A 3,800-room resort development will begin rising soon along Nassau’s Cable Beach in an effort to revive the fabled strand of white sand to its former glory. The Baha Mar resort will include six hotels, a new casino and an 18-hole golf course — but in an unusual twist, it will be built largely with Chinese financing and the labor of Chinese workers.

“It’s an exciting time for us and the Bahamas,” said Don Robinson, president of Baha Mar Resorts, the developer.

When the $3 billion project is finished at the end of 2014, it will rival the size of Atlantis, the 4,000-room water-themed resort that dominates Nassau’s Paradise Island, and could provide stiff competition. Baha Mar developers call the 1,000-acre project the largest “single-phase” resort development in the history of the Caribbean. Atlantis was built in three phases.

China State Construction and Engineering Corp., the largest construction company in China and the firm that built the Bird’s Nest stadium and the Water Cube aquatics center for the 2008 Beijing Olympics, will be the general contractor and will be doing all the concrete and steel structure work.

And in a departure from its usual lending to government and financial institutions, the government-owned Export-Import Bank of China will be getting into the hospitality business, providing $2.4 billion in financing for the project, said Robinson, a former Disney executive.

“This is certainly a break-through for the Chinese,” said Scott Berman, a hospitality consultant for PwC, the global advisory firm.

China State Construction also will be putting its own money into the project: about $150 million.

“I think part of what is behind this is proving that China Construction can build on the world stage. It’s a bit of a resume builder,” said Robinson.

To round out the project, Baha Mar –whose principal owner is the Izmirlians, an international business family with residency in the Bahamas — is contributing cash equity and the land, said Robinson.

The groundbreaking for the mega-resort was Monday. The first nine months will be devoted to rerouting roads and constructing new ones to accommodate the project, which also will include a 100,000 square foot casino and 200,000 square feet of convention space. The gaming license from the Crystal Palace Casino, which sits on the Cable Beach site, will be transferred when the new casino is ready. It will be the largest in the Caribbean.

Though many contracts have yet to be awarded, Rosewood Hotels & Resorts, Morgans Hotel Group and Hyatt Hotels Corp. have signed on to manage Baha Mar’s hotels.

Accommodating a project as large as Baha Mar will require infrastructure upgrades but Berman said he believes the Bahamas is up to the task. “This isn’t your father’s Bahamas. There has been a lot of investment in infrastructure,” he said.

An expansion and refurbishing of Nassau’s international airport is already underway.

Baha Mar has been a long time coming.

It has survived a change in government, the withdrawal of early partner Harrah’s Entertainment and a worldwide recession that dried up financing options.

About six years ago, the Bahamian government approached Sarkis Izmirlian, now chairman and chief executive of Baha Mar Resorts, about redeveloping the Cable Beach area. Once known as the Bahamian Riviera, it had started to lose its luster in the 1980s and 1990s.

To kick the project off, Baha Mar Development obtained the existing Cable Beach properties — Wyndham Nassau Resort & Crystal Palace Casino, Radisson Cable Beach & Golf Resort and the Nassau Beach Hotel — in 2005. The Nassau Beach Hotel was closed in January 2008 and Baha Mar spent about $150 million upgrading the Wyndham and the Radisson, which was converted into the Sheraton Nassau Beach Resort.

The ambitious plans eventually ran smack into the recession and a slump in Caribbean tourism. Even though financing was in question, Baha Mar pushed ahead and began bidding out various sub-contracts for the project, said Robinson.

The winning bidder on the concrete contract was China State Construction. “They said, ‘We believe in this project and we believe we can help you,'” Robinson said. That led to the introduction to the Export-Import Bank of China.

It took about 30 months of negotiation with the bank and it wasn’t until three weeks ago that all the funding was in place, Robinson said.

At the peak, he said, there will be about 5,000 Chinese workers on the project and some 2,500 Bahamian construction workers. The Bahamian government says about 4,000 Bahamians will be involved in the construction.

Some $400 million in contracts has been set aside for Bahamian firms and more than $50 million worth has already been let to Bahamian companies for work on a Baha Mar commercial village.

But Sol Kerzner, chairman and chief executive of Kerzner International Holdings — the parent company of Atlantis — has raised questions about the large Chinese workforce and has said it would be a breach of Atlantis’ investment agreement with the Bahamian government that said no subsequent investor would get “more favorable terms” than his resort.

Kerzner said Atlantis had to abide by a rule that at least 70 percent of its construction force would be Bahamian.

“There is no complication in fulfilling the agreement with Kerzner International in the immediate future,” said Anthony Capron, a spokesman in the Office of the Prime Minister. “In the first phase of development for Baha Mar, which includes road work and the development of a commercial village, almost 100 percent of the workforce will be Bahamian.”

Another question also looms in the Baha Mar-Atlantis debate: Will the Bahamas be able to support two huge resorts just five or six miles away from each other?

Developers say that when it is completed, Baha Mar will bring 430,000 new visitors to the Bahamas annually, create 8,000 permanent jobs and contribute $1 billion to the economy in new spending in its first year.

In an editorial that appeared in November just after final parliamentary approval for the project, The Tribune, a Bahamas media company, asked in an editorial: “Can the Bahamas absorb two mega-resorts? Maybe, and maybe not. Will Baha Mar and Atlantis going head-to-head cannibalize the market for high-end, luxury visitors, leaving each with a smaller piece of the pie rather than an expanded pie?

“Baha Mar,” it concluded, “is a journey into a brave new world.”

By Mimi Whitefield, The Miami HeraldMcClatchy-Tribune Regional News

source:www.hotel-online.com

Janet Lim