Friars Bay, St. Kitts Development Study

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Imogene Charles
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1 Friars Bay, St. Kitts Development Study PREPARED FOR AI INTERNATIONAL BY GARY E. SCHWEIKERT THIS VERSION SANCTIONED FOR RELEASE JUNE BY AI TO ARAMBYS FOR PURPOSES OF ASCERTAINING INTEREST IN DEVELOPING THE PARCEL OF LAND DESCRIBED HEREIN. FORWARDING NOT PERMITTED.

2 Presentation Agenda I. Development Overview II. Site Overview III. Philosophy of the Study IV. Ecology V. Uses of the Land VI. Descriptions/ Financials VII. Next Steps

3 Development Overview Friars Bay consists of 262 acres of pristine land, fronting both the Atlantic Ocean and the Caribbean Sea on the island of St Kitts. Ownership has requested a feasibility review to determine the highest and best use of the land, should development be considered. The site is currently vacant and can be developed with multiple uses to include: A 100-room luxury hotel 150 single family home sites Two condominium sites of 60 units each Restaurant opportunity overlooking the Atlantic Ocean Retail shopping village Twenty-five acre ecological sanctuary One acre turtle conservation area The development would add to the already burgeoning residential market on the island and satisfy the need for greater commercial opportunities (hotel and retail).

4 Site Overview Location: The property extends from the ridge at the top of Sir Timothy s Hill and extends southward to the ridge at the top of St Michael s Hill and covers the total width of the island. A portion of the beachfront is shared with the adjacent landowner on the Caribbean side. Surrounding Uses: The southernmost border of the property shares the ridge with the Sundance Ridge development of 15 luxury homes. On the Caribbean beachfront, an adjacent landowner has established a high end beach club and restaurant and is potentially planning a small marina. To the north, residential development is apparent on the far side of Sir Timothy Hill with views of the Atlantic. A pre-existing scenic overlook off the main road facing the Atlantic is popular with tourists. Topography and Visibility: The terrain is both accommodating and foreboding. Most of the hilltop areas include steep slopes, yet coexist with serene beaches on both bodies of water. Also included is a bird sanctuary surrounded by native mangrove and marsh as well as a beachfront turtle conservation area on the Atlantic side. Nearly all parcels of land on the property enjoy a view. Accessibility: The main road Kennedy Simonds Highway intersects the entire length of the property and additional roads will be developed to access each parcel considered for development.

5 Site Overview INSERT AERIAL VIEW IMAGE

6 Site Overview - Wind and Solar patterns

7 Site Overview Development Philosophy The property had previously undergone a development review which suggested residential development but did not maximize the potential yield. The significant difference in this study: Ø Provide ultimate flexibility in development options and land usage Ø Maximize yield of saleable land o Certain lands previously considered unusable are included for development o This yielded an additional 10 acres of land for sale o The ecologically sensitive lands were preserved, not destroyed o Recommended uses for the land are not limited to residential Ø Mitigate financial risk by phasing various parcels over time and according to market conditions Ø Involve other development partners only where appropriate and not contingent on the entire property s development

8 Site Overview Development Philosophy -2 Why is the benefit for development greater now than before? We evaluated the slope of the land from a different point of view. Extensive work with the local engineering firm proved that the prior standard practice related to construction on sloped land was outdated. Plots may now be sold with a combination of buildable and unusable land. Parcels previously considered unbuildable are now under construction routinely.

9 Site Overview Development Philosophy -3

10 Site Overview Slope Analysis

11 Land Parcel Sale - Proposed Zoning

12 The Importance of Preservation

13 The Importance of Preservation Although no formal regulations exist regarding riparian or avian sanctuaries, protection of the salt pond marsh and the turtle spawning areas is good for business. The pond is an avian sanctuary for migratory birds travelling from North toward South America. The mangrove is highly regarded by the local population. The turtle spawning area has the attention of the Caribbean communities and potentially US-based ecological organizations. Destructive actions in these areas may bring negative sentiment toward any development on the property and unnecessarily delay your plans.

