Bahamas Prime Minister Agrees to Save The Baha Mar Casino and Hotel
Last month, the Prime Minister of the Bahamas, Perry Christie, declared that after two days of “successful meetings,” all parties involved in The Baha Mar Casino and Hotel project had decided to complete the remaining work on the project; the parties agreed to put a framework in place to supply the finances required to complete the construction.
Christie announced that his government has entered into a “framework agreement” to complete construction on The Baha Mar Casino and Hotel “as expeditiously as possible.” The USD 3.5 billion property, which was due to open in the month of December, two years ago, in 2014, is allegedly very close to completion but work on the site has been at a standstill for over a year.
The Baha Mar Casino and Hotel
The Baha Mar Casino and Hotel is owned by Baha Mar Resorts Ltd. and managed by CEO Sarkis Izmirlian. The luxury property, which is located just outside of Nassau and is being constructed on the island of New Providence, features planned amenities such as four hotels – Baha Mar Casino & Hotel, Grand Hyatt at Baha Mar, SLS LUX and the Rosewood at Baha Mar. The resort is to provide a total of 2,200 rooms, 284 private residences, a 100,000 square foot casino, a 30,000 square foot spa and the Tournament Players Club at their very own Baha Mar golf course.
The flagship of the project, the Baha Mar Casino & Hotel, has will house 1,000 hotel rooms, almost half of the rooms that have been planned for the entire project; the central building will also feature 1,100 slot machines and 150 table games at their casino, under the operation and management of Global Gaming Asset Management.
The redevelopment project was announced more than five years ago, on the 30th of March 2010; it was to be financed by China Exim Bank, while construction was to be carried out by China Construction America (CCA). The estimated cost for the whole project was calculated at around USD 3.5 billion.
Ground-breaking for the redevelopment was carried out almost a year after the announcement, on the 21st February 2011, with an expected completion date of 27th March, 2015.
However, with 97 per cent of the building work already completed, the construction on the project had to be halted in April 2016. The work on the site has been frozen for nearly a year, the company filed for a Chapter 11 bankruptcy on the 29th of June 2015 in a Delaware court, however, the case was dismissed in September 2015. The resort blamed delays in construction to the lack of flowing funds for the project, while the CCA blamed the delays on mismanagement of funds by the developer. A Bahamian judge put provisional liquidators in charge; a process where the company maintains their status quo and the assets of the company are safeguarded. Provisional liquidation is granted in most instances when it involves some type of allegation of fraud or other misconduct; unlike a conventional liquidator, it does not try to distribute the company's assets to creditors.
Rescue Plan for The Baha Mar
Christie, who was elected the Prime Minister of the country in 2012, used his annual budget address, last week, to reveal that Attorney General Allyson Maynard-Gibson and Senior Policy Advisor, Sir Baltron Bethel, had led a delegation to Beijing at the invitation of China Export-Import Bank and China State Construction Engineering Corporation (CSCEC) to discuss the stalled project.
The Prime Minister was pleased to announce that after two days of discussions, the parties involved have agreed to put a plan into place for the financing needs of the remainder of the construction on the Baha Mar.
“I am satisfied based on the statement and the assurances given in Beijing that every effort is being made to enable an earliest possible re-mobilisation and that adequate funding is in place to provide for the completion of the project and the satisfaction of the legitimate claims of Bahamian contractors and suppliers,” said Christie.
Christie explained that the plan calls for CSCEC’s indirect subsidiary, China Construction America (CCA) Bahamas, to continue being the main contractor for the project despite the allegations made against them by developer BMD Holdings for the previous delays.
Christie announced, “Negotiations between CCA Bahamas and the receivers appointed by China Export-Import Bank are underway to agree appropriate terms for construction to recommence and to prepare a construction agreement that will provide the schedule timeline for completion of the project. It is expected that many contractors who have participated in the construction of the project will be reengaged in this process.”
However, BMD Holdings is dubious of this arrangement and has declared in a statement that given the past performance of CCA Bahamas, there could be nothing that lent confidence to any expectation that the project would be completed to any schedule provided.
The statement from BMD Holdings said, “It is very discouraging that China Export-Import Bank, knowing full well the serious irregularities already demonstrated by its sister company, CSCEC, would now turn to this very same entity to complete the work that its subsidiary CCA Bahamas has failed to do time and again on previous schedules that it has provided. What we now have is the Bahamas being forced to witness to its potential detriment, as the former great baseball star Yogi Berra said, “déjà vu all over again” at the hands of CCA Bahamas.”
In the statement, BMD Holdings also called on China Export-Import Bank to take them up on an offer, which was first made in April 2016, that would reportedly see The Baha Mar Casino and Hotel opened successfully with unsecured creditors paid and no discount incurred by the bank on its funding of the project.
“We also look forward to a full hearing in the Bahamian court on the claims against CCA Bahamas and CSCEC for their lack of performance,” read the statement.