_{Photo: Stake Bank’s Port Coral project still under construction}

Feinstein Group says it will challenge in court

BELIZE CITY, Wed. Aug. 28, 2024

Citing the completion of the Port Coral cruise port project as being in the public interest, the Government of Belize (GoB) on Tuesday, August 27 announced its intention to compulsorily acquire a 24.3-acre extension to the original 16-acre Stake Bank Island. The extension, referenced in Fiat Grant 881 of 2021, is in the name of Michael Feinstein, former chairman and shareholder of Stake Bank Enterprises Ltd. (SBEL).

Construction of the cruise terminal had slowed in recent years, and that led SBEL’s creditors to place the company in receivership on March 14, 2024. Atlantic Bank, which was overseeing the syndicated loan, confirmed just days after the administrative takeover that title for the extension was in Feinstein’s name instead of SBEL. A bitter legal battle ensued, and construction came to a complete halt. Barrow & Williams, the attorney for the receiver, Marlowe Neal, highlighted that the original 16.085 acres was rendered inaccessible “since it is hemmed in by the extension.” Among the outstanding work on the island are the two piers to accommodate the simultaneous docking of up to 4 Voyager class cruise ships.

The Government of Belize Press Office in its release states that completion of the cruise berthing facility, “for the first time, would provide cruise ship passengers with a dock disembarkation.” It means passengers could walk onshore on Stake Bank Island rather than having to board tenders further out at sea. In this case, they would board smaller vessels from Stake Bank Island to then visit the mainland and destinations at sea. According to the Government release, “cruise tourism arrivals have continued to fall due to the lack of proper berthing facility in the Belize District.” It also highlights that with the enactment of the Stake Bank Cruise Docking Facility Development Act of 2014, the Government committed support to 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.” The report is that thus far, BZ $270 million has been invested into the project.

To allay concerns about potential losses for the Government, the release states that the receiver and creditors who petitioned Cabinet for such a move 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.”

Sources say that what now ensues is a negotiation with Feinstein during a period of 6 weeks from the first date of publication in the Gazette of the Government’s intention to acquire the land. If they cannot agree on compensation, the Government will proceed to publish the notice a second time and then acquire the land. Again, Government officials insist that whatever cost arises would be covered by the creditors who would ultimately receive title to the extension. Prime Minister John Briceño also reported that there is a deposit “in the Government’s account as a down payment, plus also from another financial institution that would be responsible for the payment.” Today, Cabinet Minister Hon. Kareem Musa said everyone insisted on the indemnity to approve the decision in Cabinet.

Commenting on a comparison as to why the controversial university hospital land was not compulsorily acquired, a Government source told Amandala that compulsory acquisitions usually happen when landowners are absentee or do not want to sell. In the case of the hospital land, the owners were willing to negotiate.

In this case, the Feinstein Group issued a press release the day after the Government’s first notice, stating that it will challenge the compulsory acquisition. In a lengthy release of its own, the Group first expressed disappointment in the Government’s decision. It described the move as high-handed interference in a private sector dispute that is still live before the courts. The Group then lists six reasons as to why Government’s action is unfair and improper. Among them, it states that with the December 2023 acquisition by Government of the Port of Belize Ltd. facility, they were handed a “readymade blueprint for the development of a cruise ship docking facility. It therefore has other options. To claim that the acquisition of Mr. Feinstein’s 23.4 acres is in the public interest is just a ruse.” The Feinsteins accuse the Government of siding with Honduran businessmen who, they say, unlike their chairman, Michael Feinstein, have no track record of developing a cruise ship port facility. The Group writes that the Government is “legitimizing the Honduran businessmen’s unlawful act of deliberately inducing the receivership by withholding funding for the project resulting in delays and budget overruns to wrest control of Stake Bank from the hands of a Belizean. They have a track record of similar actions in Central America.”

Feinstein has reserved all his rights, and reports through the release that his attorneys at Marine Parade Chambers LLP believe the court will find that the acquisition lacks any legitimate public purpose.

In May of this year, Atlantic Bank announced the sale of the $62 million Stake Bank debt to Operaciones Portuarias S.A. de C.V., a Honduran company that Feinstein reported has shares in SBEL.