UDC To Purchase Ferry Property

The Urban Development Corporation UDC), is to purchase the property at Ferry, in St. Catherine, on which the Hydell Group of schools is housed, and will enter into a lease agreement with Hydell.
Prime Minister, Bruce Golding, who made the announcement in the House of Representatives, yesterday (November 4), explained the rationale for the arrangement.
He said the Government had taken a policy decision, and had given the UDC and the Commissioner of Lands, instructions to identify and secure lands along the corridor between Kingston and Spanish Town, to allow for the orderly development of that corridor.
“We envisage that in the future, Kingston and Spanish Town, along with Portmore, will become one huge metropolis. Kingston’s expansion is not likely to go North, (and is) unlikely to go East, because of the topographical challenges that we face there. The logical expansion is going to be toward the West. Therefore, we took a decision that critical parcels of land that are not already in the possession of Government, we would seek to identify and secure,” he said.
In the case of the Ferry property, Mr. Golding said the owners had placed the property up for sale and that the operators of Hydell had sought to purchase the property, but was unable to secure the financing to do so.
“The UDC Board approved the purchase of the property, in keeping with the development plans that we have for the area, because importantly, the UDC already owns all the lands on both sides of Mandella Highway, leading up to the fly-over at Caymanas and beyond. Between the Ferry River and the fly-over, that was the only piece of land which was not already in the possession of the UDC, and it was thought strategically important, to acquire the land,” he told the House.
Three valuations were done on the land, including one by Allison Pitter and Company on January 31, which estimated the open market value of between $160 million and $170 million. A second valuation conducted by Clinton Cunningham and Associates, placed the value of the property at $165 million, while a third valuation carried out by the UDC’s Estate Department, placed the value of the land at between $161 million and $171 million. The Board subsequently approved the purchase of the property at the mean of the three valuations, in the sum of $168.7 million. The land comprises three parcels totalling 2.61 hectares. The property involves three titles and vendors Delco Supplies Limited (portion of land totalling $100 million); and Cowan Amusement Limited ($68.7 million).
Mr. Golding said the lessee had at their expense constructed 32 buildings with a total space of 46,059 square feet. He explained that the Hydell operators would have the option of taking out the temporary structures, but the permanent structures were part of the property itself, and therefore, “what we have received is more than just the value of the land, it is the value of at least some of the buildings that are situated on the land.”
“We are purchasing property that houses seven different schools, a nursery and pre-school that has 250 children; Hydell Junior Preparatory that has 310 students; Hydell Senior Preparatory School that has 303 students; Hydell Junior/Senior High school that has 320 students; Hydell Special Education School that has 50 students; Hydell Corrective Educational Centre that has 35 students; and Hydell Evening College that has 15 students. A substantial part of that investment comes with the purchase price,” the Prime Minister pointed out.
Mr. Golding informed that the school would continue to operate on short to medium term leases, because the development programme for the corridor is now being formulated and therefore, would determine the length of time that the institution would be allowed to operate, or whether or not a school is to be part of the development of that particular area.
“It may be that when the development of the corridor is completed, we will have to consider relocating the school. I am not saying that we will, I am saying that these are issues that will have to be determined, once the development plans have been completed,” he said.
In the meantime, the Government has not yet taken possession of the property. “No lease arrangement has yet been entered into with the Hydell Group of Schools. We intend to negotiate a lease with the Hydell Group (and) the terms and conditions of that lease will be determined by the UDC’s long-term development plans for the property. With respect to the rental to be paid, consideration will be given to the existing rent that is payable for the property. Consideration will also be given to rent that would approximate, as much as possible, to an economic return on that particular piece of land, (and) consideration will also be given to the particular use for which the land is being put,” Mr. Golding said.
He stressed that if the Government had not secured the land, it is possible that Hydell would have had to vacate the land, which would have seen 1,283 students being displaced, for whom the Ministry of Education would have had responsibility to find accommodation.
Mr. Golding said the UDC Board would have to make the decision as to how long the lease would be, but “in the guidance that I am authorised to provide to them, I would say that that lease should not be more than five years, which is the sort of time frame that we will be talking about for the roll out of that sort of development. At that time, of course, depending on the stage of that development, we will determine whether or not it is extended.”