Gigi posted this in July 2004. It is an article from the Tenerife Sun.
Within a matter of weeks, the Royal Sun had closed down completely. There is an ongoing legal dispute which has yet to be resolved.
"IT BEGAN as a dream but, after seven years as the self-proclaimed Jewel in the Crown of Los Gigantes, The Royal Sun aparthotel is being publicly revealed as the nightmare many have long suspected it was.
The huge edifice that overlooks the bay of Los Gigantes was suddenly besieged by Guardia Civil officers on Thursday, July 1, as La Caixa bank moved in to reclaim the 120 apartments that were supposed to be the complex's main money-spinner.
Holidaymakers were evicted and relocated to other hotels in the area. By the end of the week, all that was left useable of the clifftop complex were its two restaurants, the swimming pool, the Imperial Bar and a hastily opened new, free nightclub called El Escondite, The Hiding Place.
These areas, open to the public, remained under the ownership and control of Ken Boot, mastermind behind the entire Royal Sun complex,who opened it with a fanfare of publicity in October, 1997.
But the apartments, rented by Boot through his Giganclifts company, had been snatched back by the bank for non-payment of rent. And it threw into turmoil the 200 or so members of The Royal Sun Club who had paid many thousands of pounds in advance for holiday weeks "for the lifetime of the club".
That 'lifetime' now seems in danger of being cut short with the
snatchback of the apartments.
The dream of only seven years ago seems now a lifetime away.
But the seeds of today's nightmare were sown in the complicated
wranglings that accompanied the building of the complex.
It was originally built by a developer named Rodriguez using funds
provided by the La Caixa bank, financing the apartments, and Caja Canarias, financing the common areas.
But, as the apartments were nearing completion, La Caixa withdrew its funding and reclaimed the apartments.
That started a long legal battle that was still continuing this year as Rodriguez disputed the bank's right to claim the apartments.
Into this scenario stepped Ken Boot, an entrepreneur from Leicester with considerable experience in the holiday travel business including Diamond Holidays and Diamond Apartments, overlooked by the Royal Sun.
He crafted a deal with La Caixa and Caja Canarias, spending in the region of 'a36 million finishing and furnishing the apartments using money provided by a score of wealthy, mainly British investors. He had an open-ended agreement with La Caixa to rent the apartments with an option to buy if and when the bank successfully fought off the demands of Rodriguez for continued funding of the complex he had started.
Boot later negotiated a deal to buy the common areas from Caja
Canarias and open them to the public.
A cornerstone of the financial arrangements is believed to have been the setting up of the Royal Sun Club, operating from the Isle of Man to sell holiday weeks for upwards of 'a35,000 for a one-bedroom apartment. Unable to operate as a traditional timeshare company, selling escrituras for the apartments, the Royal Sun Club restricted its activities to selling occupancy rights for nominated weeks that would last for the lifetime of
the club. But, despite selling some 200 memberships, the anticipated earnings failed to materialise and sales were suspended about two years ago. Investors in the Royal Sun complex, already showing misgivings about the complex, now became decidedly edgy. Several attempts were made to wrest control from Ken Boot of the management company, Montagigan SL.
A manager, sent from England to assume control of Montagigan, stayed only a few months in the job before leaving, frustrated at his lack of success. Meanwhile, according to Ken Boot, he took the decision about 18 months ago to cease paying rent to La Caixa in an attempt to force serious discussion of outright sale of the apartments to Giganclift.
The bank refused to have any such discussions and, instead, asserted its claim to ownership by last Thursday week's eviction move. Ken Boot, who claims to have spent more than 'a33 million on the complex in the past five years, has been in further negotiations with the bank in Barcelona and is hoping for some kind of satisfactory conclusion "within weeks".
In the meantime the 45 regular staff are carrying on as best they can with fingers crossed. The curious public are being urged to pop up to the hotel and sample the facilities on offer. The heated pool is free and The Caf'e9 Royale and Regency Restaurant are still selling a full range of food and drink from one of the best viewpoints on the west coast. The new nightclub, El
Escondite is open to the public from 10pm till the early hours every