The Tribune

By NEIL HARTNELL Tribune Business Editor THE Canadian-based developer for the former $4.9 billion Ginn project's real estate component yesterday said it would suffer "a very severe blow" if it did not get the next phase right, having shifted the development concept away from becoming another Atlantis or Baha Mar. Bill Green, Replay Resorts' chief operating officer, told Tribune Business that the company could not afford "to miss" with its initial plans, adding that its thinking was now more to emulate the Family Island-style of living epitomised by communities such as Green Turtle Cay and Hope Town. Emphasising that Replay Resorts was proceeding cautiously with modifications to the masterplan for the almost-1,500 acres it controls in Grand Bahama's West End, Mr Green said the developers were receiving 'mixed signals' as to what the international real estate market wanted. He explained that the market had shifted from one that, pre-recession, was dominated by 'investor buyers' largely interested in maximising investment value and 'flipping' lots for profit, to one where 'owner occupiers' were becoming increasingly dominant. And, apart from masterplanning, Mr Green said Replay wanted to stimulate vertical construction in its first phase West End development by partnering with contractors - especially Bahamian ones - to build model homes. This, together with favourable 'word-of-mouth' marketing from the 194 owners who purchased when the project was still known as Ginn sur mer, is seen as the best route to 'prime' the market. "We've definitely been proceeding carefully, if not slowly, because the market is not sending us obvious signals about what it wants," Mr Green told Tribune Business. "We're very cautious, because we think that if this next phase of development does not succeed, it will be a very severe blow to the development, so we want to make sure we don't miss. "The next phase is the new masterplan, based on what we think we should be doing, plus some vertical development...... We've studied all the major projects in the Bahamas, and really haven't seen one succeed on delivering on the promise of 200 lots a year. That's not where the market is. This is a long-term process." Noting that a Replay Resorts partner had told him that "the era of conspicuous consumption, if not dead, is smaller than it used to be", Mr Green added that visitors were "still interested in great experiences. "We now have buyers who are no longer investor-oriented; they are owner oriented. That's probably been driven by the availability of financing, not wanting to leverage up their property, and the difficulty in flipping," the Replay Resorts chief operating officer added. Describing the change in buyer nature as one that has involved a switch to 'earnest occupiers' or 'owner occupiers', Mr Green added: "They're not thinking about flipping; they're thinking about owning long-term. "That changes our philosophy in terms of size of home and design, and value, and the amenities we have there. We need a variety of experiences, but the spending patterns of owner occupiers are different from investors spending just weeks there." As a result of the market shift, Mr Green told Tribune Business: "We're in the process of modifying the master plan at Old Bahama Bay to reflect these realities, but are still focusing on what we think are the sustainable, competitive advantages at the place." These competitive advantages included West End, and the entire Bahamas', "connectivity to the water", and the project's close proximity to south Florida's boating community and high net worth individuals in locations such as West Palm Beach. Replay, through Ginn, had inherited "entitlements" to construct up to 5,000 units at West End. While such a number would never be built to cater solely to Florida's boating/yachting market, Mr Green said it represented a solid potential client base upon which to build. And water-borne transportation throughout the 1,500-acre community was another aspect Replay was assessing. "That could be quite magical," Mr Green added, explaining that homeowners would use boats to go to the golf course, restaurant and every amenity. Explaining the shift in development concept, the Replay Resorts executive told Tribune Business: "Ginn kind of built around a story. If someone before was trying to think of a concept or preconception based on Ginn sur mer, they would think of Baha Mar or Atlantis. "We're now thinking more of a Green Turtle Cay, Hope Town, New Plymouth, Harbour Island. That's some of the images that spring to mind......There's no one right idea, so we're trying to encourage 10 right ideas." To kick-start development, and build some excitement among existing and potential West End real estate purchasers that the project was getting back on track, Mr Green said Replay had "set-up" a line of financing to provide liquidity for home construction. "We have three builders who have expressed an interest in going ahead with the model homes," he added, saying these were both Bahamian and foreign. "Certainly, our preference would be to find someone local to join with us, partnering with us on building houses." While Replay had yet to directly market West End's real estate attractions to prospective investors, Mr Green said the company had canvassed the existing 194 lot owners via telephone and sent out a survey to them. "If we can get them speaking well about us, that with some home construction by builders, is the best thing to do as we develop the master plan," he added. Replay Resorts was hired by a Credit Suisse-led lending syndicate, which last year took possession of some 1,476 acres at the former Ginn sur mer project after the initial developer, Bobby Ginn's Ginn Development Company, defaulted on its $276 million loan. Replay and the Credit Suisse-led syndicate have effectively inherited the real estate component of the Ginn project. Ginn's former financing partner, Lubert Adler, and its own master planner, The Crave Group, have retained 280 acres on the northern side of the West End development, including the Old Bahama Bay Resort, the golf course, the existing marina, commercial facilities such as the restaurants and retail, and associated operational facilities. Asked about Replay's relationship with Lubert Adler and The Crave Group, given that West End's successful development will depend heavily on their ability to work together, Mr Green replied: "At the moment, we're proceeding on an individual path. "We have had many meetings and conversations with them, and wish them well. We need everyone to succeed here, but it's difficult to ascertain their plans and timing. A successful formula is one that enables us to proceed on our own." Replay has not inherited an empty coffer. Some $124 million worth of infrastructure has already been put in for the 830 serviced lots it inherited from Ginn, some 194 of which have been sold. It therefore has more than 630 lots available for direct marketing to buyers, if it so wishes. Mr Green said Replay had hired a West End resident, Jerrath Rolle, as asset manager to oversee its portion of West End. Through him, a full-time security team, as well as landscape and maintenance personnel, had been hired, with an estimated 20-30 persons now on the ground. Unable to place an investment value on the Replay project, given that it could involve anywhere from a 10-30 year build-out, Mr Green told Tribune Business: "There's an element of launch and learn. "We like to go into markets where we've done the bulk of the work and strategies, but here we're going to be paying close attention to what the market is telling us, because inevitably there's going to be some lessons learned."