Shortly after then-Deputy Chief Minister Omar Hodge obtained a lease for two lots of Crown land in 1986, he turned to Scotiabank to help finance the construction of an $800,000 Road Town complex that is now known as the Omar Hodge Building.

During the three-year construction process, the project reportedly ran into cost overruns and other difficulties. Despite that, Mr. Hodge said his financier “never frowned.”

“I went to Scotiabank and said, ‘I’m going to spend a lot of money,’” Mr. Hodge told the Beacon in December 1989. “I had to spend so much, I went on spending without approval, always revising backward and forward. I gave them so much to frown about, but they never frowned.”

Fast-forward 27 years, and the former legislator is having issues with another financier for recent upgrades on the Omar Hodge Building: the government-owned National Bank of the Virgin Islands.

Unlike Scotiabank, the NBVI may be “frowning,” to use Mr. Hodge’s term: It is foreclosing on the Omar Hodge Building and will attempt to sell the complex in a public auction next Thursday, according to court records, notices from the NBVI and other documents.

This article is a corrected version of an article that appeared in the print edition of Dec. 8, 2016.

The foreclosure likely stems from Mr. Hodge and his wife, Dr. Miriam Hodge, defaulting on a $6.3 million mortgage they took out on the facility in 2013 through their company, O.C. Enterprises.

Land records show that the Hodges initially took out a $4,160,076 mortgage on the complex in May 2011, when Mr. Hodge was still minister of natural resources and labour under the Virgin Islands Party-led government.

That mortgage was signed off by then-NBVI Managing Director Doris Scatliffe with an interest rate of 6.5 percent per annum to be paid in monthly instalments until April 2027.

Around that time, the Hodges were also applying to the Planning Authority to add a fourth floor to their building (see full timeline on page 25).

Though the Planning Authority denied the Hodges’ application on multiple grounds — explaining that a larger Omar Hodge Building would negatively impact traffic flow and parking in the area — an appeals tribunal overturned that decision in September 2011 and allowed the project to proceed.

CORRECTIONS AND CLARIFICATIONS Two sidebars to the Dec. 8, 2016 article “Nat’l Bank auctioning Omar Hodge Building” contained errors, including a mischaracterisation of Clarence Faulkner’s involvement with the Tortola Pier Park’s public share offering. After correspondence with the Beacon, Mr. Faulkner’s attorneys provided the following statement to correct the record: “PMI Capital Services Limited served as a placement agent during the Tortola Pier Park’s public share offering to potential investors in the landside development of the cruise pier project. Mr. Faulkner was associated with the TPP’s public offering in his capacity as a representative of that company. The BVI Ports Authority oversaw the TPP’s share offering, and neither Mr. Faulkner nor any associated company drafted its investment prospectus. He also did not work alongside Mr. Lloyd Black in any capacity at all associated with the TPP’s public offering.” The same sidebars inadvertently mischaracterised a lawsuit that the National Bank of the Virgin Islands filed against Mr. Black, a former legislator who had served as the bank’s head of credit. After the company O.C. Enterprises sued the bank, accusing it of breaking a verbal loan promise, the bank made Mr. Black an ancillary claimant in the case. In its ancillary claim, the bank denied that Mr. Black made an improper loan promise, but it sought to make him liable if the court found that he in fact did so. The matter was resolved behind closed doors, and the Beacon was unable to obtain further information. The BVI Beacon deeply regrets the errors and apologises to all concerned.

About a year after the Hodges received permission to commence the project, their mortgage was discharged by then-NBVI Head of Credit Lloyd Black. They then struck a new deal through Mr. Black — who served as a National Democratic Party legislator from 1999-2007 — taking out a $5,509,289 mortgage at 2.5 percent above the New York base rate for the first five years of the loan, “and thereafter at such rate as shall be determined by the bank,” according to land records. The New York base rate has been around 3.5 percent since 2008.

In February 2013, the bank refinanced the Hodges’ mortgage one more time, increasing their line of credit to $6,309,289 under the same interest terms as the previous mortgage, land records show. Mr. Black reportedly left the NBVI that same year for reasons that weren’t made public, and would later be involved in a lawsuit involving the Hodges and the national bank in 2014 (see sidebar on page one).

