GLOBAL REPORT—The road to Baha Mar’s opening continues to grow longer and more complicated as the developer, Chinese financier and construction crews, and the Bahamian government continue in a power struggle for the resort’s future.
|Sarkis Izmirlian: CEO and chairman of Baha Mar Limited. He purchased the property that would eventually become Baha Mar in 2005. Izmirlian is the son of billionaire Dikran Izmirlian.|
|Baha Mar Limited: The development company behind the 1,000-acre, $3.5-billion Baha Mar megaresort.|
|China State Construction Engineering Corporation: A Chinese state-owned construction company. Its subsidiaries China Construction America and CCA Bahamas serve as contractor for Baha Mar.|
|The Export-Import Bank of China: The Chinese institutional bank that has loaned the developers more than $2 billion for the project.|
27 October 2016 – Chow Tai Fook Enterprises, which owns Rosewood Hotel Group, announces it is in negotiations to buy Baha Mar. The company also has applied for approval from the Bahamian government.
Critics of the potential sale claim CTFE was denied casino licenses in the U.S. due to alleged connections to organized crime in Asia, which company officials flatly deny saying the company never applied for licenses in the U.S. and have been approved in countries like Australia.
25 October 2016 – Izmirlian’s group claims they have made a “superior offer” to repurchase the property but has not received a response from the Export-Import Bank of China or Perfect Luck Holdings Limited.
17 October 2016 – A statement from the Prime Minister’s office confirms the resort has been purchased by Perfect Luck Holding Limited. The government then states it will not intervene in the process to aid Izmirlian.
Perfect Luck is expected to resell the resort after its completion and is described in media reports as an affiliate of the Export Import Bank of China, the project’s primary lender.
3 October 2016 – Seven companies tied to Izmirlian are put into full liquidation, meaning he faces “the total loss” of their $800-million to $900-million equity investment in the Baha Mar project, according to Tribune 242.
27 September 2016 – Prime Minister Perry Christie says the still-unnamed Chinese buyer meets the government’s requirements. At the same time, a Bahamian Supreme Court ruling clears the way for the resort to be taken out of receivership and placed under the control of a special purpose vehicle owned by the Export-Import Bank of China in anticipation of the final sale.
The ruling provides some new information about the sale process, including that 17 groups expressed interest in the resort but just five put in bids, all of which were ultimately rejected before the buyer stepped up from “outside the bidding process.”
23 September 2016 – Deputy Prime Minister Philip Davis said construction would resume on the resort within two weeks.
20 September 2016 – Receivers at Deloitte & Touche deny reports that Fosun Group is the Chinese interest buying the resort.
16 September 2016 – Employees are told they are offered end-of-September payouts on a “take it or leave it basis.” The money for the payout is deposited by the Export Import Bank of China around 19 September.
14 September 2016 – Bahamian tourism officials said Hyatt Hotels Corporation and SBE Entertainment Group have “recommitted” to Baha Mar, promising to keep plans for a Grand Hyatt and SLS, even though Rosewood Hotels & Resorts backed out in 2015.
That agreement includes plans to at least partially pay unpaid contractors, which had been a sticking point for many.
16 August 2016 – A report on the economic impacts of the stalled project claims that the Bahamas missed out on $2 billion in gross domestic product over 18 months due to the construction halt. This includes $1 billion in direct revenue, and $315 million in taxes and $451.3 million in salaries and wages.
An estimated $35 billion could be lost through 2034 if the resort remains closed.
23 July 2016 – Without naming who they are, government officials say two groups are identified as “preferred bidders” for the Baha Mar property. The groups were selected by receivers at Deloitte & Touche.
21 July 2016 – Izmirlian files a summons in the Supreme Court of the Bahamas seeking to move the Baha Mar project from provisional liquidation to full liquidation, which a government official claimed was a move meant to complicate a possible sale.
15 July 2016 –Prime Minister Perry Christie’s administration is criticized for being secretive about Baha Mar-related negotiations.
10 July 2016 – Receivers with Deloitte & Touche publicly deny claims that the Baha Mar development is uninsurable and will cost and additional $1.8 billion to get up and running.
