“A little less talk, a little more action please”, is the lead verse in the theme song for the TV show “Vegas”. And that’s the way real business people do business. This was highlighted Thursday when Las Vegas casino developer Phil Ruffin threw a group of Bahamian-based investors from his hotel on Cable Beach after they failed to come up with the $1.2 billion dollars necessary to seal the hotel deal.
Baha Mar Development, a hodge-podge group of Bahamian and international investors, were asked to leave the hotel office they were occupying at the Wyndham Nassau Resort after they failed to produce the monies. They set up a temporary office at the government owned Radisson Hotel next door.
The development group, headed by secretive Lyford Cay billionaire Dikran Izmirlian, were reportedly told to deposit their money into an account to secure the deal by 1:00pm Thursday or “forget it”. They were unable to meet the deadline despite having 120 days to do so. Instead, they came to the meeting whining for an extension to the 120-day due diligence period, which expired Thursday.
Ruffin threw them out of his hotel in a poignant lesson on how to do business.
Mr. Ruffin told a Bahamas newspaper yesterday that he was hoping that the Baha Mar Group would have been able to see its way clear to produce the monies for the deal. He thought the company’s plan was adventurous, to say the least.
“But the contract lapsed. So now they have no contract with us. They didn’t perform. I don’t know what will develop from here.” he said.
“In the end someone has to come up with money and that’s usually when the rubber meets the road, when someone has to come up with cash, and that has not happened.”
Part of the problem for the collapse of the deal has to be laid on the shoulders of the Bahamas Prime Minister Perry Christie, who is a big talker but is usually full of nothing but hot air.
Mr. Christie, who had been in talks with both sides on the deal, was all but promising an agreement way back in April, as well as in October, 2004.
During both those grand press announcements, Mr. Christie said that the deal would soon be finalized. However, the Prime Minister had to retract his optimistic predictions in April because the deal was placed on hold, reportedly over tensions between the interested parties who needed to cooperate to make it happen.
Later, in October, Mr. Christie again had to withdraw his announcement because Mr. Ruffin indicated at that time that the project was “up in the air,” as the Bah Mar group never “put money down.”
Then on Jan. 9, while on Island 102.9 FM’s talk show “Parliament Street,” Mr. Christie indicated that he was expecting the two sides to strike a deal the following week.
“The Cable Beach development will have to be sorted out very, very shortly. I would imagine we cannot go beyond next week without there being a decision between the government and the developers because the developers would need time to organize their financing,” he said.
But alas, Christie’s “do-nothing” government did nothing and the deal collapsed.
It may be a blessing in disguise because the hotel plan doesn’t make sense anyway. It calls for the creation of a mega-resort on an island that is already terribly over-crowded and where the government can not produce enough water or electricity to satisfy the current demand, let alone what would be needed after the redevelopment. Traffic congestion on New Providence island is also a huge problem and crime is out of control in Nassau. But the government of the Bahamas, desperate to attract foreign investment to prop up its shaky economy, would apparently build anything, anywhere, just to employ a few Bahamians. This short-sighted planning has been a hallmark of the current PLP government.
Ruffin, who dropped out of college to flip burgers, eventually bought stakes in oil and real estate. The Wichita, Kansas billionaire now owns 41 prime acres on the Las Vegas Strip, home to the New Frontier hotel/casino. The land alone is worth $1 billion. In July, Ruffin inked a deal with friend Donald Trump to build the 64-story Trump International Hotel & Tower; construction begins early next year. Mr. Ruffin is still searching for a partner to build 2 themed mega resorts on his site. His other holdings include: the Wyndham Nassau Resort and the Nassau Beach Hotel in the Bahamas, numerous convenience stores and hand-truck manufacturer Harper Truck. He is currently pushing Kansas state legislators to allow slot machines at his two greyhound race tracks there.
