The Tribune

• US resort developer has project ‘under contract’

• Eyeing 28-storey ‘Alexandria Lighthouse’ tower

• Plans promoted at Fort Lauderdale Boat Show

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A new contender to acquire the former Ginn sur mer project is aiming to construct a 28-storey “iconic tower” modelled on Alexandria’s ancient lighthouse as its focal point if the deal proceeds.

Plans by Kingwood International Resorts and its principals, which have been seen by Tribune Business, call for the construction of a “a new wonder-of-the-world” in Grand Bahama’s West End should they complete the acquisition and secure the necessary government approvals and permits.

The tower, to be called The Lighthouse, will stand almost 400 feet high and feature “a five-star luxury hotel” with 102 rooms; 40 two-bedroom condominiums and penthouse suites on the top four floors, according to Kingwood documents.

Much, though, remains to be done before such a complex can be constructed. Tribune Business sources familiar with developments at West End, speaking on condition of anonymity, said that while Kingwood International Resorts has a signed sales agreement in place, and has paid the deposit customary in all real estate-based transactions, the purchase has yet to close.

They added that the developer, which owns two properties in Florida and another two in Georgia, is also working to put the necessary financing in place. And, while Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, did not respond to this newspaper’s calls and messages yesterday, it is understood the deal has yet to start the approvals process.

Some of this is confirmed in a letter sent out to condominium owners at the Old Bahama Bay resort, which would be involved in - and impacted by - a successful Kingwood International Resorts acquisition of the former Ginn project components held now held by Lubert Adler, the Philadelphia-based investment bank that was its financing partner and provided West End’s seed capital.

Confirming that Kingswood has Lubert Adler’s West End assets “under contract”, and is hoping to complete the purchase in “the first part of 2022” once its due diligence is satisfactorily completed, representatives of the condo owners referred to two meetings with the potential buyer and its executives.

“On June 17, members of the IVRC board met with representatives of Kingwood International Resorts and their principal, Farbod ‘Fred’ Zohouri, at Kingwood’s recently acquired Reunion Resort in the Orlando/Kissimmee area,” the update said.

“Kingwood and LRA-OBB (Lubert-Adler-Old Bahama Bay) advised that Kingwood had the Lubert Adler West End property under contract, and were in the process of their due diligence review of the site.

“Recall that LRA-OBB owns the common areas around the Old Bahama Bay condominiums, the pool, beach, marina, shops, restaurants undeveloped golf course, and much of the property previously owned by the Ginn company,” it continued.

“Kingwood has plans for a large casino, resort hotel, mega yacht marina, golf course and for-sale residential products on the Lubert Adler property. The name of their planned resort is Reunion Cay...... Due diligence review by Kingwood is still underway and their stated goal is to have a closing with Lubert Adler the first part of 2022.”

A link to Reunion Cay is posted on Kingwood International Resorts website. Tribune Business has also seen photographs, published in the newspaper today, of the Reunion Cay booth at the recent Fort Lauderdale International Boat Show that was used to promote the deal and the developer’s plans for West End.

IVRC stands for Island Ventures Resort and Club (IVRC), the entity formed by Old Bahama Bay’s 73 condo owners to keep the Grand Bahama resort open following Ginn’s 2011 default. It has been operating Old Bahama Bay’s marina, retail and restaurant facilities, and other amenities, under the terms of a June 2012 lease with Lubert Adler.

Providing further details on the June 17 meeting, the IVRC letter said: “They advised that the condos at Old Bahama Bay play a significant role in their plans, since they will need places for their team to stay during development and rooms for those looking at purchasing property at Reunion Cay.

“Further, Kingwood stated that they would like to assume management of IVRC and the Old Bahama Bay condos, and integrate them into their resort product since Old Bahama Bay could function as a more secluded opportunity for guests to enjoy while still having access to the Reunion Cay amenities.

“Kingwood did outline what we already know as owners; the condos and surrounding property need upgrading and refurbishing to make them more desirable,” IVRC continued, although it was cautious on Kingwood’s management proposal.

“The IVRC board representatives outlined that the co-operative effort has merit, but the details on how any upgrades/refurbishing, operations and longevity of the arrangement, among other issues, would need to be properly vetted to ensure that the condo owners are treated fairly and protected as development of Reunion Cay goes forward.”

Another meeting with Kingwood was held in October, this time involving just one IVRC director, John MacDonald, and the developer’s “Mr Carll”. The latter “presented the Reunion Cay website, the trade show booth for the upcoming Fort Lauderdale trade show, renderings and concept plans”.

“Mr Macdonald reported the meeting was very positive and upbeat, and hopes everything works out as planned as it will be good for all,” the newsletter concluded. Among the documents disclosed are renderings for The Lighthouse, Kingwood’s replica of the Lighthouse of Alexandria that was destroyed many centuries ago by a succession of earthquakes between 956 and 1323 AD.

Some observers might question whether such a 28-storey structure is appropriate for West End, and a country facing increasingly frequent and powerful hurricanes, but Kingwood documents said: “On Reunion Cay we have the opportunity to build a new wonder-of-the-world with the Lighthouse; an iconic tower that will be the focus and unique attraction of the development.

“Its image will resonate globally. The Lighthouse is the terminus of a grand axis at the heart of the resort, from the beach through the hotels of the resort core, the retail boulevard and out across the inner harbour. It sits on the harbour edge as the focal point to this grand, ambitious development.”

The Ginn sur mer project, and West End in general, have been at a standstill for more than a decade since the original developer, Bobby Ginn and his Ginn Clubs & Resorts, defaulted on their project financing in 2011 in the wake of the 2008-2009 recession.

Efforts to find a new developer have resulted in several misses. Skyline Investments, a Toronto-based real estate investor/developer listed on the Israeli stock exchange, with $500m in assets and a focus on hotel and resort development, broke cover to unveil its plans for the 2,012-acre property in the early years of the Minnis administration although no deal ever ultimately materialised.

Tribune Business sources previously suggested that resolving West End’s fate has the added complication of dealing with two vendors. What would have been the core project is owned by Lubert-Adler, which holds 280 acres that were earmarked as the site for the hotels and casino. Its landholdings also include key amenities such as the airport, marina and utilities.

Lubert-Adler also controls the Old Bahama Bay Resort, the golf course, the existing marina, commercial facilities such as the restaurants and retail, and associated operational facilities. It previously engaged Crave Group to masterplan its holdings and chart the way forward.

Kingwood acquired Ginn’s former Reunion property in Orlando from Lubert Adler, which has given the latter confidence it may be able to take West End off its hands, too.

But a Credit Suisse-led lending syndicate took possession of the remaining 1,476 acres at the former Ginn sur mer project after Ginn Development Company defaulted on its $276m loan.

It effectively inherited the real estate component of the Ginn project, and hired Replay Resorts to master plan that property. Lubert Adler and Credit Suisse have, though, worked together in the belief this is the best way to maximise their exit price - and potential recovery - by selling the former Ginn sur mer as one. It is unclear, though, if Kingwood will acquire both pieces.

Hundreds of millions of dollars were invested in developing West End’s infrastructure prior to Ginn’s collapse, so any purchaser will inherit a foundation on which to build. Tribune Business understood this amounted to $200m in infrastructure spend, but was told yesterday by a source familiar with the project that the actual spend was closer to $523m.

They added that the former Ginn project’s core, featuring amenities such as the casino and marina, has to be developed all at once rather than in phases - something that will cost at least $200m-plus.

And they suggested that “the money in that project” is to be made from the marina, which has the ability - at full build-out - to host up to 35 350-400 foot mega yachts at any one time.