29 June 2016 – A petition filed by Izmirlian’s Granite Ventures seeking control over a $192-million claim against China State Construction Engineering Corporation is dismissed by the Bahamian Supreme Court. The decision was appealed on 13 July 2016, with Izmirlian’s group claiming the court improperly based the decision on “unfiled evidence.”
25 May 2016 – Government officials say court-appointed receivers put together the framework of a deal with The Export Import Bank of China and China State Construction Engineering Corporation to complete the project. Later reports reveal that the groups assured government officials they would complete the project if Chapter 11 bankruptcy proceedings were halted.
A court-appointed receiver says Baha Mar will be sold before September.
12 April 2016 – Original developer Sarkis Izmirlian takes another swing at gaining control of the resort property, reaching out to the China Exim Bank to say he could get the property opened successfully.
But Izmirlian says he can’t join a formal bidding process due to litigation issues. Court-appointed receivers say they can’t negotiate a deal with Izmirlian.
7 April 2016 – The Bahamian Prime Minister Perry Christie holds bilateral meetings with “high-ranking” Chinese officials in an effort to expedite the opening of the resort complex.
30 March 2016 – Receivers Deloitte & Touche say Izmirlian is barred from speaking with bidders for the property.
23 March 2016 – Colliers International of Toronto is hired to line up potential buyers for Baha Mar. The company did not list the resort but is charging a $50,000 deposit to interested parties.
15 March 2016 – Christie says there are few signs of progress in Baha Mar’s “extremely complicated” plan.
He said the failure of the development has negatively affected growth rate projections for the Bahamas.
25 February 2016 – Bahamian officials say they’re losing faith that 2,000 laid-off workers will be brought back in the near future to finish work on Baha Mar.
23 February 2016 – Possible buyer Andrew Farkas, of Island Capital Group, says the earliest potential opening for Baha Mar is now Thanksgiving 2017.
Meanwhile, former Baha Mar board member Dionisio D’Aguilar says the Bahamian government should force Chinese interests to auction off the resort.
2 February 2016 – Both Bloomberg and The New York Times examine how Baha Mar developers and financiers found themselves in their current position, and how it is affecting the 2,000 laid-off workers displaced by the standstill.
1 February 2016 – A Bahamian judge admits the two-month window for stakeholder negotiations are not enough to move the project forward.
24 January 2016 – Bahamas Tourism Director General Joy Jibrilu says that there are multiple entities “who have expressed an interest in purchasing Baha Mar” during the Caribbean Travel Marketplace.
Government officials say they are aware of “five or six” possible buyers.
29 December 2015 – Christie says he foresees an early 2016 completion for the resort.
Meanwhile, D’Aguilar says the China Exim bank-controlled receivership was slowing development after the Exim bank says it has preliminary plans in place to move the project forward.
26 November 2015 – The Bahamian Supreme Court delays ruling on a winding-up petition until 2016 to see if the receivership process can spur developments for the resort project.
30 October 2015 – The Bahamian Supreme Court appoints Deloitte and Touche as receivers of the troubled property at the request of the China Export-Import Bank. The move effectively takes Izmirlian out of the decision-making process on the resort. He responds by saying the move “continues the unfortunate pattern of disastrous actions taken by other stakeholders” in the resort. (Click here to read his statement.)
|A look at construction on Baha Mar as of March 2013 (Photo: Baha Mar)|
2011-2014 – With construction underway, resentment grows among Bahamians as roughly 4,000 Chinese workers are flown in to serve as construction crews on the resort. The project was sold as an economic driver for the Bahamas, so many in the country are unhappy to see a 70% foreign workforce building the resort complex while the Bahamas struggles with a unemployment rate of roughly 15%.
|At the groundbreaking of Baha Mar with senior officials of the Bahamian government and Chinese government, dignitaries, delegates of the Export-Import Bank of China, China State Construction Engineering Corporation and the design and construction teams. (Photo: China Construction America)|
March 2009 – Baha Mar Resorts signs a formal agreement with the China State Construction Engineering Corporation to build the resort complex through its American subsidiary, China Construction America. The developers also sign a memorandum of understanding with the Export-Import Bank of China to potentially fund the project.
Compiled by Sean McCracken.