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Mega-resort project planned for St. Maarten
Travel Markets Insider / April 30, 2012

By Larry Luxner

SAN JUAN — St. Maarten will soon be home to a mega-resort that aims to dramatically boost tourism to the island.

Maarten Quarter is a $110 million joint venture between Royal Caribbean Cruises Ltd. and Trident Development, a subsidiary of Hill International. It was one of the case studies profiled during the 16th annual Caribbean Hotel & Tourism Investment Conference held in San Juan, Puerto Rico, last week.

Adam C. Petrillo, executive vice-president of Trident, spoke to Travel Markets Insider following a presentation on Maarten Quarter — a “mixed-use hospitality project with retail” on a 9.5-acre parcel located within the existing port of Philipsburg, on the Dutch side of the 34-square-mile island.

“We’re answering the call of both the cruise industry and St. Maarten as well,” said Petrillo. “Our challenge today is accommodating these massive vessels. Royal Caribbean’s Allure of the Seas and Oasis of the Seas are each a billion-dollar investment, carrying 8,000 passengers and crew each.”

Petrillo noted that in 2011, St. Maarten received 1,656,159 cruise ship arrivals in 596 ship calls, surpassing the 2010 figure by 344,200. Officials attribute that impressive growth to the direct marketing to cruise-line executives and itinerary planners by Theo Hayliger, deputy prime minister and harbor affairs minister, and by Mark Mingo, CEO of Harbour Group.

“They did a magnificent job reinvigorating Front Street and redeveloping Philipsburg. The island is now unrivaled in the Caribbean, and we view Maarten Quarter as an absolute necessity,” said the Miami-based executive. “The longer you can keep passengers on your shore spending money, the better off you are. But if there’s too much congestion, people get frustrated and move on. By creating unique offerings and attractions, they tend to want to stay longer — and being close by, they’re less concerned about missing their boat.”

Even so, he told TMI, “St. Maarten is in a very strong position, particularly from the cruise industry standpoint. It’s the farthest east and south as you can go on a seven-day cruise from Fort Lauderdale or Miami. It has the facilities to accommodate large ships, as well as an incomparable mix of entertainment, retail shopping and hotels. And the dual French and Dutch culture on one island is very unique.”

Maarten Quarter is to employ 250 workers in the construction phase and 400 full-time workers upon its completion in 2014. The project is expected to break ground by September or October of this year; Petrillo said he’s been in negotiations with Hilton, Marriott and Inter-Continental about managing the 125-room hotel its planners envision.

“We’ve also had contact with some international restaurant and entertainment brands, and major rum manufacturers,” he said without elaborating.

Hill International isn’t exactly a newcomer to the Caribbean. Its most recent project there was its venture with RCCL in building the cruise-ship port of Falmouth, Jamaica — a $200 million endeavor.

“In Falmouth, we did an extensive sea-bottom reclamation and created real estate from dredging and filling. This project is not as large because there are no marine works. Rather, this is an existing property within the port. St. Maarten can already accommodate 7-8 cruise ships. We’re not building any additional pier space,” Petrillo explained.

“What we’re really aiming to do is create new offerings in entertainment, food and beverages so we have a sustainable business after the cruise ships leave. How many retail shops will depend on the number of lead tenants we bring in, though it probably won’t exceed 20 in total.”

Hill, founded in 1976, has 3,200 employees worldwide and has worked on dozens of impressive projects ranging from the $4 billion expansion of Dubai International Airport to the partial rebuilding of the Pentagon following 9/11.

Yet securing money for Maarten Quarter has been a major headache, said Petrillo.

“There’s probably never been a more challenging time to find money for mixed-use projects in the Caribbean. It’s very hard to find equity sources for projects of this scope and complexity,” he said. “Banks are generally averse to hotel construction risks, and are either unable or unwilling to lend.”

In the end, he said, “we were able to work through the Dutch Ministry of Finance and an insurance company. We have two firms listed on the New York Stock Exchange sponsoring this, but to fill in the additional capital pockets, we really had to be creative and look to both the hotel and gaming industry to be able to pull this together.”

As soon as financing arrangements are completed this summer, a formal joint venture will be signed between Trident and RCCL.

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