$4.2m complex fails to attract interest

Not one company has expressed interest in turning the Samoa Land Corporation’s (S.L.C) $4.2million headquarters at Tuana’imato into a hotel.

The lack of interest from potential investors follows Cabinet’s decision to re-advertise the tender for the two-acre property and office facilities, built under the leadership of Faumuina Tiatia Liuga as the Minister of S.L.C.

The decision was made in April after months of negotiations between the Endeavor Investment Ltd, a Samoan company that owns the Samoa Traditional Resort and the S.L.C Board.

According to an inside source at S.L.C, no one expressed interest when the new tender process closed in June.

“There was no tender despite the advertisements,” the source told the Samoa Observer.

“It is not known when is the next time they will re-advertise this. “At this point, there’s no further word from the Board on whether it will be re-advertised or no.”

It was not possible to obtain a comment from the Chief Executive Officer of S.L.C, Afoa Arasi Tiotio, who was not at work yesterday. The Minister responsible for the S.L.C, Lautafi Fio Purcell, was also not immediately available.

Back in April, Cabinet announced that the negotiations to lease the Office complex at the Faleata Golf Course by converting it to a commercially owned accommodation complex, had reached a deadlock.

A statement from Cabinet at the time said the original tender did not stipulate non-negotiable conditions and that allowed the parties to include issues that were outside the original tender scope in their negotiations.

The government said it had exhausted all options available to accommodate the business proposals. In the end they could not agree on a compromise decision. And to that extend, Cabinet approved to re-advertise the tender.

“These things happen, it is normal in business transactions,” S.L.C’s Minister, Lautafi Selafi Purcell, said at the time.

“While every effort is made by Government to encourage and assist local business like E.I.L, we have to ensure Government assets are protected.

“The new tender will include specific details, requirements will be very clear on what is on offer and what can be negotiated and what can’t. The tender document will be made very clear to parties involved.”

Contacted for a comment at the time, Su’a Tanielu Su’a, who operates the Samoa Traditional Resort, said the government’s decision to re-tender the complex stemmed from the failure between the parties to agree on the value of the property.

According to Su’a, the government wanted to sell the three-storey-building for $4.5 million. The businessman said he hired a structural engineer and a team to value the property and the valuation came to about $2.2 million.

With a four-year depreciation, he said the final value came down to about $1.7m to $1.8million.

“To look at the real value, there was no way that the building can fetch that much,” Su’a said.

“So, from a business perspective, that’s not viable. $4.5 million on a building like that, that’s just too much.

“I did my best in trying to express my interest in terms of turning that into a commercially viable operation and from a business perspective that’s what I did. I don’t know, maybe Government has something in mind.”

Su’a, who submitted proposals for the first and second tenders and won both rounds, said he has put a lot of resources into preparing documents and had started employing extra workers to train for the implementation of the hotel plans.

Asked whether he would apply for the third tender, he laughed.

“We’ll just focus on Samoa Tradition Resort for now and we’ll see what happens. I guess the message is we don’t qualify.

“I’m not sure whether it’s wise to do it for a third time... or maybe I’m not seeing something the government is seeing. Perhaps the company is not the right entity to take over the property.”

The government’s initial target was for the new hotel to provide accommodation for overseas athletes coming over to compete in the 2015 Commonwealth Youth Games, which is starting in just over two weeks.