The 1,600-acre Roco Ki project was among seven detailed in a Wall Street Journal article this week that remain stymied due to lack of financing. Buyers of vacation homes at those resorts paid a cumulative $300 million in deposits, and most have yet to receive their homes or a refund.
At the Roco Ki project, vacation-home buyers paid roughly $54 million in deposits for condos, villas and beachfront homes that still languish as incomplete structures. The project’s developer, American investor Sterling K. Crum’s GeoStar Inc., is negotiating with potential investors willing to take over the project and finish it. The deposits can’t be refunded because they were spent on the resort’s construction.
Roco Ki’s vacation-home buyers say they have heard of several investment groups kicking the tires at the resort in recent months. One group of foreign investors is said to have the project under contract. However, Mr. Crum’s representative didn’t return phone messages seeking comment for this article.
“I’m hopeful that somebody is going to come in and realize that there is a lot of value in this core group of 75 to 100 people who have bought property” at Roco Ki, said Louis Amoroso, a Chicago investor and entrepreneur who paid $1.1 million in deposits for a beachfront home and a condominium at the resort. “And I’m hopeful that they’ll work out a deal that works for them, Roco Ki, the banks and us, and that they will start up the development again.”Robert Sterling, a Charlotte paper broker who paid $900,000 in deposits for a four-bedroom, beachfront home at Roco Ki, said he and fellow buyers are willing to be accommodating of any new investor and wait another couple of years for the resort to be completed. He adds, though, that the buyers will want any new investor to work with them on their purchase contracts rather than dismissing them.
“This thing has to be a holistic solution that involves us,” Mr. Sterling said. “The (buyers) involved in this thing are pretty influential people. If a developer comes in and decides to not honor these contracts and we end up losing the money we put in, that will shut down an entire market (of buyers) – the U.S.”
Kris Hudson/The Wall Street Journal
At the Roco Ki project, vacation-home buyers paid roughly $54 million in deposits for condos, villas and beachfront homes.
As conceived by GeoStar and its partners, Roco Ki was to be a massive resort community with 358 hotel rooms, six restaurants, two pools, meeting rooms, an 18,300-square-foot spa, an 18-hole golf course and dozens of for-sale residences and home sites. Buyers who visited the site in 2005 and 2006 toured the site, by helicopter or by ground, and drank cocktails in a tiki bar perched atop a ridge, allowing them sweeping views of the surrounding jungle. Many met Mr. Crum during sales events at the resort site.
Mr. Crum was identified as the project’s developer by several homebuyers and in a former partner’s lawsuit, which has been settled.
Once the recession hit, costs mushroomed over budget and home sales ground to a halt, GeoStar opted to suspend construction at Roco Ki in 2008. The project still has nine-figure debt, including at least $82.4 million owed to Bank of Nova Scotia and $31.5 million owed to European Investment Bank, according to a project outline circulated to potential new investors last year. Two Dominican banks also have $12 million in loans on the resort.
For his part, Mr. Sterling says he’s not trying to get a refund. He wants his vacation home completed. “I’m not really interested in getting my money back,” he said. “It’s a wonderful place, and it would be spectacular to have a home there and have friends join us down there.”
http://www.rocoki.com/photo_gallery_construction.asp
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