Court orders government to move into white elephantPOSTED: 11/27/13 12:34 PM
Developer RGM wins lawsuit: twelve months to abide
St. Maarten – The Court in First Instance has sentenced the government to move into the new government administration building on Pond Island within twelve months – therefore the latest on November 26, 2014. The court furthermore sentence the country to pay damages to developer RGM for the devaluation the building suffered after more than five years of vacancy.
The court ruling concludes a lawsuit developer RGM initiated on October 4 of last year whereby it demanded that the government moves into the building and starts using it for the purpose for which it was built. RGM completed its work on the project on March 31, 2008, but the government has only recently made moves to get the white elephant with the green hat ready for occupation.
Since the last quarter of 2007, the government has paid $481,000 per quarter in boot-fees to the developer. To date (including the third quarter of 2013), the government has paid $11,544,000 for a building it has never used. The remaining debt on the project is another $20 million, according to the court ruling.
The government does not have to start within 15 days after the ruling with the tenant improvements in the building and to occupy it within 6 months, as RGM demanded.
The developer also demanded that the government moves into the building within 6 months under threat of a $5,000 penalty per day that it misses this deadline. The court gave the country six more months to do this “so that the country will not risk penalties.” A condition is of course that the country takes decisive action to meet the November 26, 2014 deadline.
The court did not rule on a third demand – that the government begins within seven days with maintenance work – because this issue is currently under appeal in the Common Court of Justice.
But the court did grant RGM damages that will have to be determined later. The developer claimed that the government acted wrongful by leaving the building empty for so long and by not carrying out the tenant improvements it is by contract held to do. RGM fears that the empty building will damage its reputation and it also claims that the building is losing value because it is not in use.
The court rejected a counter claim from the government that RGM has to repair damages to roofs, electric switchboxes, walls and ceiling tiles.