Izmirlian May Be Out
After weeks of unfruitful negotiations between government-appointed liquidators, the Chinese bank financing it and the Chinese construction company building it, it appears Greek billionaire Sarkis Izmirlian may have seen the end of his Bahamian dream, the $3.5 billion Baha Mar Resort on Cable Beach.
With negotiations stalled between Izmirlian and other principals of the project—namely, the financier, state-owned Export-Import Bank of China (Exim) and state-owed contractor China State Construction Engineering—to restart construction on the unfinished project, Bahamian Prime Minister Perry Christie last week revealed talks with potential new operators for the resort—which include hotel and casino magnate Sol Kerzner. Also rumored to be involved in the talks is Genting, the Malaysian company that operates a casino on the Bahamian island of Bimini.
Christie confirmed a report by the Bahamas Tribune that a private real estate merchant bank led by Andrew Farkas with Kerzner as a partner, had been in discussions with Exim and the construction company to take Baha Mar over after liquidation procedures are complete. Speaking to the newspaper, Christie said Kerzner was one of a number of leading resort companies expressing interest in the Baha Mar project. Kerzner’s company at that time, Sun International, was the developer of the Bahamas’ other integrated resort, the Atlantis on Paradise Island.
Speaking at the opening ceremonies of a conference of chartered accountants, Christie said his government has been involved in negotiations with operators, Exim and the construction company with the main goal of getting the stalled project up and running, and particularly, putting more than 2,000 laid off Bahamian employees back to work.
“I had an hour conference discussion with the president of the Export Import Bank of China about the need to accelerate the decision-making on finishing over here,” Christie told the group, according to the Tribune. “There is a compelling urgency for me to have a conference this morning with the construction company to speak to them about the difficulties the two are trying to work out, but to let them know that we want all the Bahamian contractors to be paid hopefully dollar for dollar. We want them to resume construction in the shortest possible time.
“I leave you with a great degree of optimism, because some of the world’s leading resort entities have expressed continuing interest. One of the leaders in the Western Hemisphere arrives in the Bahamas today to speak with representatives of the bank, all with a view to putting their interest on the table of being able to manage or purchase interest out here. So we are optimistic.”
Christie also said that Exim has agreed to provide interim funding if needed to get the project restarted with a new owner. “They have given me the assurance that in the shortest possible time from now, they will provide that interim funding,” he said. “So things are good, so to speak.”
Izmirlian, after pledging more of his own money on condition it be traded for senior ranking among creditors, had been trying to maintain his hold on the project he and his family started—putting up a third of the total project cost—and saw through until construction was more than 90 percent complete.
Baha Mar was the largest construction project ever in the Bahamas. Izmirlian’s vision was a resort spanning the legendary Cable Beach with six hotels, the largest casino in the Caribbean, a golf course and a full range of amenities. The project stalled after construction delays caused projected grand openings slated for last winter and spring to be cancelled.
With the project nearly complete, Izmirlian, frustrated by the delays, stopped paying the contractor, blaming CCA for low-quality work and for missing deadlines. CCA halted construction and accused Baha Mar Ltd. of simply trying to avoid paying its bills. In June, Baha Mar filed for U.S. Chapter 11 bankruptcy protection, which the Bahamian government refused to recognize, initiating the liquidation proceedings in an attempt to seize control of the project, complete construction and open the resort under a new manager.
The completed resort is projected to offer an estimated 5,000 jobs and an annual payroll of more than $130 million—or 12 percent of the country’s GDP.
