15 Sep 2014
US$3.5bn Baha Mar resort launch delayed until next spring
BY Helen Andrews
Originally scheduled to open in December of this year, the US$3.5 billion (€2.7bn, £2.2bn) Baha Mar resort complex in the Bahamas has delayed its debut until late spring 2015 due to a series of hitches.
The project is being financed by a US$2.5bn (€1.9bn, £1.5bn) loan from the Import-Export Bank of China, US$850m (€658m, £523m) in equity funding from developers, the Swiss-Bahamian Izmirlian family, and US$150m (€116m, £92m) in preferred equity from China State Construction Engineering – which is building the project, according to an article by HotelNewsNow.com.
Located on 1,000 acres along 3,000ft of Cable Beach in Nassau, the resort is set to feature a 1,000-bedroom casino hotel, a 700-bedroom Grand Hyatt, a 200-key Rosewood and a 300-bedroom SLS Lux. Other facilities include 200,000sq ft of convention facilities, a Jack Nicklaus signature golf course, a 100,000sq ft Las Vegas-style casino, 40 restaurants, bars and clubs, as well as an ESPA Spa.
Several issues have lead to the delayed opening of the resort. In April of this year Morgans Hotel Group, which had signed a 20-year management deal to operate a 300-bedroom Mondrian-branded hotel, terminated its agreement because Baha Mar failed to deliver a non-disturbance agreement that was part of its terms. This form of agreement, issued by lenders, assures an operator that it cannot be ejected from a project even if the project goes bankrupt, as long as the protected operator has executed its financial obligations.
A legal battle ensued when Baha Mar attempted to claim a US$10m (€7.7m, £6m) letter of credit provided by Morgans. The New York State Supreme court ruled in favour of Morgans, denying Baha Mar the right to collect the money. Both Morgans and Baha Mar declined to comment on the resolution of the case.
The SLS Lux will replace the no-longer-to-feature Mondrian hotel.
In July, roughly 60 Chinese workers from the primarily Chinese 4,000-person labour force imported by China State Construction Engineering to carry out the development marched on the Chinese Embassy in Nassau to protest working conditions and claimed they had not been paid in six months. On 8 August, Bahamas director of labour Robert Farquharson said the dispute had been resolved between the workers and China State Construction – which did not respond to requests for comment.
The delayed opening was announced in August, but Baha Mar executives declined to comment on reasons for the delay.
The resort will now miss the maximised cash flow of a winter high season in the Caribbean, even if it means that operationally the project may become more manageable – allowing for a soft opening when business is slower to get ready for the following high season.
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