Ginn Development Turns Out To Be Nothing But Hot Air
In a move that could have serious consequences for Grand Bahama, developers behind the Ginn Sur Mer project have announced that they will have to make "difficult decisions relating to the "management and oversight" of their property in West End after again missing a deadline set by their money lenders.
While it was not confirmed yesterday, there is a possibility that the lenders behind the $675 million loan that backs part of the company's Grand Bahama property as well as three other Ginn properties in the United States may foreclose on the four properties in view of the missed deadline.
Development companies affiliated with Bobby Ginn had been given 30 days - until Thursday, July 31 - to work out a solution to their financial woes after defaulting on a loan repayment on June 30.
The month-long period was intended to give them time to restructure their loan and work out a new payment plan, thereby avoiding foreclosure on their properties.
However, the Thursday deadline came and went without the Ginn affiliates concluding the issue with their lending syndicate as was hoped.
On Saturday the North Carolina-based Winston-Salem Journal reported that Ginn Clubs & Resorts continues to negotiate with its lenders to reach a solution to the situation.
Last week Tribune Business said that it understood that about half of the land ear-marked for the Ginn Sur Mer project in West End comes under the umbrella of the defaulted loan.
Prime Minister Hubert Ingraham claimed last week that the infrastructure work and golf course development at the site will not be impacted by the company's loan default, as money was already escrowed in the bank to cover this work.
This meant that Ginn had been able to "ring fence" these funds so that they cannot be "called in" by the lenders.
However, it is not clear to what extent the default and subsequently the failure to restructure the massive loan will impact the rest of Ginn's plans.
It has been suggested that lenders behind the $675 million loan may be negotiating with Ginn Clubs & Resorts to take a stake in the $4.9 billion Grand Bahama project in return for wiping out the company's debt, but this has not been confirmed.
The Tribune attempted to reach representatives of Ginn Sur Mer yesterday for comment, but an e-mail was not returned. Messages left for Minister of State for Finance, Zhivargo Laing, and MP for West End Obie Wilchcombe were also unreturned.
"Although negotiations with the lending group have been, ongoing and are continuing, our agreement did expire," Robert Gidel, the president of Ginn Clubs & Resorts said in a statement released to the Winston-Salem Journal, in North Carolina, on Friday.
"Negotiations for a resolution are continuing, and at this time, we remain optimistic that this credit facility will be restructured in a manner beneficial to all parties," he said. A credit facility is a type of loan.
Mr Gidel added, however, that the failure to reach an agreement on the loan means that it will affect the Grand Bahama property, as well as the Laurelmor resort in North Carolina, and the Tesoro and Quail West resorts in Florida.
Mr Gidel previously put the company's inability to meet the June loan repayment down to the "ongoing slowdown in the residential real-estate market."
The slower than expected sale of homes, needed to fund the development's future expansion, has apparently hit the developers hard.
Ginn Sur Mer sits on 1,957 acres of oceanfront property in West End, Grand Bahama.
The planned 4,400 condominium and hotel units, centred on a 20-storey tower with 1,800 single family residence sites, we were expected to inject hundreds of millions of dollars into Grand, Bahama's sluggish economy.
Last week Minister of State Zhivargo Laing said he was aware of the fact that Ginn had missed the initial June 30 loan payment, but had no further information on the situation.
The MP for Marco City, Grand Bahama, expressed hope that the project would still move forward.
"The reality is, if you have an economic activity that is proposed for an island - especially an island with economic challenges like Grand Bahama - it's helpful for those projects to go forward. Ginn being what it is, and as sizeable as it is, it would be important."
By Alison Lowe
Tribune Staff Reporter