Tracking Baha Mar’s development trek
 
Tracking Baha Mar’s development trek
25 APRIL 2017 8:15 AM
Editor’s note: This timeline has been updated to reflect the soft opening of the resort on 21 April, along with some other developments.

GLOBAL REPORT—The development and construction of the Baha Mar resort complex in Nassau, Bahamas, has had a complicated road as the project’s Chinese financier and construction crews, the Bahamian government, the original developer and a new ownership group have wrestled over control of the resorts future.
 
Plans to build the 1,000-acre megaresort began over a decade ago. Baha Mar encompasses multiple properties, including a 1,000-room casino hotel, a 300-room SLS Lux, a 200-room Rosewood and a 700-room Grand Hyatt. The resort also features a golf course designed by Jack Nicklaus and a 30,000-square-foot spa.
 
Since its inception, the project has been billed as an economic engine for the Bahamas, with projections that it could grow the country’s gross domestic product by 12%.
 
Who are the major players?

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.
 
Here’s a rundown of the twists and turns of the megaresort’s windy road.



21 April 2017 – After years of waiting and multiple false starts, Baha Mar is finally operational, or at least a portion of it is. The first phase of the complex’s “soft-opening” includes the 1,800-room Grand Hyatt Baha Mar, a 95,000-square-foot casino and an 18-hole golf course designed by Jack Nicklaus.
 
Bahamian Prime Minster Perry Christie tells those present at the ribbon-cutting ceremony that the opening is not a “mirage” or an “ostentatious effort of misleading or misrepresenting.”
 
31 March 2017 – After some critics claim a phased opening of the Baha Mar resort complex is smoke and mirrors, Graeme Davis, Bahamas president of Chow Tai Fook Enterprises, responds that the company knows what it’s doing.
 
“There’s been speculation and talk in the papers—I don’t try to play politics, I can tell you that,” Davis said. “But I can tell you that I’m a lodging executive for 30 years. And I do know how to open a hotel. And when some people say that there are no reservations and how can we be opening, they’re not in the lodging business—we are.”
 
Davis also disputes political advertisements which claim CTFE is linked to organized crime.
 
21 March 2017 – China Construction America makes significant progress in getting the resort up to Bahamian code in the lead-up to the soft opening, with sources telling the Bahamas Tribune that the company has “moved mountains” to make sure it hits the 21 April opening.
 
Bahamian Prime Minster Perry Christie says the resort complex will be fully handed over to CTFE “sooner than planned.”
 
14 March 2017 – Despite announcements of an opening date in April, the resort is still not taking reservations as of mid-March.
 
13 March 2017 –
Bahamian politicians argue that the announced sale to Chow Tai Fook Enterprises is illegitimate and pledge to sell the resort “to a qualified and respectable purchaser who believes in Bahamians.”
 
10 March 2017 –
Bahamian Deputy Prime Minister Philip Davis announces the resort has hired more than 650 people from the country.
 
7 March 2017 –
In an announcement naming a GM for the SLS Baha Mar, SBE states the property is aiming for a fourth-quarter 2017 opening.
 
5 March 2017 –
Sarkis Izmirlian’s group blasts the Bahamian government and CTFE in a news release, claiming “the continued delays for Baha Mar’s completion, missed opening dates and now supposed staggered opening of the entire Baha Mar into late 2018 only highlight why BMD’s offer is superior and Bahamian workers and contractors should have been used.”
 
28 February 2017 –
Rosewood Hotels & Resorts, which is owned by Baha Mar buyer Chow Tai Fook Enterprises, announces plans for the Rosewood Baha Mar to open in the resort complex in spring 2018 instead of 2017. Rosewood was tied to the resort in the earlier days of its development but had dropped out of the project. Hyatt confirms plans for the Grand Hyatt Baha Mar to open in late April 2017.
 
22 February 2017 –
Comments by Graeme Davis, who leads CTFE’s Bahamian subsidiary, prompt a back-and-forth on the nearby New Providence landfill. After Davis expresses concerns about the landfill’s pollution, opposition party leaders in the Bahamian government claim that’s a sign CTFE didn’t do due diligence in their deal to buy the resort.
 