14 The Importance of Preservation - 2 We have earmarked the reserve areas requested by owner in two locations: No development will take place in the pond area A turtle protection zone will be established on the Atlantic Ocean beach The focus on ecological tourism has existed on other islands but this would be the first effort on St Kitts. The pond area requires some remediation and noninvasive construction of boardwalks for nature viewing. The turtle area may require support for legislative changes and restricted beach access. Both of these activities would be of interest to locals and tourists alike. Expert advocacy groups interested in lending assistance are at our disposal but we suggest contacting them after master planning documents for the development are completed and filed for approvals.

16 Leatherback Turtles spawn in the area Narrative

17 Site Overview Slope Analysis- review

18 Site Overview - Proposed Zoning

19 Site Overview Whole Parcels Land Parcel Area (sf) (acres) Proposed land usage A 439, Residential lots B 162, commercial/restaurant/ lookout point C 2,638, residential lots D 415, residential lots E 291, very steep and difficult to access F 348, commercial G 307, Existing roadways and verges H 190, potential apartment condos K 910, Nature reserve L 606, residential similar to sandy bank development M 2,073, residential lots N 1,502, boutique hotel or condo O 953, residential lots Q 279, Multi unit apartment / commercial R 280, Beaches along the Atlantic shore line S 43, TURTLE CONSERVATION AREA TOTALS 11,444, NOTE: ALL AREAS IN THIS SCHEDULE ARE APPROXIMATE AND MUST BE CONFIRMED BY A LAND SURVEYOR

20 Site Overview Developed Parcels Land Parcel Area Buildable Land Very Steep and Difficult to access Land Gross Saleable Land 10% to be deducted for infrastructure Net Saleable Land (sf) (acres) (sf) (acres) (sf) (acres) (sf) (acres) (sf) (acres) (sf) (acres) Proposed land usage A 388, , , , , , residential (3 lots) B 158, , , , , , commercial/restaurant/ lookout point C 1,757, ,237, , ,757, , ,581, residential (18 lots) D 408, , , , , , residential (4 lots) E 202, , very steep and difficult to access F 261, , , , , , commercial G 307, , Existing roadways and verges H 146, , , , , , potential apartment condos I 698, , protected land J 386, , protected land K 154, , , , , back of house ancillary service and parking. L 466, , , , , , M 1,998, ,438, , ,998, , ,798, residential (27 lots) residential (12 lots) similar to sandy bank development N 778, , , , , , boutique hotel or condo O 812, , , , , , residential (9 lots) P 1,914, ,914, very steep and difficult to access and expensive to develop Q 279, , , , , Multi unit apartment / commercial R 280, , Beaches along the Atlantic shore line S 43, , Turtle conservation area not including the beach TOTALS 11,444, ,213, ,230, ,487, , ,739, NOTE: ALL AREAS IN THIS SCHEDULE ARE APPROXIMATE AND MUST BE CONFIRMED BY A LAND SURVEYOR

21 Site Overview - Proposed Zoning & Lots

22 Sale vs. Development Philosophy Two options for each of the parcels identified exist for your consideration. In each case, we have evaluated an outright sale of the land versus a phased development. Our goal is to provide as much flexibility as possible with scenarios tailored to fit the market conditions and partnership opportunities available at the desired time of development. It has been suggested to us that the price for the sale of the entire property would be a minimum of $25million USD. However, it is clear that the market values property on a significantly higher basis after infrastructure development has taken place. Lets start with residential single family:

23 Residential Development Assumptions v The single family residential development would take place on a minimum of ½ acre lots; exact density would be determined in the master plan based on access. v Pricing is based on a competitive review of other luxury developments with a discount factor of 15%-20%. This seems reasonable given the extensive amenities planned or present in the Christophe Harbour development. v Home sizes are roughly square feet. v Construction cost is calculated at a finish level similar to other peninsula developments. v Soft costs include government transfer fees, commissions, and professional fees v Infrastructure relates to utilities, roadways, water and sewage.

