The acquisition was contingent upon the MOU. Frank Drohan, the president of both Alfa and JOL, tells GlobeSt.com via email he is currently in Oman negotiating to turn the MOU into a development agreement and will provide additional detail upon his return.
As currently planned, the project includes a theme park and exhibitions; hotels; restaurants; commercial and retail businesses; office space and residential units. The project would be developed under a new company--Journey of Light would be the majority partner and the Ministry of Tourism of Oman would be the minority partner--that would own and operate all of the business enterprises in the project and design, build and sell the residential component. As its contribution to the new project company, the Ministry of Tourism of Oman would transfer between 200 acres and 245 acres of beachfront land facing the Gulf of Oman for the tourism and commercial components of the project, as well as some of the residences.
In August, when the MOU was announced, Drohan told GlobeSt.com that the residential component of the project "is providing the financial viability" and that additional residential land would be provided by the Ministry of Tourism as is necessary to meet the project's minimum required financial returns as specified in the MOU. Drohan could not reveal the minimum required financial return due to a confidentiality agreement, but did say the total return on investment is expected to be in the high teens.
The cultural component--the seven Epcot-like structures and the surrounding exhibition areas--is the more commercially risky piece of the project but one that the government views as a "landmark" and, therefore, wants to control the content. The landmark portion of the project will be placed in a separate company that will be majority owned by the government. The landmark operations will be underwritten by the government and managed by the project company.
The development agreement is expected to be complete by the end of the year or shortly thereafter, Drohan said in August. "While we do not have a firm contractual agreement as of yet, we feel very positive," said Drohan. "There are two willing parties and there doesn't seem to be any major stumbling blocks."
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