16 February 2017 –
Baha Mar officials state they’ve received more than 11,000 applications to work at the resort complex since mid-January.
 
27 January 2017 –
Graeme Davis, who leads CTFE’s Bahamian subsidiary, announces plans for the resort complex to open in phases, beginning with the 1,800-room Grand Hyatt Baha Mar on 21 April. Davis expects the SLS Baha Mar to open between September and November 2017 and the Rosewood Baha Mar to open in December 2017.
 
16 January 2017 –
Baha Mar officials formally begin recruitment efforts to hire for the resort complex and receive more than 1,000 resumes on the first day.
 
6 January 2017 –
Bahamian media report that the resort will pay no value-added tax, which means the government will forgo as much as $60 million in tax revenue.
 
12 December 2016 – Hong Kong-based Chow Tai Fook Enterprises announces the company has reached a deal to buy the stalled resort complex for an undisclosed amount. Along with that announcement comes news that the new ownership expects to complete construction and open the resort by April 2017, with an additional $200 million to be spent on “pre-opening activities.”
 
4 November 2016 – Government officials announced 200 companies in the country that are owed money for work at the resort will receive a collective sum between $8 million and $10 million as the next phase of repaying creditors.

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.
23 August 2016 – The Bahamian government announces construction will resume on the resort complex in September with plans to open in 2017. Prime Minister Perry Christie announces the government has reached an agreement with Chinese interests to sell the resort to an unidentified “world-class hotel and casino operator.”

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.
6 May 2016 – Once again, Bahamian courts delay action on the stalled resort complex, as the Supreme Court approves a five-month adjournment to allow a group of 16 potential buyers to work on a deal.

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.
18 November 2015Media reports that Sarkis Izmirlian, along with the other members of Baha Mar’s board, resigned, objecting to the direction the project is taking.
“We were directors of a company owned by Sarkis Izmirlian, and he no longer runs it, so it’s only fitting that we step aside,” board member Dionisio D’Aguilar told Tribune242. “We don’t meet any more; we don’t talk, and Sarkis is not involved in the property since it’s been in the hands of the liquidators, so there’s nothing else for us to do.”

11 November 2015 – A group representing Bahamian contractors who were working on the project said the country’s construction industry faced a “catastrophic collapse” if the project isn’t resurrected quickly so contractors can be paid $74 million owed to them soon.
 
10 November 2015 – With the Chinese interests in the resort complex angling to remove Izmirlian’s group from the project, several other groups arise expressing interest in taking it over. Interested parties include: groups lead by Sol Kerzner, a South African investor with a long history developing hotels in several countries including the Bahamas; and Andrew Farkas, chairman, CEO and founder of Island Capital Group.
 
Without naming which group is favored, Bahamian officials say they’ve struck a deal with new investors to finally complete and open Baha Mar.

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.)
 
23 October 2015 – The resort’s provisional liquidators request and are granted the ability to lay off more than 2,000 employees from the stalled resort. This encompasses 1,440 non-active employees and 580 active employees, including management. The move is made, the liquidators say, because of the resort complex’s financial insolvency. It is announced shortly afterward that the employees would not receive severance pay and benefits owed to them.
 
8 October 2015 – Negotiations to resume work on the stalled resort complex start anew between Baha Mar Limited, CCA Bahamas, the Export Import Bank of China, the Bahamian government and government-appointed liquidators. The firms appointed as liquidators, Krys Global and AlixPartner Services UK, describe the talks as “another important step on the road to resolution.”

24 September 2015 – Claiming a “much anticipated breakthrough” on the project, the appointed liquidators announce that CCA has returned to the project’s construction site to assess the work necessary to complete the project.
 
22 September 2015 – CCA Bahamas faces a lawsuit from the American company that demolished the former Nassau Beach Hotel. Controlled Demolition claims Baha Mar’s contractor never finished paying the full $7.6 million for the demolition, with an outstanding balance of $754,704.
 