24 Residential Sales.

25 Residential Sales.

26 Apartment / Condominium Two locations on the property would be ideal for condominium apartments: one facing the Atlantic Ocean in Parcel H one facing the pond area in Parcel Q We recommend considering the development of these units to take advantage of the citizenship program on St Kitts. There continues to be strong interest in the program and these units would provide a strong financial foundation for future development. We envision duplex apartments with one and two bedroom configurations. In the area of Parcel Q, a retail village could be the first floor tenants for these buildings (potentially 10).

27 Site Overview - Proposed Zoning & Lots

28 Apartment / Condominium Parcel H

29 Apartment / Condominium Parcel Q

30 Apartment/ Condo Land Sale

31 Apartment/ Condo Development

32 Apartment/ Condo Development Retail Lease Retail SF Retail Lease Income/ Year Infrastructure/Lot Construc7on/Lot So8 Costs/Lot Con7ngency for Construc7on 45,000 $990,000 $1,255,782 $9,000,000 $158,400 $900,000 45,000 $990,000 $1,255,782 $9,000,000 $158,400 $900,000

33 Site Overview - Proposed Zoning & Lots

34 Potential Commercial Development v Two parcels are quite suitable for commercial development: B and F v Parcel B presents an outstanding opportunity for a unique scenic restaurant, overlooking the Atlantic Ocean v No such experience exists on St Kitts v Contemporary 3-level design would incorporate: v Parking on upper levels for scenic overlook tourists and restaurant guests v Full glass façade one level below with restaurant on second level v Support facilities on third level v Full financials can be modeled after locating a suitable partner for this venture. We are suggesting either a land lease or parcel sale for these two locations. v Section F can be developed as a shopping arcade as ease of access from the main road already exists.

36 Site Overview - Proposed Zoning & Lots

37 Hotel Description Ø The luxury hotel would be situated on the Caribbean beachfront, nestled back into the mountain and matching the contour of the hillside. Ø The design would be contemporary, featuring a roof top pool and event deck with 100 rooms, restaurant, and spa below. Ø The ancillary services and support functions would be located on parcel K, just behind the adjacent owner s property. Ø Some land reclamation work would need to be done to regenerate the beachfront lost in recent storms.

38 Hotel Area Program

39 Hotel Construction Costs

40 Hotel Operating Projections (5yr sale)

41 Comparable Lodging Demand for St Kitts is growing vs last year! +2.3% in Hotel Occupancy, +4.4% in Average Rate, Competitive set +6%, Revenues +10% Project Name City & State Country Opening Date # Rooms Ritz-Carlton Grand Cayman Grand Cayman, GCY Cayman Islands Dec Cap Juluca Hotel Maundays Bay, Anguilla Jun Rosewood Little Dix Bay Virgin Gorda, VGG British Virgin Islands Jan One & Only Ocean Club Paradise, PAR Bahamas Jun Sandy Lane Hotel St James, Barbados Mar Rosewood Caneel Bay Resort Cruz Bay, STJ US Virgin Islands Jan Viceroy Anguilla Barnes Bay, Anguilla Jul CuisinArt Resort & Spa Rendezvous Bay, Anguilla Dec

42 Thank You

BEACHFRONT BUILDING 9 MIDDLE UNITS BEACHFRONT BUILDING 9 CORNER UNITS

STUDIO Beachfront Apartments BEACHFRONT BUILDING 9 MIDDLE UNITS Living 137 12.73 En-suite 66 6.13 Entry/Kitchen 90 8.36 Internal Walls/Ducts 15 1.39 Total 580 53.88 BEACHFRONT BUILDING 9 CORNER UNITS The