Posted September 25, 2013 by publisher in Cuba Business.
Rob Sequin | Havana Journal
Going back to the mid 1990s, Leisure Canada, proclaimed to be the “leading real estate developer” in Cuba boasting about the development of luxury resorts in Cuba, with multiple properties under development, including five-star hotels and championship golf courses. The company raised tens of millions of dollars yet never broke ground in Cuba and never had any revenue from real estate projects in Cuba.
The brand is now dead and fully absorbed into 360 VOX, a Montreal Canada corporation traded on the CVE with the stock symbol VOX.
The Early Years
January 25, 1995 - Earliest use of Leisure Canada brand.
July 1996 - Wilton Properties Limited and Republic of Cuba government-operated Gran Caribe Hotels establish VanCuba Holding S.A, a joint venture to construct $400 million in tourism facilities.
February 28, 1997 - Leisure Canada brand was created in January 1996 only to be abandoned thirteen months later.
November 17, 1999 - Leisure Canada Initiates Construction on Flagship Site in Cuba. Leisure Canada Inc.(formerly traded on the CANADIAN DEALING NETWORK as LCAN) is pleased to announce that its Cuban joint venture with Gran Caribe Hotels S.A. has received approval and authorization from the executive Committee of the Council of Ministers of the Republic of Cuba. This represents the completion of all regulatory requirements and permitting to begin construction of the first hotel on Leisure Canada’s flagship site at Jibacoa, Cuba. This approval is the culmination of 3 years effort to move the project forward and to begin construction on the first hotel of Phase I on this site. Leisure Canada expects preliminary construction activities will begin in the early part of January, 2000.
END Obviously that didn’t happen. As you will read, this is the first of many over-hyped press releases announcing progress in Cuba.
Summary of Cuba real estate development projects
Jibacoa - Leisure Canada’s site spans 5.5 square kilometers of oceanfront property, which is located 65 kilometers east of Havana. The site is being developed as the first high-end destination resort in Cuba, and it will host six luxury hotels, two PGA championship golf courses, and timeshare villas.
Cayo Largo - This small limestone quay, located 50 kilometers south of the main island of Cuba, possesses the most spectacular white sand beaches in all of the Caribbean. Cayo Largo is also rated as one of the world’s best diving sites. Leisure Canada’s project will involve the construction of 900 rooms, and a central pedestrian village that will offer retail and amenity experiences currently not offered on the island. Because of an environmental building cap, Leisure Canada’s development will be the last such development on Cayo Largo.
Monte Barreto - Located on the last significant piece of oceanfront property in Havana’s business and trade district, Leisure Canada’s Monte Barreto project will capitalize on increasing business travel to Cuba. The site is equivalent to two city blocks, adjacent to Havana’s new world-class aquarium, and across from Cuba’s new trade & convention center, both of which are currently under construction.
June 21, 2002 - Leisure Canada announced a private placement with International Capital Inc. (“ICI”) for aggregate proceeds of US$4,889,497 that will be allocated primarily to the development program of its North American style, five-star Monte Barreto hotel project.
END More than eleven years later and the Monte Barreto project is dead in the water. Leisure Canada abandoned the domain name MonteBarreto.com which is now owned by Havana Journal Inc.
December 21, 2007 Leisure Canada raised $20 million from a Dubai investment that was never used for construction.
March 12, 2009 - Leisure Canada raised $1 million in a brokered private placement.
August 2009 - Leisure Canada raised $18 million in brokered private placement.
END - One has to wonder, how does a company burn through MILLIONS of dollars in other people’s money while NEVER doing anything but restructuring the company and “planning” for three real estate development projects? The answer is probably simply… this is Cuba where companies and individuals invest lots of time and money and always lose both.
January 26, 2010 - Leisure Canada announces it seeking EVEN MORE money for their Cuba real estate development project, the Monte Barreto hotel. “Leisure Canada Inc. (formerly TSX VENTURE:LCN) announced today that it has retained Dundee Securities Corporation as its exclusive financial advisor as it implements plans to construct three 5-star resort hotel and vacation complexes in Cuba.” and the article continues… “We are moving forward rapidly with launching our hotel development projects in Cuba”, said Robin Conners, President & CEO of Leisure Canada.”