15 September 2015 – The U.S. Bankruptcy Court dismisses Baha Mar Limited’s Chapter 11 case. Judge Kevin Carey says he “perceived no greater good” could come from allowing the case to proceed.
 
Carey allowed a small portion of the case to continue in the U.S., however, dealing with Orlando, Florida-based Northshore Mainland Services.
 
CCA Bahamas issued a statement soon after the decision saying it “protects the interests of all principal stakeholders and provides greatest certainty to the future of the Baha Mar Resort.”
 
11 September 2015 – The newly appointed liquidators pen a letter to the U.S. Bankruptcy Court saying they will not recognize its jurisdiction over the resort. They instead will defer to the Bahamian Supreme Court supervision to restructuring.
 
At this point, the liquidators say they have control of Baha Mar’s financial and real estate assets. 

4 September 2015 – Judge Ian Winder of the Supreme Court of the Bahamas approves the Bahamian government’s petition to appoint a liquidator to oversee the project while simultaneously setting limits to the liquidator’s power to prevent the depletion of the $3.5-billion resort’s assets. 
 
In a statement, CCA Bahamas, a wholly owned indirect subsidiary of China State Construction Engineering Corporation Limited and the construction manager/general contractor for Baha Mar, said: 
 
“CCA Bahamas welcomes The Bahamian Supreme Court's ruling to appoint provisional liquidators, which marks an important step forward towards addressing the challenges relating to the completion and opening of the Baha Mar resort.”

28 August 2015 – A U.S. judge says the Baha Mar bankruptcy proceedings could go a number of directions, but the continuation of the case depends on a Bahamian court approving the bankruptcy plan. 
 
The bankruptcy plan put forth by Baha Mar officials would remove CCA from the project.
 
27 August 2015 – Baha Mar officials announced the filing of a Chapter 11 reorganization plan in U.S. bankruptcy court.
 
26 August 2015 – China Construction America’s Bahamas officials accuse Sarkis Izmirlian, chairman and CEO of Baha Mar Limited, of transferring monies into U.S. accounts in an attempt to manufacture a U.S. connection to bolster his claim that the U.S. bankruptcy court has jurisdiction over Baha Mar. This is a claim that has been disputed by both the contractors and the Bahamian Supreme Court.
 
20 August 2015 – Rosewood Hotels and Resorts seeks to end its association with Baha Mar, saying the megaresort is tarnishing the hotel company’s brand. Rosewood officials said they hope to use Baha Mar’s U.S. bankruptcy proceedings as an out.
 
At this point, no realistic opening date is on the horizon.
 
19 August 2015 – The hearing in Bahamian court on the government’s request to appoint a liquidator took place on 19 August through 21 August. Bahamian Supreme Court Justice Ian Winder is expected to issue a decision on 4 September.
 
31 July 2015 – An important hearing in Bahamian court on the government’s request to appoint a liquidator is postponed.
 
22 July 2015 – The Bahamian Supreme Court refuses to recognize Baha Mar’s U.S. bankruptcy proceedings. 
 
17 July 2015 – The Bahamian government moves to seize and liquidate Baha Mar.
 
30 June 2015 – Baha Mar files a claim in English High Court seeking “financial remedies” from China State Construction Engineering Corporation and subsidiary China Construction America related to construction delays.
 
29 June 2015 – With the resort estimated to be roughly 97% completed, Baha Mar Limited voluntarily files for Chapter 11 bankruptcy in the U.S. In a news release, the company blames “the financial consequences of the repeated delays by the general contractor, and the resulting loss of revenue” as the reason for the bankruptcy.
 
The court filing detailed a series of accusations of stealing potentially damning documents made by Baha Mar officials against China Construction America, including a female CCA employee trying to sneak out documents under her clothing and CCA subcontractors trying to take computers hidden in luggage and suitcases.
 
May 2015 – Baha Mar’s May opening dates are missed. Soon after, Bahamian officials suggest that Baha Mar executives shouldn’t announce any more potential opening dates.
 
