by Richard Coulson
When I visited the new President of the Baha Mar resort complex last month, a digital count-down clock hung on the wall facing his office. It read 88-23-44-16, marking the days, hours, minutes and seconds until 12:00 noon on April 21 when a ribbon will be cut and festivities will begin, declaring the first phase at Baha Mar open for business and ready for guest check-in.
Graeme Davis is clearly a man under the gun. The genial 52-year-old American, a veteran of up-market hotel management after years with Rosewood and Starwood, is squeezed by his Chinese owners, our Prime Minister, the Chinese EXIMBANK (still technically the mortgagee-in-possession) and thousands of Bahamians seeking employment, to start earning s income from the 23-story pile of steel and concrete that has loomed over Cable Beach, empty but nearly finished, from its first aborted inauguration in March 2015.
He also holds the title of President, CTF BM Operations Ltd., the Bahamian subsidiary of CTFE-Chow Tai Fook Enterprises, the business conglomerate controlled by the Cheng family from their Hong Kong base with multi-national investments . Many Bahamians worry that the Chinese Government will be dominating our economy—and who wants to be subject to the whims of an authoritarian foreign mega-state? But CTFE is a different animal from the public enterprises directed by the Beijing regime. Created by one of the capitalist billionaires typical of Hong Kong, it operates on hard-headed commercial principles requiring all its far-flung businesses to show a profit, from hotels to jewelry to transportation to real-estate development, and minority positions in casinos.
Our press has been reporting heated debate about whether CTFE will truly “own” Baha Mar by the April 21st opening. The facts are clear. As usual in any major business transaction, first a binding agreement is signed, as CTFE has done, followed by conditions to be met before final closing, when it will repay the Chinese EXIMBANK mortgage loan and acquire title to the property. As Mr. Davis explained to me, the main condition is that the Chinese construction company known as CCA cleanly complete all the finishing touches to the project. His satisfaction with the contractor’s progress to date assures no repeat of the publicized controversy of 2015. EXIM also has strong motivation to get the deal completed. At long last they will be able to see this troublesome $2.5 billion loan repaid without suffering too much flak from their image-conscious politico bosses. And CCA will be free to nurture its own new baby, The Pointe project downtown—a separate story still to be told.
Neither Mr. Davis nor Senior Vice President Robert “Sandy” Sands, an experienced hold-over from the prior owner, expresses any doubts about successful completion, although they will be hard-pressed to meet the deadline . Ten thousand applicants for the 1,500 initial jobs must be screened and the successful ones hired and trained for their new positions. Casino equipment must be installed. Although air conditioning was never shut down, final decorating, detailing, and cleaning of 2,500 long vacant bedrooms and public spaces will be a labor intensive task. A sales program that is just getting started must be amplified, with the imminent appointment of a principal marketing/public relations firm and arrangement of welcome tours for travel agencies. The former curator of our National Art Gallery, artist John Cox, has been retained again to organize displays of Bahamian art throughout the buildings.
Mr. Davis and his administrative staff will have their hands full coordinating the activities of four separate hotels that will be renting from Baha Mar and operating under its banner. The separate Melia has been in full business for several years, but the towering Hyatt, with 1,800 rooms, and the smaller Rosewood (owned by CTFE) and SLS will be coming on stream for the first time. Although physically linked, each will want to publicize its own unique brand, possibly under a rubric like “Rosewood at Baha Mar”. The casino will be managed by a CTFE specialist company, once our authorities grant the expected license. Only 99 acres of the Jack Nicklaus golf course are leased Crown Land; the remainder of the 992-acre total project acreage, including the 335-acre footprint of the central complex, will be held in fee ownership acquired from the bank mortgagee.
Sophisticated accounting systems will be installed so that a guest in any hotel can bill just one account for all the 40 bars, restaurants and nightclub scattered through the resort. Locations and concession terms must be arranged for a score of locally-owned retailers who will demand high customer visibility. Spas and water-sports must be planned, as well as amenities for the Long Cay private island. Eventually, a sales program will cover the 300 condo units in the various hotels, as well as houses or apartments on adjacent land that stretches back to Lake Cunningham.
Reaching Mr. Davis’s second-floor executive suite with its glorious view of Goodman’s Bay gave me eerie memories as I trudged through the silent halls of the once vibrant casino, premises now scheduled for demolition. Over two years ago I took the same gloomy path to visit Tom Dunlap, Baha Mar President under chairman/owner Sarkis Izmirlian. An experienced construction executive previously with the Disney group, he cited his five years with Baha Mar as “the most painful in my career” but looked forward to a successful future, which was not to be.
Whether well-liked Sarkis was unfairly ejected from ownership by the Christie administration and whether the project would have prospered after emerging from Chapter 11 bankruptcy supervised by US courts, are issues that still arouse strong feelings and vigorous dissent. The original concept continues; these issues should now be relegated to history and the new owners encouraged towards their projected benefits for our country. Even the published lower estimates put direct new employment at 5,750-6,760 persons with payroll of $98-$115 million, with substantially higher figures if related suppliers and other affected business are included . Total economic impact is put at $915 million annually, a notable stimulus for our GDP, although we still need more diversity away from tourism.
From the very beginning, Baha Mar has drawn doubters and nay-sayers who predict that it is too grandiose ever to be profitable; that it will simply divide a static tourist supply with the proven appeal of Atlantis, to the detriment of both; and that our airlift is inadequate. The history of Miami Beach and other tropic resorts tells another lesson: build and they will come, the more the merrier. Certainly the sandy dunes of Collins Avenue became a thriving thoroughfare as every foot of beach frontage was filled by the glittering creations serving as a magnet for mass tourism. Airline and terminal capacity always manage to catch up with growing passenger demand, and the same will happen here.
Some would prefer Cable Beach to revert to a replica of Family Islands charm and tranquility—an unworkable illusion. Fortunately, we are an amazing archipelago that can give us both the dynamic, hustling growth of Nassau and the lonely beaches of keys and islands stretching some 700 miles into the trade winds. No other Caribbean nation enjoys the same blessing of geography.
Mr. Coulson has had a long career in law, investment banking and private banking in New York, London, and Nassau, and now serves as director of several financial concerns and as a corporate financial consultant. He has recently released his autobiography, A Corkscrew Life: Adventures of a Travelling Financier.
