Economics of Airport Development“The state of negotiations and progress with relocating homeowners”

26.JAN.07

One of the most cited challenges of the construction of the Argyle International Airport is the purchasing of properties on the earmarked site and the relocation of homeowners to make way for the construction of the airport. But, I will show in this article the kind of progress that has been achieved so far among the interest groups: Mt Pleasant/Argyle homeowners, the International Airport Development Company (IADC), and the government. It is fair to say that, while much remains to be done, these groups have, to date, made creditable progress on this phase of the project. Looking back now, one could be forgiven for wondering why we had considered this phase so daunting at the start.{{more}}

First, let me provide the basic facts as they relate to the state of negotiations and the progress of relocation from the site. There are 133 built properties, residential and commercial, on the site earmarked for the construction of the airport and that have to be relocated. In our negotiations to date, we have reached agreement on price with 89 of these property owners. This means that there are 44 property owners with whom we have not yet settled on a price. But one should not be alarmed by this, for a variety of reasons, which I explain below.

Of the 44 property owners with whom we have not yet settled, 27 of them have negotiated with us and are either at the stage of getting their properties re-assessed by their own local private valuer, or are considering the price offer made to them at the negotiations. Another 7 of them are working with their attorneys to obtain proper titles to their properties. However, the remaining 10 homeowners could be considered problematic; many of these 10 homeowners have either refused to or are avoiding negotiations with the IADC. Over the last few weeks, the IADC staff has intensified its efforts in reaching out to these homeowners.

In the spirit in which the IADC has conducted these negotiations to date, we will continue to reach out to these homeowners for a while longer to try reach with them an amicable and mutually agreeable settlement price. But clearly, we cannot continue these efforts ad infinitum. In the absence of negotiations with the IADC, this minority of property owners leave the people of this country, and the government, with little or no choice but to resort to the acquisition law, in the interest of national development. While the IADC strives to avoid this course of action, it is becoming increasingly clear that many of the 10 have already opted for this route.

There are many reasons why we have achieved agreement on price with the overwhelming majority of property owners. The firm contracted by the IADC to do the valuation of properties, the British firm of Brown and Company, has done a thorough job of evaluating the properties in a consistent manner. But more than this, as a practical matter, the IADC has taken the view that notwithstanding the careful exercise of judgment by Brown and Company, property valuation is an inexact science and that where evidence is presented to justify departure from these values, the IADC’s negotiating team does so to arrive at a fair and reasonable price.

That approach has borne fruits. Most homeowners have accepted the transparent, fair and reasonable way they have interacted with us and have arrived at prices that are acceptable to the government and to themselves. Indeed, while many of them have contracted local valuers to get a second opinion on their properties, they have, for the most part, approached the negotiation exercise with a spirit of compromise, recognising that neither the value proposed by Brown and Company nor that of their own local private valuer is taken from the Bible, but rather, each is a judgemental figure, that can be challenged by the other party. This acknowledgement has helped tremendously in arriving at the negotiated settlements so far.

Another selling point to homeowners is the range of concessions approved by the government for them. As I outlined in a previous article, the concessions offered to property owners range from waiver of stamp duty and all other legal fees, sale of Harmony Hall lands at a discounted price, a relocation allowance of EC$10,000 and the freedom to remove all and any fixtures or fittings from their homes. Considering the average value of the homes in the area, I estimated that the average homeowner could benefit from these concessions to the tune of EC$107,000, excluding the benefit they gain from removing their fixtures and fittings.

Perhaps, one of the most valuable concessions is the land sold to them at Harmony Hall. The IADC is selling its Harmony Hall lands at the concessionary price of EC$7.00 per sq ft, though it is widely accepted that these lands could be sold on the open market at prices ranging from $12 – $15 per sq ft. The 21 acre plot of land has been subdivided into 77 lots, ranging in size from 5,800 sq. ft to 26,700 sq. ft. So far, 67 of these lots have been sold to Mt Pleasant/Argyle affected property owners. At the moment, the infrastructure works are being put in place, and many homeowners are poised to start constructing their homes as early as mid-February 2007.

We can look back, if we wish, at the various attempts by certain groups of people to stir up the homeowners at Mt. Pleasant/Argyle to create discord between them and the government. It is amazing to me at times the extent to which some of our people go in undermining progressive developments in our country, the same country they say they love and seek daily to rule over. But their efforts at disharmony and discontent have not yet materialised.

This country will be transformed by the international airport. And when it does, the sacrifice of the people of Mt Pleasant and Argyle, who willingly vacate their homes to make way for the progress of this country, will always be remembered. I will remember them. I will also do my own part to establish, in their honour, a permanent record of their contribution to nation building.