March 2015 – Baha Mar’s soft opening is pushed back from 27 March to some point in May.  Rosewood Hotel Group confirmed plans to open the 200-room Rosewood at Baha Mar on 7 May, and the 700-room Grand Hyatt at Baha Mar was slated for a 1 May opening.
 
July 2014 – Baha Mar officials confirm the resort won’t be ready to open in December as planned. A new opening is slated for late spring 2015.

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%.

21 February 2011 – Construction crews break ground on Baha Mar, almost six years after Sarkis Izmirlian purchased the property and months after developers had originally hoped to have it open and operating. The work is funded through a 20-year, $2.45-billion loan from the Export-Import Bank. That loan, along with $150 million from the contractor and $900 million from Baha Mar Limited, brings the project’s total investment to $3.5 billion. The resort is now expected to open by the end of 2014.

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.

November 2008 – Baha Mar Resorts Limited files suit in New York claiming Harrah’s Entertainment was secretly planning to delay or quash the project to avoid paying a $212-million equity share. That suit was thrown out in early 2010 when a New York State Supreme Court judge declares Harrah’s was within its rights to terminate the joint-venture agreement.
 
March 2008 – Just a month after developers secured a new deal with the Bahamian government, Harrah’s backs out of the project, citing concerns that Baha Mar could not be completed as “originally contemplated” and that it would “prove more harmful for all to move forward.” Izmirlian’s group describes the move as a “breach of faith.”
 
January 2007 – Baha Mar Resorts Limited and Harrah’s Entertainment announce a finalized joint-venture agreement for Baha Mar with the planned cost of the project now growing to $2.6 billion. The finished resort complex would be 57% owned by Baha Mar Resorts and 43% by Harrah’s. The JV also signs a management agreement with Starwood Hotels & Resorts Worldwide. The megaresort now is expected to open in early 2011.
 
October 2006 – The developers managed to reach a deal with the Bahamian government in 2005 that would provide for deferred taxes, a $20-million contribution to the project and various infrastructure improvements but are unable to meet several financing and planning benchmarks for the deal by the October 2006 deadline. That includes falling short of their goal to raise $400 million in capital.
 
November 2005 – The Baha Mar development is officially announced as a $1.6-billion joint project with Izmirlian’s group, Harrah’s and Starwood Hotels & Resorts Worldwide. Ground is set to break in 2007 with an expected opening in 2010.
 
April 2005 – Sarkis Izmirlian, the son of billionaire Dikran Izmirlian, uses a $200-million loan from Scotiabank to fund the purchase of a group of properties including the Nassau Beach Hotel, which was later rebranded as Sheraton Nassau, and the Crystal Palace Casino. It would take five years for the Baha Mar group to settle that debt. It was eventually resolved with a debt-for-equity swap, but the bank ended up taking a $75-million net loss on the deal.
 
Early 2000s – After talking American investor Phil Ruffin into buying a large swathe of Cable Beach in Nassau, Bahamas, in the 1990s, new Bahamian Prime Minister Perry Christie convinces Ruffin to sell off the land, including multiple hotels, to a development group called the Baha Mar Development Company, which is led by Sarkis Izmirlian.
 

Compiled by Sean McCracken.
 

3 Comments

  • Anonymous September 28, 2015 11:00 AM

    good grief. this is a twisted story from day 1. wow.

  • Anonymous March 19, 2017 3:19 PM

    Here's an update for you - as of March 19, 2017, all Bahamian workers and contractors/vendors have been paid monies owed them (or a substantial portion) from the 2015 work stoppage and consequent redundancy (layoff). No "foreign" employee has been paid a penny. Foreign contractor/vendors were recently presented with offers at .02 on the dollar for monies owed them. It's not "better in the Bahamas" for expats!

  • anonymous March 29, 2017 4:29 PM

    freakin Chinese ruin everything. they should have used Bahamian workers from the start.

Comments that include blatant advertisements or links to products or company websites will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff.