Dominican resort developer in US$20M row refutes fraud label
Santo Domingo.- Allegations of incompliance and even fraud on contracts to buy villas and other residences in the resort project Villa del Sol, in Dominican Republic’s eastern region were refuted Tuesday by the very head of the ambitious development, who in an exclusive interview for Dominican Today produced documents, maps and brochures to counter the allegations of several investors, published by DT several weeks ago.
Ilonka Castillo, executive vice president of the developer and project promoter Grupo Intercaribe, said the failure by the bank Banco del Progreso to comply with its contractual responsibility –which even led to the filing of a suit- in turn spurred delays in the transfer of titles and in the construction of the units in the seaside resort.
She also noted that more than 90 percent of the units in the ambitious development are property of Intercaribe, for which the owners that have lodged complaints are “one or two,” with whom she’s willing to discuss the impasse on a case by case basis. “It’s important to clarify the legal situation that if there are one or two or several clients affected, it’s not the entire project which is in fact affected; those are property of Intercaribe or affiliated companies.”
Castillo said the figure of US$20 million cited by the people affected is the amount now in litigation with Progreso, and not relating to the properties which spurred the complaints. “I want to make it quite clear that 90 percent of the properties which are in the controversy with Banco del Progreso, when you speak of 20 or more million dollars we are speaking about our money, our property.”
In the chronology she presented on the litigation with Progreso, Castillo cites the project’s line of credit gone askew, when the Villa del Sol disbursements from the line of credit were curtailed, on which the bank, in her words, used a previously undisclosed provision to limit the flow of funds based on the borrower’s capital. “A moment arrives when they (Progreso) cannot make the disbursements with the reality needed and the reality the project needs because they have a limit to disburse for a single client according to their capital amount. I didn’t know this, I was surprised because if being so I had another project successfully sold and would’ve financed it with another institution.”
The developer cites the ensuing delays in disbursements, coupled with the financial and real estate crisis of 2008, and Progreso’s “unilateral” decision to “analyze” the credit arrangement with Intercaribe, as what led to the deadlock now in court. “The bank raises our rate from 17 percent to 21 percent and spends an entire year analyzing the credit, and demands more collateral.”
Castillo affirmed that despite the situation with Progreso, the construction continues in the other components of the project located in the Punta Cana-Bavaro area and not financed with that bank.
She said, and provided copy of the court documents, that Intercaribe was finally forced to file suit of more than RD$1.0 billion for damages on Progreso’s alleged breach of contract.
She added that the lawsuit against Progreso “is almost at the point of a ruling” in the National District’s Civil and Commercial Chamber, and a challenge on title transfers is now in effect in the Real Estate Jurisdiction in Higuey, Altagracia province, and stressed her dismay with the bank stems from its placing of liens on two other projects which unlike to Villa del Sol, Progreso didn’t finance.
“We had a contract, we had an agreement, that was violated and that has affected us, everyone, but mainly us.”
When asked why the communication with the buyers deteriorated to the point that phone calls and emails by DT went answered, Castillo partly blamed in on a change of administration, but denied that she had “fled” as reported by some of the buyers affected. She also affirmed that she’s contacting all those Villa del Sol buyers who feel affected and said she wouldn’t do anything that would affect her reputation or that of the set of projects she said were founded by her father more than 20 years ago.
Although she acknowledged the veracity of the information in the two articles published, she denied the label of fraud given by the buyers affected. “From the onset of the problem we have tried to resolve the situation but haven’t been able to reach an agreement. We expect it will be done as soon as possible, but can’t specify a date as to when that will be.”
“What’s important is that we are here; we have communication with our clients and that each case, one by one is being attended,” the real estate developer said, adding that she can be reached at email@example.com.
No one answered Dominican Today’s repeated calls for a statement made to the number for Public Relations of the Progreso Bank, 809-274-1000 ex. 2992, or at the number of its major stakeholder, the Vicini Group’s Institutional Relations Department, 809-541-5400.