The Government of The Bahamas is working speedily to conclude an agreement with the Baha Mar Development Company for the sale of the Radisson Resort and a separate heads of agreement for the billion-dollar redevelopment of the Cable Beach Strip, Prime Minister Perry Christie said on Thursday.
He spoke to reporters hours after the Baha-Mar group of investors sealed a deal with American hotelier Phil Ruffin to purchase his Wyndham Nassau Resort & Crystal Palace Casino and Nassau Beach Hotel.
The group, a consortium of major US and European investors, reportedly agreed to pay more than $150 million for the properties.
Baha Mar had intended to close the deal with Mr. Ruffin by February 17, but that did not happen.
Instead, the investors dismantled their offices in the Wyndham Nassau Resort on the same day they were expected to meet a deadline to acquire the property, threatening the government’s plan to sign off on the deal.
According to Mr. Ruffin, the investors may have had financial problems, resulting in the billion-dollar deal falling through at such a late stage.
At the time, he however stressed that if Baha Mar made another proposal proving up front that its financing was in place, he would take another look at considering the sale of the hotels.
On Wednesday, things seemed to be back on track with Baha Mar officials indicating that the project “is ready to go.
“The money is in place, the management team is assembled and our plans are developed. We can start immediately, Baha Mar Vice Chairman John Forelle said in a statement issued to the press.
The transaction allows for the completion of negotiations with the government covering the purchase of the adjacent Radisson Hotel property and Heads of Agreement.
According to the group’s President and Chief Financial Officer (CFO) Robert Heller, Baha Mar’s financial strength and the fact that the leading investor in the group is a 15-year Bahamas resident are key differentiating factors that have enabled the consortium to make this happen.
“Unlike so many developers that are reliant on finding outside investors for their equity, our ownership group is extremely well capitalized. We are providing well over $100 million in our equity just to acquire the Cable Beach properties and to begin an immediate upgrade, “Mr. Heller added.
“Scotia Bank, the largest lender to the Bahamian and Caribbean hotel industry is providing the bank loan.
In the release, Mr. Ruffin said he was happy to have concluded the deal and that The Bahamas will greatly benefit from the new development.
Mr. Ruffin has negotiated to keep his private 16-acre island, Crystal Cay, just off Nassau. It has 22 villas that he lets friends and business associates use.
“We had a really good offer,” Ruffin said yesterday in an article that appeared in The Wichita Eagle. “I’ve been there 11 years. It’s time to sell it.”
Mr. Ruffin plans to use the money from the sale of the Wyndham Nassau Resort and the Nassau Beach Hotel to carry out a major renovation of his New Frontier hotel and casino in Las Vegas.
He plans to replace the 38-year-old, 1,000-room hotel with a 3,000-room mega-resort.
Equally pleased about this latest development, Prime Minister Christie applauded both parties – Mr. Ruffin and the Baha Mar group – for reaching this stage.
“I ensured that both parties continued to have confidence in the overall need for the to be a sale and purchase and for there to be this proposed development for that to take place and to have the magnificent results that we believe will come about as a result of the proposal being executed, he told the press following his address at the introductory meeting of the Task Force for Community Development and faith-based initiatives.
According to Michael Sansbury, executive vice president of operations for Baha Mar, substantial investments to improve the room product, restaurant spaces, landscaping and to provide needed repairs will be made immediately on closing of the acquisition.
“Money will also be immediately invested in personnel development and technological advancement, Mr. Sansbury said.
“We have great plans for the properties while the Baha Mar project continues to be designed. We intend a full casino makeover, a tower renovation at the Wyndham and room upgrades at the Nassau Beach.
The prime minister has stressed that the agreement will also mean good news for the hotels’ employees, who need not be fearful about job losses as the project moves forward.
“This will mean that they are going to be a part of a new definition for how the properties are presented, presumably new marketing that would attract more people and therefore their jobs will enable them to spend more days than they are spending now – hopefully a full week – and be paid for that, Mr. Christie explained.
“And so clearly it’s a very comforting thought – the prospect of having a new owner come in, determined to redefine the product and determined – even before he begins his assault on the existing project – to actually make these properties look and function better.
It still however remains unclear whether Baha Mar would have to temporarily lay workers off when it undertakes a major renovation of the properties.
The plan also calls for the re-routing of the road and the implosion of some buildings along the strip.
According to Mr. Christie, the government and Baha Mar are now discussing various issues that have been placed on the table for the purchase of the Radisson Cable Beach Resort.
He admitted that while some of those issues can be easily addressed, others would have to be dealt with in “the next day or two.
“Very clearly now the most important consideration was having an agreement to buy the Crystal Palace hotel and casino and they have that agreement [and] our technical teams [are] addressing the issues, debating and negotiating wherever there are differences. My government will make the decision and move forward, the prime minister said.
By: Macushla N. Pinder, The Bahama Journal
