Sarkis Izmirlian is irate over what he sees as a conspiracy to prevent him from regaining control of Baha Mar, the US billion Bahamas megaresort he started but couldn’t complete.
Instead, the 2,200-room complex, which languishes unfinished on a stretch of Nassau’s Cable Beach, has been transferred out of receivership to an affiliate of its Chinese financiers, a move the outspoken Izmirlian blasts as an “intricate fabrication.”
Baha Mar broke ground in February 2011 with plans to open in 2014. But Izmirlian, its founder, fell out with the resort’s principal contractor, China Construction America Bahamas, a division of China State Construction, over costs and construction delays, prompting lenders led by Export-Import Bank of China (CEXIM) to pull their support. Construction halted, and some 2,000 prospective Bahamian employees were laid off.
When the funding disappeared Izmirlian tried to place the development under the protection of U.S. bankruptcy law. But the government of Prime Minister Perry Christie opposed the move. Baha Mar went into receivership in the Bahamas instead, and Izmirlian was forced out.
The government now says it has secured an agreement with CEXIM to finish construction and sell the resort to a “world-class hotel and casino operator.” Izmirlian believes he fits the bill. Earlier this month, Bahamas daily The Tribune reported that he wrote CEXIM President Liu Liang offering to buy back Baha Mar through an entity called BMD Holdings. The letter guaranteed that BMD would beat any other offer and would cover all substantiated Bahamian claims and compensate citizens of the Caribbean island nation who lost money or jobs with the failed development, a very politically sensitive issue for the government.
However, Izmirlian says that no one?not CEXIM, not the receiver, not the government?has responded to him.
“If our offers had been considered, it is very likely that Baha Mar would be open today, employing thousands of Bahamians,” he said.
Instead, the government announced just days after BMD’s letter went public that CEXIM had transferred Baha Mar’s assets to a subsidiary called Perfect Luck Holdings in preparation for an eventual sale.
Izmirlian then went public himself, criticizing the transfer as a “smoke and mirrors transaction, which will allow the China Export-Import Bank to retain control of Baha Mar’s assets while ‘hiding’ any future sale?and associated losses?off its balance sheet”.
“It is indeed ‘extraordinary’ that the entire sale to ‘Perfect Luck’ has been an intricate fabrication,” he said.
“The fact that the receivers were not able to find an arm’s length buyer has nothing to do with the quality of the asset,” he said, “and everything to do with a process where bidders were not given information, and were forbidden to meet with stakeholders or to discuss the status of construction with any of the relevant parties.”
Christie, whose relationship with Izmirlian has been anything but warm, disputes the developer’s allegations.
“At each stage of the process Mr. Izmirlian has had the opportunity to participate in discussions and the process surrounding the future of the resort,” the prime minister’s office said in a statement. “If, as he states, Mr. Izmirlian is in a position to, and wishes to work with CEXIM to deliver Baha Mar for the Bahamian people, then he should engage seriously with Perfect Luck and its advisors. If he is in a position to make a credible proposal to acquire Baha Mar from Perfect Luck, then he is free to do so.”
Perfect Luck, Christie said, “may sell the resort to whomever it wishes, subject to the proposed purchaser being acceptable to the government and other bodies performing their public function”.
The government reported earlier this year that negotiations were under way with a buyer, believed to be Chinese, but refused to disclose its identity. It is not clear if this meant Perfect Luck.
More recently, Christie’s office has said it believes Baha Mar could be completed by the end of the winter season, putting an opening sometime around March 2017.
