Above: Molasses Reef

By the Caribbean Journal staff

The Molasses Reef development on West Caicos will recommence development following the signing of a development agreement with the Turks and Caicos government.

The agreement was signed Dec. 6. The remaining arrangements necessary to restart the project will be completed this week, according to a government release.

The project, which has been stalled since 2008, will include a luxury hotel and condominium resort on the nine-square-mile island of West Caicos.

Development initially began in 2001, but the collapse of the project’s main creditor, Lehman Brothers, in the 2008 financial crisis brought it to a halt.

A group of European investors advised by Kew Capital agreed to buy most of the shares of the former developer, Logwood Development Company, and the original creditor’s interest in the land and other assets, including the partially-built hotel.

The developer will start work in 2013 with a view to “opening the hotel as soon as possible,” the government said.

The agreement, signed by Governor Ric Todd, is the result of a nearly 12-mont-long negotiation with the developers. As part of the deal, Turks and Caicos’ government will see a 25 percent share of proceeds from the sale of the leasehold interests of land in southern West Caicos.

The agreement brings the government $7.6 million, including stamp duty, through the completion of land sales that had not yet been completed.

A key factor in the agreement is the designation of much of West Caicos as a nature conservancy.

“I am  glad that the Government and the various parties involved in this transaction have reached a deal that will enable this project to re-start,” Todd said in a statement. “This luxury resort development will deliver considerable economic and employment benefits to TCI, and has been very carefully structured so as to preserve the unique environmental and marine heritage of West Caicos.”

A spokesman for Kew said the investment “reflects our conviction that TCI has a great tourism base and has enormous further tourism potential.”