The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government yesterday said it had “waited long enough” for the owner of New Providence’s still-closed South Ocean resort to find a buyer, amid reports that negotiations with the preferred purchaser had broken down.

Tribune Business sources close to developments said the Canadian Commercial Workers Industry Pension Plan (CCWIPP) was “back to square one” in its buyer search, after it was unable to reach agreement with Austrian financier, Dr Mirko Kovats.

Khaalis Rolle, minister of state for investments, confirmed to this newspaper that CCWIPP had selected Dr Kovats as its preferred buyer, but no update had subsequently been provided to the Government on the progress of their negotiations.

Mr Rolle said the Christie administration would now seek such a report, adding that it had “been long enough” without a status report on South Ocean’s future.

The 383-acre southwestern New Providence property has been closed for more than a decade, and the Government is keen on finding a buyer who can fulfill the original vision for South Ocean.

The Christie administration sees it as the ‘missing piece in the jigsaw’ that will complete mega resort development on New Providence, particularly since the island’s third - and final- casino licence is attached to it.

However, the Canadian pension plan’s efforts to sell South Ocean appear to have hit yet another snag, and Mr Rolle’s comments indicate what other sources have told Tribune Business - that the Government is becoming increasingly frustrated at the pace of the process.

“The Canadians gave up on Kovats. It’s back to square one,” a source familiar with the South Ocean situation told this newspaper.

“The Government is becoming increasingly wary and suspicious of the stalling of this, as it was pretty well known that Kovats would not get the licence and approvals from the Government.”

The source added that, in selecting Dr Kovats, a Bahamas resident with a home at Lyford Cay, as the buyer, CCWIPP had effectively rejected two major institutional buyers with a strong track record of success in major real estate developments.

They are Argent Ventures, a private New York-based real estate developer, some of whose principals were involved in the $8-$12 million purchase and renovation of West Bay Street’s Nassau Palm property.

Argent has considerable means, owning the land under New York’s Grand Central Terminal. The company also owns the Capitol Records Tower in Hollywood, California, and Miami’s Omni International Mall.

The second is the joint venture between the Albany developers and Och-Ziff, the hedge fund and asset manager with over $40 billion in worldwide assets.

It is understood that Och-Ziff would have provided the financing, while Albany’s developers will offer management, operational and development expertise.

One Tribune Business contact said both Argent and Albany/Och-Ziff had lost interest in South Ocean due to the time that had been lost by CCWIPP selecting Dr Kovats, and the subsequent talks that went nowhere.

Argent’s posture is understood to be that CCWIPP ‘must come to it’, a position that it will likely use to reduce the purchase price and secure better terms should the Canadian pension fund be forced to do that.

Another source, while unaware that talks between CCWIPP and Dr Kovats had failed to produce a deal, added: “That’s not surprising.” Dr Kovats himself could not be contacted for comment.

Mr Rolle, meanwhile, told Tribune Business that the Government had received no communication from CCWIPP since it had informed it that Dr Kovats was the preferred bidder.

“They haven’t advised us of any new developments subsequent to the first meeting we had, when they said they’d identified a potential purchaser,” the Minister said.

“We’ve not gotten anything back since from them, informing us of any change. We knew that the potential buyer and seller were locked in negotiations.”

Mr Rolle then added: “We’re going to ask them [CCWIPP] to provide us with an update in short order. It’s been long enough.”

This highlights both the Government’s frustration and desire to make something happen at South Ocean, a development that could create hundreds of construction and full-time jobs if done right.

Tribune Business was also told by informed sources that the Government was again considering “lowering the boom” on the pension fund, and threatening to strip South Ocean of its casino licence and various development rights in a bid to force a sale.

Mr Rolle did not confirm this, but said it was “a known fact” that the Government would grant New Providence’s third casino licence to the first viable, fully-funded project to come along - whether at South Ocean or elsewhere on the island.

“We are anxious to move forward, and have made a commitment that the first group with a viable proposal that is properly financed, we will grant them a casino licence,” Mr Rolle told Tribune Business, “whoever that is going to be, a South Ocean group or another group that has the capability to execute the project.

“We can’t allow that casino licence to exist in perpetuity.”

That will delight Tennyson Wells, whose multi-million dollar resort/theme park proposal at Coral Harbour is dependent on obtaining the casino licence currently vested in South Ocean.