went bankrupt, and will open at least 30 months late. Proposals for a US$750 million resort on Antigua's Guana Island have knocked around for a quarter-century. Then there were Donald Trump's T&T resort proposals for Chacachacare and Sevilla.
In Dominica, a Layou River resort was launched, also a quarter-century ago, to be financed by passports sold in Taiwan and Hong Kong. Nothing came of it—though there are strong hopes for a proposed Dominica Marriott, announced on Monday, to be funded by passport sales.
In the eastern Caribbean, selling citizenship is an economic mainstay. For St Kitts-Nevis, passports have at times earned over one-third of government revenue. Antigua, Dominica and Grenada are also in the business.
But internationally, this business looks iffy. America's CBS network began the year with a 60 Minutes slot highlighting passport schemes in frank and unflattering terms.
General John Kelly, the Trump nominee for Homeland Security, was formerly head of the US Southern Command, responsible for the US military in South America and the Caribbean. Last year, he warned that “cash for passport programmes could be exploited by criminals, terrorists or other nefarious actors.â€
Economic strategies based on “citizenship by investment†may no longer be odds-on favourites.
