Spurned Baha Mar founder Sarkis Izmirlian is hoping the Bahamas’ new government will agree that the previous government made a disastrous, and possibly illegal, deal in brokering the sale of the super-resort to Hong Kong conglomerate Chow Tai Fook and will move to halt it.
Izmirlian’s latest bid to regain control of the multibillion-dollar project, which held a partial opening in April, finds the developer accusing the administration of former Prime Minister Perry Christie of “self-dealing” and “state-sponsored discrimination” in backing a sale rife with “unusual, one-sided concessions” granted to the detriment of the people of the Caribbean island nation.
“The agreement also clearly raises the concern about the potential of corruption by members of the previous government,” he said in a statement issued through his development company, BMD Holdings, in which he reiterated his oft-stated desire to repurchase the resort, complete construction and operate it with a full Bahamian workforce.
Izmirlian conceived Baha Mar as a 4,000-room category-killer, pegged at US$4 billion at full build-out, with an ideal beachfront location and all the luxury bells and whistles, including the largest casino in the Caribbean. Backed by Export-Import Bank of China and a division of China State Construction, the project was hailed as a panacea for Bahamas’ struggling tourism-dependent economy that would provide thousands of badly needed jobs.
Then it all began to unravel. The project ran into financial difficulties. Izmirlian fell out with his Chinese investors over cost-overruns and other disputes, and in June 2015, six months before Baha Mar’s scheduled opening, BMD filed for protection in U.S. Bankruptcy Court, claiming debts of $2.7 billion.
He also fell out with the government, which opposed the U.S. filing as a violation of sovereignty. Instead, the unfinished resort was placed in liquidation under the auspices of the Supreme Court of the Bahamas and eventually turned over to EXIM and China State Construction, forcing Izmirlian out. His attempts to regain control were rebuffed by the government in favor of a trusteeship overseen by EXIM and China State Construction to negotiate a sale.
At that point, with construction halted and thousands of jobs at stake, Baha Mar had become a massive political liability for Christie.
Enter Chow Tai Fook, which has been diversifying into gaming with sizable investments in Australia, Vietnam and other choice markets. Last fall, they emerged as the government’s buyer of choice. Baha Mar’s long-awaited opening came off on April 21 with the debut of the casino, a golf course, a spa, several restaurants and bars and the first of three planned hotels, an 800-room Grand Hyatt.
All seemed settled, but then two weeks later, Christie’s Progressive Liberal Party lost the election, and the new government of Free National Movement Party leader Hubert Minnis, in fulfillment of a campaign promise, got authorization from the Supreme Court to release a partial list of the terms of the sale, plunging the troubled resort into controversy anew over who made out in the deal and how.
“There is no question that Baha Mar should be completed successfully and fully opened as soon as possible,” BMD said in its statement. “But that Baha Mar should be, as originally conceived, a key economic spark plug for the Bahamas. The Bahamian public should be convinced and be confident that the owner of Baha Mar is there for the Bahamas, committed to creating jobs for all Bahamians and enhancing the Bahamian way of life.”
So far, though, the Minnis government isn’t convinced, especially given “the importance of the project to the economy and people of the Bahamas,” as Attorney General Carl Bethel recently put it.
“Even though we may disapprove of the way certain legal and other matters were handled in respect of the Baha Mar matter,” he said, “as a responsible government, we will do everything to facilitate the completion, sale, and opening of the resort, so that the full measure of its potential economic benefits can be realized for the Bahamian people.”
