FirstBank lawsuit is latest in string of court claims against St. Clair
A report released last week by research firm Boletín de Puerto Rico revealed that financial institution FirstBank had filed a civil lawsuit against entrepreneur Keith St. Clair and his businesses, Around the World Holdings and Noir, LLC, seeking to collect on more than $3.8 million on a defaulted loan.
The bank sought repayment of a loan granted in September 2018 to Noir, LLC, which Around the World Holdings guaranteed, and was to be repaid in two years. As part of the financing, First Bank required the companies to open a reserve account, which it claims St. Clair’s businesses also failed to do.
No payments have been made on the loan, the bank stated in its lawsuit.
While in written statements St. Clair said he was surprised by the lawsuit, he is not new to being the target of legal actions by a number of other plaintiffs who have gone after him in local and federal courts recently.
St. Clair, the administrating member of the two firms, issued a statement through his attorneys saying he learned of FirstBank’s action against him through the press.
“We have learned from the press that FirstBank filed a claim to collect money related to a development of great importance for Isla Verde. We don’t know the details, as they haven’t summoned us. It seems to be related to the rehabilitation and reopening project of the old Hotel Empress, now called Noir,” he said.
The Noir project was one of several hotel properties that St. Clair announced would become part of his “collection” in Puerto Rico, along with Mare (at the ESJ Tower), the Jade, as well as properties in Vieques and Cayey, worth $450 million in combined investments, as this media outlet reported. The portfolio also included a film production complex at the Miramar Convention Center District.
Although the opening of some of those properties was expected to happen in 2020, work has been slow, if not completely halted, on most of them. Sources have attributed that to the COVID-19 pandemic.
“We will not make statements about legal issues. However, we’re surprised by the filing of the lawsuit by FirstBank, because — in these difficult times for the tourism industry, given the pandemic and the closures ordered by the government — we were actively negotiating alternatives with FirstBank to address this issue,” St. Clair said in the statement.
“We will continue to focus on continuing to invest and create jobs in Puerto Rico, while solving the difficulties of the economic crisis in the tourism sector,” he said.
St. Clair arrived at Puerto Rico in 2016 and signed up for benefits available under the government’s Act 22, or the Individual Investors Act, which provides significant tax exemptions to investors who relocate to the island and create jobs. Soon after, he began announcing development projects.
One of those was a $12 million investment in the ESJ Tower condominium, where he owns 55 hotel rooms. There are 150 full owners residing in the Isla Verde beachfront property, who have repeatedly expressed their discontent over the changes St. Clair has made to the tower.
“The government of Puerto Rico gave him nearly $5 million in tax incentives. Any money he put into the building is the money of the Homeowners Association. He collected over $6 million in insurance proceeds from Hurricane María. He has never disclosed what he did with those monies. He collected assessments for rehab of timeshare units. He pocketed money and did little in the way of repairs. This took place beginning in the Spring of 2017,” said a resident at the ESJ Tower.
The British entrepreneur has been on the receiving end of several breach-of-contract lawsuits in recent years.
In October 2019, a Carolina-based firm called Caribbean Climbers Corp. filed a claim at the Carolina Superior Court against ESJ Tower and the St. Clair Collection to collect $38,750, or about half of what it was due for a contract signed in April 2018 to remodel, do external repair work, and paint the building.
Two months later, in December 2019, security firm Ranger American of Puerto Rico filed a claim against the ESJ Tower Hotel (Mare) at the same judicial forum, seeking the repayment of more than $160,000 for services rendered. The company claimed it unsuccessfully sought to settle the breach of contract out of court.
In May 2020, Spartan Staffing Puerto Rico — now known as PeopleReady — filed a complaint at the US District Court for Puerto Rico against ESJ Towers and Mare seeking repayment of some $641,382 in fees for temporary employees hired to work at the property.
In the civil case, the defendants allegedly told PeopleReady in February 2020 that they had no money to pay the debt.