The Las Viviendas Housing Project, conceptualised by one of the country’s largest credit unions, the Eastern Credit Union (ECU) to be built on 16 acres of land acquired by the ECU in Valencia, has obtained the approval of the Commissioner for Co-Operative Development, Karyl Adams, the regulator for the co-operative movement. The ECU is now set to proceed with the development.
ECU president, Wayne Estrada, told Business Day last week, “At this point in time we have had all the property, all 16 acres of land, conveyed to the Eastern Credit Union. Our programme now is that we are going to go ahead and develop the property as residential plots for our members and we want to put a branch up there.”
In a bit of good fortune for ECU, Estrada said the value of the estate, which ECU bought for $5 million had appreciated since its purchase and was now valued at $6.5 million.
He said the area is expected to see an increase in traffic following the prime minister’s announcement that Government would proceed with the construction of the highway to Mayaro. This was a factor in the increase in the value of the property.
Estrada said, “We need to satisfy the needs of our members, which was the original intent of purchasing the land. There is a shortage of housing and we want to do some middle income, low income housing up there. So we have set up a committee of four people, a committee of the board, to expedite the project. On that committee, we have engineers and architects. Some are board members of Eastern and some are board members of Eastern’s subsidiary, Eastern Properties Limited. (EPL).” He hoped he would be able to report significant progress on the project to members at ECU’s next annual general meeting.”
The Las Viviendas project stemmed from a mandate to the ECU board in 2013 to acquire land for housing. A housing committee was set up in March 2013 and in November of the following year the Las Viviendas estate was bought. It was originally offered to the ECU for $14 million, but after negotiations the credit union got it for $5 million and spent another $4 million to acquire architectural and other drawings which had already been done by the previous owner. Feasibility studies and a business plan projected a profit of at least $20 million from the project. Estrada said the purchase was approved by the board with the exception of one member.
Controversy overtook the project after allegations of irregularities surfaced following a change in the leadership of the credit union. The international chartered accounting consultancy, Pannell Kerr Forster (PKF); ECU’s supervisory committee; the Commissioner of Co-operative Development and Eastern’s internal auditor were all asked to investigate.
Credit union member, Harvey Borris, also criticized the Las Viviendas purchase. In a telephone interview, Borris said there is still an issue regarding the whole transaction. “What was paid for the property? What was paid for the drawings?” Told that the development had now been approved by the Commissioner of Co-Operative Development, Borris was unimpressed. “If you look at the minutes of the enquiry into the Hindu Credit Union, you will see that the former commissioner had complained that commissioners before him had issued approvals after the fact, which he said was illegal and was wrong. The law states that once it is an investment you must get the commissioner’s approval, you can’t approve it after the fact. And he said that type of thing must end and not happen again.”
Asked how long it will take for construction to start at Las Viviendas, Estrada, a former member of the Police Fraud Squad with more than 30 years of involvement in the credit union movement, said Eastern will not use its own cash to finance the development of the Las Viviendas project. “We’re going to do some borrowing from external sources because we have that opportunity. Instead of using up our cash, we would want to finance the project from outside. That being the case, it will take some time, together with planning and mobilisation to get the contractors, award a contract. So that will put us to maybe within a year to get things finalised, turning sod and start building.”
Estrada said that “recession or no recession,” the credit union was still committed to building Las Viviendas.