Montebellos and Massaleh: the unending saga of the Mistra mega-development

The site was to be turned into a 1,000-apartment project touted as “urban lifestyle at its best”, over 40,000 square metres of land and earmarked for completion in 2010. JPM Brothers formed Gemxija Crown Ltd, with Marem BV, the Dutch subsidiary of the Al Massaleh company. One of its former directors was Francis Vassallo, the former Central Bank governor, who is a director of Fimbank Group. Najeeb al Saleh is chairman of both Al Massaleh and Fimbank.

In the meantime, the Montebellos expanded their hold on the construction industry, with the acquisition of the Jerma Palace Hotel in Marsaskala from Libyan-owned Lafico, to also turn it into a high-end residential complex.

Their other main project was the A3 Tower in Paola, just outside the Addolorata cemetery, where they claimed the skyline with one of Malta’s highest towers. In the meantime, they purchased another hotel – the Galaxy in Depiro Street, Sliema – which remains unfinished.

A lack of cash flow must have plagued the development of the Mistra Heights project, held up by planning hiccups.

On 5 June, 2008 the MEPA board approved the outline development permit for the redevelopment of Mistra Village amid protests from NGOs who argued that the project is too big, creating a major visual impact and also increasing traffic, especially in Xemxija.

The European Commission then launched a review of the project, which comprised four high-rise towers, one of them 19 storeys high. Following a public outcry against the construction of a 19-storey tower, the latest Environmental Impact Assessment proposed its replacement with a “boomerang shaped” building stepping up from six to 11 and back to six floors.

Still, MEPA ignored the EIA’s conclusion that the project will still have a major impact on views from Mistra bay, despite the reduction in building heights.

Najeeb Al Saleh also had to step in to pay up some €750,000 in permits for MEPA, but the project then stalled again that same year in 2009.

As media interest on the vicissitudes of JPM Brothers, director Peter Montebello strove to assure the press that his projects were fully financed.

But in 2009, al Saleh’s Fimbank had to clarify that while his Kuwaiti real estate company was a shareholder in Gemxija, the bank had no direct relations with the Mistra project.

Montebello had insisted that Mistra was at a standstill because of planning bureaucracy, and that there were no negotiations for the Kuwaiti partners to take over. “How can we have problems financing this project if Fimbank is one of our partners?” Montebello was quoted as saying.

Fimbank issued a company announcement saying that it was neither a partner, nor a lender in the project.

The Montebellos: renovators for the minister’s villa

Enduringly etching the Montebello brothers in a slice of political history is their involvement with Finance Minister Tonio Fenech.

On 8 November 2009, MaltaToday revealed that the Montebellos, apparently occupied with such high-end projects as the Mistra, Galaxy and Paola towers projects, had been busy renovating Tonio Fenech’s semi-detached villa in Balzan.

It transpired that a sub-contractor – Rainbow Turnkey Projects – had been engaged by the Montebellos to carry out works inside the house, but then fell foul of an agreement to pay for the outstanding works.

When Rainbow’s director Charles Magro failed to get his payment, he told MaltaToday that Peter Montebello had told him the works were a favour for the minister, to intervene in the possible sale of the Jerma hotel to magnates George Fenech and Joe Gasan, chairmen of Tumas Group and Gasan Group respectively.

“Peter Montebello told us the works were ‘bi pjacir’, a favour,” Magro said. “We were instructed to keep costs to the bare minimum…

“He told me that Fenech was helping them sell off the Jerma hotel to Joe Gasan and George Fenech and the deal would soon be concluded,” Magro said.

The minister categorically denied he had asked JPM Brothers to carry out works in his private residence with the aim of concluding business on the Jerma sale. “It’s a lie. My arrangement with JPM Brothers was against payment, as according to their quote. Rainbow were sub-contractors for JPM Brothers and I cannot comment on the exchange that took place between them.”

Then on 15 November 2009, MaltaToday revealed the Prime Minister had been presented with plans from Gasan and Fenech for the Jerma Hotel at the beginning of the summer.

Further landing the minister in the soup was the embarrassing revelation dthat he had accepted a freebie trip aboard George Fenech’s private jet, to watch Arsenal play in Spain in May 2009, along with Gasan. The trip took place just weeks before the entrepreneurs’ meeting with Gonzi on their plans for the Jerma.

Gasan told MaltaToday he was “only consulted” on the Jerma plans, and that the person mostly interested in the project was George Fenech. “All I know is that I was asked for my opinion but after I looked into the Jerma proposal I backed out because I didn’t like the fact that the Montebello brothers were pressuring to hurry up the deal. They were asking for just a few weeks to conclude.”