The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A controversial 12-storey Paradise Island condominium development has been placed into receivership by CIBC FirstCaribbean International Bank (Bahamas), Tribune Business can reveal, having sold just 25 per cent of the available units.

Simon Townend, a Bahamas-based KPMG partner and head of its corporate finance arm for the Caribbean, yesterday confirmed that he and colleague Nicholas Brearton had been appointed as receivers/managers for the multi-million dollar, 79-unit Ocean Place on the Harbour development.

They have also taken over an-almost 15 acre tract near Skyline Lakes on western New Providence, which was earmarked for development as a retail complex and residential properties.

Both Ocean Place and the Skyline Lakes property are owned by Peace Holdings, which is controlled by Al Ballard. Only specific assets have been placed into the hands of the KPMG receivers, not Peace Holdings itself.

Responding to Tribune Business’s inquiries, Mr Townend told Tribune Business: “I can confirm we were appointed receivers and managers over certain assets on November 20, assets related to property.

“Right now, we’re making our initial findings and can’t talk much further until we’ve had a chance to assess the situation.”

Confirming that the assets included both Ocean Place, especially the 59 condominiums still unsold, and the western New Providence land, Mr Townend said KPMG were receivers and managers for the former, and just receivers for the latter.

“There’s 79 units all told,” he told Tribune Business of Ocean Place. “Twenty have been sold and completed.

“The structure is complete. There’s some units which aren’t completed inside.”

Tribune Business attempted to contact Mr Ballard for comment, after Mr Townend confirmed that he was both a director and shareholder of Peace Holdings.

However, the number this newspaper obtained for Mr Ballard rang permanently engaged all day. Tribune Business also left a voicemail message on the US cell phone of Ocean Place’s marketing director, Marcus Fletcher, but the call was not returned.

However, e-mails sent by Mr Fletcher to Bahamian realtors two-three months ago, which have been obtained by Tribune Business, indicate the developers were having difficulty selling the condominiums - and were forced into discounts of up to 40 per cent.

The documents also suggest many realtors felt Ocean Place’s price points, of between $750,000-$5 million, were too high given current market conditions, and that they were dissatisfied with the commissions being offered to them.

In one e-mail, Mr Fletcher wrote: “In June, we reduced the prices of eight residences down more than 40 per cent.

“These homes were dispersed throughout the building, representing a great cross section of floor plans, views and prices. The response was strong, and included many of you bringing clients to view our community. Deals were made.

“Ocean Place is Paradise Island’s newest (and tallest) luxury residential condominiums. With two-bedroom to five-bedroom and Penthouse Residences priced from $750,000 to $5 million, there is something for just about any discerning buyer. [Marina] slips are still available.”

In another, Mr Fletcher confirmed that Ocean Place had increased the commission it was offering to pay realtors from the market standard 6 per cent to 7 per cent on all deals.

He wrote: “When we met agents in the Spring, two topics came up again and again: Prices and Commission. In an attempt to stimulate activity and gain market traction, we affected both.

“Time is of the essence. We will honour the reduced prices on any deal that is in the process of negotiations by the end [promotion] date. Just give me a call, and I will work with you on this.”

Ocean Place was the subject of much controversy some four years ago at the height of its construction. Lawsuits seeking injunctions to block its further development were filed by neighbours, who claimed building materials were falling from it on to their properties.

There were also allegations that the developers ignored agreed setback and ‘non-obstruction’ lines, and built Ocean Place much higher than agreed in the 2004 purchase of the property.

Many observers also questioned how Ocean Place was able to obtain all the necessary approvals from the Ministry of Works, Department of Physical Planning and Building Control Department, when its size dwarfs all neighbouring properties and seems ‘out of kilter’ with the rest of Paradise Island’s real estate development.

It appears likely that CIBC FirstCaribbean International Bank (Bahamas) brought in the receivers using the security it held over Peace Holdings’ real estate assets.

One observer of developments said: “I heard it was going to happen. Everybody was pushing.”