Auction

The NBVI’s Nov. 22 public auction notice suggests that the Hodges likely defaulted on the 2013 mortgage: The notice cites that mortgage and states that the sale is in accordance with the Registered Land Act, which allows creditors to sell mortgaged property if the property’s owner becomes delinquent.

The starting price for the Omar Hodge Building is $7.2 million, the notice states.

Money from the auction would likely go towards repaying what’s owed by the Hodges — reducing the bank’s bloated non-performing loan portfolio (see sidebar) — and the Hodges would keep the remaining proceeds from a potential sale once the mortgage is paid off, according to a source familiar with banking and finance.

If the building doesn’t sell, the Hodges would likely retain possession of it, and the bank could resort to another measure such as garnishing lease income from the complex, the source stated.

Any potential buyer may be subject to a caution on the building issued in June 2014 by Medicure directors Dr. Heskith Vanterpool and Dr. Hubert O’Neal, which “forbids the registration of dealings and the making of entries in the register… without [Medicure’s] consent.”

According to documents at the Land Registry, the caution stems from an agreement that Medicure — a tenant of the building — made with the Hodges in 2010 and 2014.

According to that agreement, in 2010 Medicure made a $300,000 loan to the Hodges, the outstanding balance of which stood at $406,400 as of April 30, 2014.

Medicure then loaned the Hodges another $500,000 in May 2014 for the purpose of “carrying out various renovations and improvements to the building,” the agreement states.

Dr. O’Neal declined to comment on what any potential sale of the Omar Hodge Building could mean for Medicure as both a creditor and tenant of the complex, and Dr. Vanterpool did not return phone calls seeking comment.

Dr. Hodge and NBVI Chairman Clarence Faulkner also declined to comment for this story. Attempts to reach Mr. Hodge were unsuccessful.

TIMELINE:

Legislators, loans and lawsuits

• 1986: Then-Deputy Chief Minister Omar Hodge and his wife, Dr. Miriam Hodge, lease two lots of Crown land in Road Town, reportedly for $67,000, and start construction on what is now known as the Omar Hodge Building.

• 1989: Construction on what was then an $800,000 two-storey complex is mostly complete. Businesses start to move in and occupy the building.

• May 2011: The Hodges take out a $4,160,076 mortgage on the Omar Hodge Building from the National Bank of the Virgin Islands. Then-NBVI Managing Director Doris Scatliffe signs off on the loan, which carries an interest rate of 6.5 percent per annum to be paid in monthly instalments until April 2027.

• June 2011: The Planning Authority denies the Hodges’ application to add a fourth floor on the Omar Hodge Building on the grounds that it would make the structure taller than the 45-foot maximum allowed by law; that it would adversely impact traffic flow and parking in the area; and that it would require two additional fire exits. Available documents at the Town and Country Planning Department do not state when they originally filed the application to add a fourth floor.

• September 2011: An appeals tribunal composed of Delvin Mercer, Edwin Adams, Cecil Dawson, Robert Wells, and Albert Wheatley overturns the Planning Authority’s denial of Mr. Hodge’s development application. The appeals tribunal grants permission to add the fourth floor without any conditions. Public documents do not state how the tribunal came to that decision. A revised planning application from that month states that the project is expected to cost $1.54 million.

• November 2011: National Democratic Party candidate Alvera Maduro-Caines upsets Mr. Hodge to win the District Six seat in that year’s elections.

• August 2012: Ms. Scatliffe retires from the NBVI.

• September 2012: Then-NBVI Head of Credit Lloyd Black, a former NDP legislator, discharges the $4.16 million mortgage the Hodges took out in May 2011. That same month, the Hodges and Mr. Black agree on a new $5,509,289 mortgage at an interest rate of 2.5 percent above the New York base rate for the first five years of the loan, “and thereafter at such rate as shall be determined by the bank.”

• February 2013: Mr. Black discharges the September 2012 mortgage, too. The Hodges and Mr. Black agree to another mortgage, this one with a $6,309,289 loan with the same interest terms as the previous one. Mr. Black reportedly leaves the bank later in the year for undisclosed reasons.

