Capital G has taken over the stalled condominium project at the former Palm Reef Hotel site in Paget, The Royal Gazette can reveal.

And the bank is hoping the first owners will be able to move into the waterfront units on Harbour Road at the end of this month - more than three years after the development was supposed to be completed.

Capital G has taken over the development because the Palm Reef Hotel Ltd., which owns the freehold, failed to keep up with loan repayments.

Capital G is now “mortgagee in possession” of the site and has the right to dispose of it as it sees fit to recover its money, said Ian Truran, the bank's head of credit risk management. He said the 14 waterside units have all been given occupancy certificates and he hoped the owners could be in by the end of this month.

But the four roadside units are still empty shells, with the bank - which took possession of the complex last October - still deciding how to deal with them.

“Unfortunately, the project has not been successful financially, however Capital G, as mortgagee in possession, and the purchasers of the various units, have worked together to bring the project to a conclusion,” said Mr. Truran.

“All the waterside units have occupancy certificates and we are shooting for the end of June (for owners to move in). The outcome of the legal situation is dependant on planning issues.”

The two and four bedroom units, which were developed by the Wharf Development Company, were selling for between $700,000 and $1.7 million.

Mr. Truran said the sale price had not dropped and, in fact, the condos had appreciated in value.

Tennis star Patrick Rafter originally planned to buy one of the luxury units, but secured an agreement with the previous developers to pull out and get his money back plus compensation because of the delays.

Mr. Rafter's lawyer Wendell Hollis said yesterday his client, who paid all his money up-front, had now reached the same agreement with Capital G and that a new purchaser had been lined up to take his unit.

Once the new purchaser completes the paperwork, Mr. Rafter will be able to pull out and get his money back, he said.