The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The developers behind a $6 billion resort project are “a little bit closer” to kickstarting formal government analysis of their proposal , with confirmation of the necessary financing still awaited by the Christie administration.

Confirming that the Government had met with the principals behind the Blackwood Pointe Resort & Spa development earlier this week, Khaalis Rolle, minister of state for investments, told Tribune Business that the China Development Bank had been brought into the project mix.

Speaking to this newspaper yesterday, Mr Rolle said: “We had a meeting where they presented their proposal and presented their partners. It’s now just for them to confirm their financing is in place.

“We can’t evaluate the project until we have all of the conditions met, which is having a complete proposal identifying the partners and identifying the money.”

Tribune Business was yesterday told that the Blackwood Pointe project, whose principal developer is Kylin International, headed by Lawrence McDonough, had obtained an ‘approval in principle’ from the Christie administration at this week’s meeting.

But Mr Rolle, who attended the meeting, refuted this, telling Tribune Business: “We haven’t gotten to that stage.”

Kylin and its partners, who are said to include Fairmont Hotels, owner of New York’s The Plaza property, and hospitality firm Cipriani, are proposing to construct seven hotels and 2,700 rooms on a ‘greenfield’ site in eastern Grand Bahama.

Other amenities confirmed previously by the project’s spokesman, former FNM MP and Cabinet Minster, Kenneth Russell include a cruise ship port, marinas, multiple tourist attractions, sporting facilities, a liquefied natural gas (LNG) power plant, water and sewerage plants, and manufacturing facilities.

“They’re proposing a full-scale development of the area,” Mr Rolle confirmed to Tribune Business yesterday. “But we haven’t sat down and completed all the details as yet with them.”

Describing the Kylin proposal as “the largest project ever” in the Caribbean, the Minister added: “Once we get to that stage, when they’ve completed their partners, completed their financing, we’ll begin to take it through the formal evaluation process.

“They’re moving a little bit closer to formal evaluation. There’s a process we have to go through.”

While disclosing that the planned level of investment in Grand Bahama’s East End had been scaled back, from an initial $7.5 billion to a current sum just over $6 billion, Mr Russell previously said the developers were projecting that every permanent job at Blackwood would create another three in the wider economy.

Based on Mr Russell’s estimates that Blackwood Pointe will create between 6,000-10,000 full-time jobs, it thus appears the developers are forecasting that the spin-off impact will generate another 18,000-30,000 employment opportunities.

“It will have a tremendous impact,” Mr Russell told Tribune Business of Kylin’s plans. “Grand Bahama will be fully employed, along with lots of other islands, who will also see full employment.

“Upon completion we’re looking at 6,000-10,000 full-time jobs. For every job we create, there will be another three jobs in the community.”

Tribune Business previously reported how both the former Ingraham administration and Hutchison Whampoa, Grand Bahama Development Company’s (Devco) managing partner, were extremely sceptical that Kylin could raise the necessary project financing when it looked at developing the Sharp Rock site within the Port area.

The company, which is headed by Lawrence McDonough and his Chinese-born wife, some of whose family hold senior positions within the Beijing government, was initially scheduled to hold a pivotal meeting with Mr Christie and his key officials this summer.

Among the key issues for discussion was for Kylin to provide proof of financing, and no more was heard of the planned meeting with the Government until Mr Russell announced a September 10 date that was switched to earlier this week.

Tribune Business previously revealed that Kylin initially targeted a $1 billion development in the Sharp Rock area of Freeport before focusing on eastern Grand Bahama.

The Sharp Rock development, as originally conceived, was contingent on acquiring 2,000 acres, at a purchase price of $100 million, from a combination of Devco and Port Group Ltd, the latter being the GBPA’s sister company and affiliate.

A copy of the original 2010 Kylin submission to the Government, which has been obtained by Tribune Business, talked of constructing five luxury hotels, a cruise ship port, Blue Flag Marina, and gaming, retail and restaurant facilities.

“Kylin will invest more than $1 billion in the physical development of the resort,” the submission said. “It is anticipated that the resort will employ over 5,000 staff.

“Kylin has negotiated a construction loan commitment in the amount of $1.5 billion from Beijing Construction-Engineering Group. While an agreement in principal has been reached, the loan commitment is contingent upon the approvals of the Port Authority and Government of the Bahamas.”

Tribune Business sources previously confirmed that when Hutchison attempted to do due diligence on Mr McDonough, several details – including an address given for an office on the outskirts of Shanghai – did not check out.

This, though, has been disputed by other Tribune Business sources, who have informed this newspaper that all the details and promises given by Mr McDonough to-date – including the office address – have been confirmed and fulfilled.