• February 2014: The Hodges sue the NBVI for allegedly not disbursing some $700,000 of a $1.5 million loan they claim they agreed to with Mr. Black to help fund the Omar Hodge Building expansion project. Documents obtained by the Beacon don’t state whether the funds referenced in the lawsuit are connected to the mortgage.

• June 2014: After the Hodges sue the NBVI, the bank in turn files a legal claim against Mr. Black. Though the NBVI denies the Hodges’ claims, it nevertheless asks the court to determine whether Mr. Black should be held liable if those claims are successful.

• July 2, 2014: Mr. Black receives a $16,000 consultancy contract to work with the BVI Ports Authority. Officials have not responded to questions on why Mr. Black was hired, what duties he performed, or whether his contract was extended.

• July 14, 2014: The High Court sends the lawsuit between the NBVI and Mr. Black to mediation, effectively keeping the proceedings secret by requiring both parties to sign confidentiality agreements.

• Nov. 13, 2014: The Hodges and the NBVI reached a settlement in their case, the results of which aren’t public because the parties “further agreed to keep the terms of the said agreement private and confidential,” according to court documents.

• Nov. 24, 2016: The NBVI publishes a notice announcing that it is putting the Omar Hodge Building up for sale in a public auction, citing a law that allows it to sell mortgaged property in the event of a default. Final bids are due by 2 p.m. Wednesday, and the auction is scheduled for 10 a.m. next Thursday at O’Neal Webster law firm in Road Town.

This timeline has been updated to correct inaccuracies pertaining to the lawsuit against Mr. Black, and to NBVI Chairman Clarence Faulkner’s role with the Tortola Pier Park’s public share offering (see correction sidebar for details).

 

Ports hired ex-NDP minister after NBVI sued him Lawsuit settled in secret By KEN SILVA  ksilva@bvibeacon.com On June 16, 2014, the government-owned National Bank of the Virgin Islands filed a legal claim against its former head of credit, Lloyd Black, asking the High Court to determine whether he should be liable for a lawsuit the bank was facing from the company O.C. Enterprises. Less than a month later, Mr. Black — who served as a National Democratic Party legislator from 1999-2007 — was given a $16,000 consultancy contract by the BVI Ports Authority, according to documents obtained by the Beacon. Officials didn’t respond to questions about why Mr. Black was hired by the BVIPA, what duties he performed, or whether his contract was extended. Mr. Black also did not respond to requests for comment. O.C. Enterprises owners Omar Hodge and Dr. Miriam Hodge filed a claim against the NBVI in February 2014 for allegedly not extending the remaining $700,000 of a $1.5 million loan they claimed they had agreed upon with Mr. Black to help fund the Omar Hodge Building expansion project. The national bank, in turn, made Mr. Black an ancillary defendant in the case. According to the bank’s ancillary claim form against the former legislator, the Hodges accused Mr. Black of providing them $800,000 “with the mutual understanding that such sum was intended as an advance payment for the said $1,500,000.” The bank denied the Hodges’ allegation, but nevertheless asked the court whether Mr. Black should be liable if the Hodges’ claim turned out to be accepted by the High Court. The bank added that there are no records to prove Mr. Black made any such commitment, and that he would have been acting outside his authority if he did in fact make that promise, the claim form states. The outcome of that case, however, was kept secret. Twelve days after Mr. Black received his $16,000 consultancy contract with the BVIPA, his dispute with the NBVI was sent to mediation, requiring both parties to sign confidentiality agreements. Then, in November 2014, the Hodges and the NBVI reached a settlement, the results of which aren’t public because the parties “agreed to keep the terms of the said agreement private and confidential,” according to court documents. The case’s last entry at the High Court Registry was made on Dec. 18, 2014, and states that the case is discontinued and that NBVI paid Mr. Black $9,000 in court costs. This sidebar has been updated to correct inaccuracies pertaining to the lawsuit against Mr. Black, and to NBVI Chairman Clarence Faulkner’s role with the Tortola Pier Park’s public share offering (see correction sidebar for details).

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