The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

and NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The principals behind the Nassau Palm hotel’s purchase have expanded their Bahamian resort acquisition ambitions beyond the British Colonial Hilton to now target the South Ocean Resort, Tribune Business can reveal.

Sources close to developments confirmed that the main players in the Sunset Equities group had now also turned their sights to the south-west New Providence property that has now been closed for almost a decade.

The move comes as a Cabinet Minister told Tribune Business that the list of contenders to acquire Downtown Nassau’s British Colonial Hilton had been narrowed to just one potential buyer.

Khaalis Rolle, minister of state for investments in the Office of the Prime Minister, told Tribune Business: “There were a number of groups who had expressed interest in the Hilton and were a part of the bidding process.

“Right now, I can’t say who the group is, but I think we are down to one potential purchaser right now.”

It is unclear whether that buyer is the group put together by the key investors in Sunset Equities, although some sources familiar with the situation suggested they had turned their attention to South Ocean after becoming frustrated over how the British Colonial Hilton process was playing out.

“They’re looking at both [hotels],” one source confirmed of Sunset Equities. “I think they’ve done a lot more work on the Hilton than South Ocean.”

Tribune Business was informed that Sunset Equities was effectively a ‘special purpose vehicle’ set up solely to acquire the Nassau Palm.

Explaining how the group eyeing both the British Colonial Hilton and South Ocean was structured, one source said: “It’s really a new group comprising the principals from Sunset Equities.”

Sunset Equities completed the purchase of the Nassau Palm on West Bay Street at end-May 2013, with plans to invest $8 million in its upgrade and transform it into a Marriott Courtyard brand.

One of its major players is thought to be Argent Ventures, a New York-based private real estate developer that owns the land under the city’s Grand Central Terminal. The company also owns the Capitol Records Tower in Hollywood, California, and Miami’s Omni International Mall.

Tribune Business was told that the British Colonial Hilton’s prospective purchaser met with Prime Minister Perry Christie’s senior policy adviser, Sir Baltron Bethel, last Thursday. This sparked further contacts between the Government and Canadian Commercial Workers Industry Pension Plan (CCWIPP), which is one of the British Colonial Hilton’s two owners.

Sources said the ‘new player’ in the British Colonial Hilton’s sale was the developer of Bayside Toronto, a 13-acre mixed use site on that city’s waterfront featuring residential, commercial, retail and cultural uses. This is part of a 2,000 acre waterfront revitalisation, and thus has parallels with plans to revise downtown Nassau and Bay Street.

Bayside’s main developer, research by Tribune Business has uncovered, is Hines, Hines a privately owned, international real estate firm with $24.3 billion in assets under management.

The company bills itself as having a presence in more than 100 cities and offices in 18 countries, with regional US offices in Atlanta, Chicago, Houston, London (European headquarters), New York and San Francisco.

Hines’ portfolio includes 1,273 properties, including skyscrapers, corporate headquarters, mixed-use centres, industrial parks, medical facilities, and master-planned resort and residential communities.

The new bidder’s emergence was also said to have sparked a higher offer for the British Colonial Hilton from the London-based group, Musketeer Ltd, which is headed by Irving Aronson, a South African who worked with Sir Sol Kerzner, Atlantis’s developer, when they were in their formative accounting days.

The British Colonial Hilton is jointly owned by the Canadian Commercial Workers Industry Pension Plan (CCWIPP), the pension provider for Canadian supermarket workers, and Adurion, the Swiss/UK boutique investment house and private equity player. CCWIPP is also the sole owner of South Ocean.

Adurion has Board control, and Tribune Business sources previously revealed both shareholders were keen to exit by going through with the sale at the right price.

“The pension fund is anxious to sell it, but if they don’t get it priced at a certain amount, they will end up with nothing,” one source said yesterday.

“They still have a lot of money in the deal, but are hoping for a quick resolution.”

Prime Minister Perry Christie last week confirmed that he was set to meet with potential purchasers of the 288-room British Colonial Hilton, which is very much the ‘anchor property’ for Bay Street and downtown Nassau. He said he was “encouraged” by negotiations for the sale.

Speaking at the Bahamas Chamber of Commerce and Employer’s Confederation’s (BCCEC) gala ball on Saturday night, Mr Christie expressed optimism over the country’s economy, stating that he was “encouraged” by the level of interest the country was attracting on the foreign direct investment (FDI) front. Mr Christie noted that “major acquisitions” were in play, stating that 2014 would be an “interesting year”.

Addressing private sector stakeholders, Mr Christie noted that the Government benefited from their continued involvement. “No matter how difficult the challenges are before us, no matter what you see as the manifestation of government policy, you always have an opportunity to sit, discuss and challenge. The act of government is based on the recognition that the only way we are going to succeed is to be able to have full participation from the business community,” said Mr Christie.

Alluding to the ongoing debate over tax reform and the implementation of a Value-Added Tax (VAT), Mr Christie said he had recently had “strong discussions” with the International Monetary Fund (IMF).

“When the Fund legitimises a particular policy intervention like a tax, it has a responsibility to stay with the country’s discussion of it, so that we are not distracted either by misinformation or hysterical interventions but that we, as Bahamians, have the full support of the IMF in arriving at an understanding as to whether it is right,” said Mr Christie.

Last week, Mr Christie hinted he might be open to pushing back the Value-Added Tax (VAT) target implementation date of July 1, 2014.