The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet Minister yesterday described renewed investor interest in acquiring the former $4.9 billion Ginn sur mer project as “a breath of fresh air”, confirming to Tribune Business that activity had “spiked” in the past three months.

Dr Michael Darville, minister of Grand Bahama, confirmed to this newspaper that a “variety” of investor groups had been assessing the West End project to see if an acquisition deal with its two separate owners was possible.

Acknowledging that any purchase was likely still some distance away, Dr Darville said, in response to Tribune Business inquiries, said: “You’re absolutely right. The interest has spiked in the last three months.

“There is renewed interest in West End, and as minister for Grand Bahama we’ve had a variety of investor groups expressing interest in it.

“Over the last three-four months, quite a few potential investors have seen that [Ginn] project in a different light, and have expressed interest in seeing if there’s a way forward with the owners. They have been on the island drumming up support, and things are starting to move.”

Dr Darville, though, said there were numerous “intricacies and fine details” that would have to be worked through to make any West End deal a reality.

Although he did not go into detail, Dr Darville is likely referring to the fact that any buyer would have to negotiate with two owners.

Much like Baha Mar’s Cable Beach acquisition, which involved purchasing hotels from the Government and Philip Ruffin, any buyer of the former Ginn property would have to achieve two simultaneous closings to ensure one vendor did not than hold the whip hand, and seek to leverage its advantage into a higher purchasing price.

What would have been the core project is owned by Lubert-Adler, the Philadelphia-based investment bank that was Ginn’s financing partner.

It holds 280 acres that were earmarked as the site for the hotels and casino, and 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.

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 $276 million loan.

It effectively inherited the real estate component of the Ginn project, and is looking to develop that in partnership with its own master planner, Replay Resorts.

Sources close to Canadian-based Replay recently told Tribune Business that little was happening with their portion of Ginn sur mer. They confirmed that Replay was assessing the potential purchase of Abaco’s Treasure Cay Resort from Ludweig Meister, but said no deal had been concluded.

Dr Darville, though, said the renewed investor interest in the former Ginn property, which has been the subject of multiple lawsuits from former lot buyers in the US, “really shows the light on Grand Bahama is becoming more favourable, particularly with that property”.

He added: “That’s good news for the Government, and as minister for Grand Bahama that’s a breath of fresh air because that project has so much potential.”

A further attraction for potential purchasers is that some $300 million worth of top-quality infrastructure has already been put in the ground at West End.

“The quality of the infrastructure that’s on the ground, and the planning behind it, is a great attraction for investors coming in from abroad,” Dr Darville said.

He was contacted after this newspaper was tipped that the existing owners were keeping him fully informed with what was happening at West End.

Tribune Business’s sources close to development confirmed that Lubert-Adler has been the one responsible for bringing in potential investors, some of whom have made multiple visits to West End, flying in up to three times to conduct due diligence.

This newspaper was told that six different groups have assessed Ginn sur mer in the past eight months, with three remaining interested at present.

“I believe that is a hot property right now. The owners are very buoyed by this renewed interest, and think they’re in a good place,” one source told Tribune Business, noting that Ginn sur mer might move once potential deals for Walker’s Cay in the Abacos and Chub Cay in the Berry Islands were completed.

Walker’s Cay is being pursued by an investment group from Destin, Florida, Tribune Business understands, while Texan energy billionaire, George H. Bishop, is moving on a Chub Cay closing.

“The Bahamas right now is in a very good place,” a source said. “Everyone’s realised we’ve turned the corner, and fear they’ve missed an opportunity, which is why there’s renewed interest. Americans are also trying to move money offshore.”

Another added of Ginn sur mer: “Three years ago they had people out there kicking the tyres, thinking they could buy this thing for $10 million.

“These people now are legitimate purchasers. They have the wherewithal, the know how and the expertise. They are resourceful.”

Tribune Business was told that all potential Ginn sur mer buyers were looking to acquire the whole property, and not just take the Lubert-Adler or Credit Suisse portions separately.

“These people have the proper capital, and are analysing the property, the Heads of Agreement and are doing due diligence on the property,” one source said of the investor groups.

“It’s like buying the car. These people are asking the right questions as if they’re serious.”