Robin Conners is now the current CEO of 360 VOX. In a few months, this news will be four years old and STILL no indication of any construction starting in Havana. So, Leisure Canada is wrong again or worse… Is management intentionally misleading investors? One has to wonder how a company can make such bold forward looking statements without any explanation as to why there has been no date set for start of construction in the history of the life of the company.
November 30, 2010 - In a Havana Journal article I wrote titled Still no ground breaking events in Cuba, I stated that Leisure Canada’s slogan should be “Over promise and under deliver” since they have NEVER broken ground on any project in Cuba in fourteen years.
From the article - For years claiming to be “Cuba’s leading Real Estate Developer” the company changed its slogan to “A leading Cuban investment company” claiming that Cuba is an investor’s paradise. Interim Consolidated Financial Statements for the three and nine months ended September 30, 2010 and 2009 show total revenue of $93,680 with a net loss of $3,139,032. That’s one heck of bad return for an “investment company”. The article goes into detail about the current state of (non) development of the Cuba projects and details the amounts of money burned for everything but construction.
Note: Ten years ago the stock traded at $0.80. Five years ago it traded at $0.30. Today it is $0.12. (There may have been stock splits or other issues that may have affected the stock price.)
July 2011 - Leisure Canada paid a whopping $110,000, for the domain name VisitCuba.com. 360 VOX has developed a website on the domain to be a Cuba travel guide. At this time, it seems that VisitCuba.com is the only active Cuba project for 360 VOX even though the Monte Barreto, Jibacoa and Cayo Largo del Sur projects are still listed as active projects for 360 VOX.
September 2011 - Leisure Canada Board and shareholders agree to move away from the Leisure Canada brand from Leisure Canada to 360 VOX but weeks later, Leisure Canada acquires 360 VOX. Confused?
Today as 360 VOX
360 VOX is now suing the PGA for pulling out of their agreement for the Jibacoa golf course. One has to seriously doubt that the reason for Leisure Canada’s multi-year failures in Cuba is the PGA backing out of sponsoring a planned golf course project. “The lawyer for 360 VOX Corp., Glen H. Waldman, presented the lawsuit before a Palm Beach court and charged that it had lost $20 million in anticipated benefits, $5.5 million dollars in feasibility studies and other expenses, plus the $80 thousand dollars it had paid PGAL for the license.”
Note that FOUR days after the PGA agreed to let Leisure Canada use the PGA brand in Cuba, the PGA backed out of the deal. Havana Journal readers should wonder how Leisure Canada could blame the PGA for $20 million in losses after just FOUR days of such a partnership.
If 360 VOX wins this lawsuit, it would be the first Cuba related revenue generated by the company in fourteen years. If it loses, that is more money down the Cuba investment toilet.
Today 360 VOX is a “global real estate company in the hospitality and asset management, real estate development and sales and marketing businesses”. However, the wording regarding the Cuba projects is the same as it has been for more than ten years. So, if history is any guide, one should not expect any ground breaking developments in Cuba for the foreseeable future.
Cuba Investment Summary
For those who want to “invest” in Cuba, one should be aware of the risks and challenges in Cuba more so than any opportunities. If a Canadian real estate development company has to burn through tens of millions of dollars just for “planning” real estate projects in Cuba, one needs to ask if he or she would be more successful.
Could it be worse? Yes. Developers of a golf course project east of Havana were arrested and held for months until they were convicted, sent home and banned from Cuba. They definitely lost all their time and money.
——————————Havana Journal Comments——————————
Today the Leisure Canada brand is dead.
On September 19, 2013, Havana Journal Inc, a Massachusetts corporation, purchased the domain name LeisureCanada.com and is contemplating its use going forward.
Havana Journal Inc is not affiliated with Leisure Canada, 360 VOX or any previous or current management at either company.
On September 25, 2013, publisher wrote:
360 VOX lawsuit against PGA is bogus. #Jibacoa Cuba Project “in development” for 10+ years before PGA. http://natpo.st/1baxeVQ