Tonight, it has been announced that the Government of Belize in acquiring a large swathe of land out at Stake Bank Caye.
A release that came out half an hour ago says, quote:
"...with the approval of the Cabinet, the Minister of Natural Resources has today signed a notice of intention to compulsorily acquire the disputed 24-acre extension of Stake Bank Island.
The parcel, identified as Fiat Grant 881 of 2021, and given to Michael Feinstein, the former Chairman and Shareholder of Stake Bank Enterprises Ltd., is currently the subject of an ownership dispute at proceedings in the High Court. Unfortunately, that dispute is detrimental to the completion of a project that is in public interest.
Once the acquisition and assignment to Stake Bank Enterprises is finalized, the cruise berthing facility, which has been halted since the company entered receivership in March of this year, can proceed to completion.
The Company's receivership and the subsequent land dispute regarding ownership of the island extension has frozen works on the project, resulting in significant delays to construction and crucially, delays to completing a facility that, for the first time, would provide cruise ship passengers with a dock disembarkation. Stake Bank's Receiver and Creditors petitioned Cabinet consideration for the acquisition in order to rescue the project and its BZ$ 270 million investment to date. The Creditors have provided a comprehensive indemnity to Government so that all costs, if any ultimately arises from the acquisition, are to be paid by the Creditors and not the Government.
Ten years ago, the then Government enacted the Stake Bank Cruise Docking Facility Development Act of 2014 which provided various investment incentives and committed Government to supporting Stake Bank's Completion, in the context of a much-needed cruise berthing facility. This berthing is even more urgent today as cruise ships have become larger. Having a dock for cruise ships, extending the tours times for visitors and salvaging a major investment project underline the rationale for Cabinet's decision."
So there it is - but even with that long release, it's a quite complicated maneuver.
To explain, News Director Jules Vasquez joins us.
Jules, what do we know about this acquisition.
JULES
Well, first off, it's unprecedented - but multiple sources tell us government plans to acquire a portion of Stake Bank for the following reasons.
As you said for the completion of the project and second to solve this problem - the island currently comprises 39 acres, but 23 of those acres all coastal areas are reclaimed land. And it is all the seafrontage forming the outer periphery of the island. It is owned by Mike Feinstein, the title is in his name. So, look at it like a donut, the receiver who has taken over Stake Bank Enterprises has the middle, the nut, and Mike FeinStein has all the dough - which is the outside! Government now plans to acquire those 23 acres from him and vest it to the OPSA, Operaciones Portuarias SA, a Honduran company and now the sole shareholder in Stake Bank Enterprises. Back in March I did a story on the odd nature of the land dispute:
INDIRA
And indeed they are suing Feinstein for fraud for basically stealing the land from the project.
But, Jules, the bigger issue is that land can only be acquired for a public purpose. But if government is acquiring the land for a private Honduran company, OPSA what is the public purpose?
JULES
Well, this is where it gets a little tricky. The receiver, Stake Bank which is now working to protect OPSA's interests which have about 200 million dollars sunken into this project can't finish it if Feinstein owns all the beach frontage which is where they will put the berthing docks on. So government will acquire it - and here's how they will argue that though it is for a private company, it is in the public interest. First, the government gave Stake Bank lavish concessions - and that is a sacrifice to the public coffer, so that is like the general public being a shareholder. Second, in 2015, both sides of the house supported the Stake Bank Cruise Docking Facility Development Act. So, the people's house, the people.s interest. Third, developing cruise will create jobs and economic activity - the minister just said yesterday arrivals are lagging because we don't have a berthing facility.
So, those are the arguments in favor. The arguments against: well first, with any compulsory acquisition you have to compensate the owner - and if I know Mike Feinstein he will argue it is in the tens of millions. The matter though will end up in court. In fact, it is already lodged in court. As you said OPSA is already suing Feinstein for land fraud. If they win, they get the titles, no compensation needed. If they lose, and Feinstein's right to those properties is upheld, government and taxpayers will be on the hook to compensate him. And that is where it gets very tricky. And for this reason I am told government is crafting what it hopes is an airtight indemnity agreement that if there is liability to compensate Feinstein, it is covered by OPSA.
Mike Feinstein I expect will say that they have already token his project and they are now stealing his land to reward those who stole it.
INDIRA
But beyond the disputes what happens next for cruise?
JULES
Well, OPSA - which has invested well over200 million - will now have to invest possibly another hundred million to finish it. Government felt it had to make this choice, since that project is the only one near completion - or I should say the only one that has started. But, the bad news is to get those Icon class vessels to berth at this facility - they will have to make and adjustment on part of the reef structure along the channel. I did a story on this in 2023:
JULES
So, a lot of the going forward will depend on the public appetite for a compulsory acquisition for the public purpose of vesting land in a private company and for adjusting a reef structure.
INDIRA
But it is not a done deal - it still has to be published twice in the Gazette. Once It has been published a first time, the process has commenced, and it is completed weeks later after second publication.
