The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Albany’s developers are partners in a joint venture bid to acquire the neighbouring South Ocean resort property, Tribune Business can reveal.

The involvement of the ultra luxury southern New Providence project, fresh from signing its updated Heads of Agreement for a $140 million expansion, adds a new - and potentially positive - twist in the race to determine South Ocean’s fate.

Asked by this newspaper whether Albany had submitted an offer for South Ocean, Christopher Anand, the development’s managing partner, told Tribune Business: “Yes, we have.

“We have submitted an offer. It’s a partnership with somebody.” He declined to comment further.

Tribune Business sources said the first round of bidding on South Ocean closed a week ago Friday, with the owners’ agents receiving several credible offers for the 373-acre property.

This newspaper’s contacts were divided, though, on the number of serious bids received, one putting it at three-four, and another at 11.

Apart from the Albany joint venture bid, Tribune Business sources said among the other offers likely to have come in was a bid from the principals behind the Nassau Palm resort’s $8-$12 million renovation and purchase. They are said to be connected to New York-headquartered developer, Argent Ventures.

And Tribune Business was also told that one bidder included among its group former US Ambassador to the Bahamas, Ned Siegel, although this could not be confirmed.

The former diplomat has yet to respond to numerous Tribune Business phone calls and e-mails, but he has a history of previous involvement with the South Ocean property.

Mr Siegel’s biography lists him as a “consultant to the principal” of the New South Ocean Development, likely meaning Roger Stein of RHS Ventures, who despite upgrading the property’s golf course into a ‘Blue Shark’ brand, saw the rest of his plans end in a bitter legal battle.

Southern Cross Developments, which is managing the bid process for the resort’s owners, the Canadian Commercial Workers Industry Pension Plan (CCWIPP), confirmed that the South Ocean race had been narrowed down “to a select handful of credible groups”.

The development company, owned by Australian professional golfer, Greg Norman, said the offers had come from groups in the Bahamas, US and Europe.

Announcing that the first bidding round had been completed, Southern Cross’s Jeremy Seabridge said: “We received almost 50 expressions of interest from various high quality local and international groups, and the overall response was very pleasing.

“The interested parties were given an outline of the general submittal conditions, and we concluded the first round of bidding last weekend. From the bids that were received, we have narrowed down the candidates to a select handful of credible groups that represent purchasers from the Bahamas, USA and Europe, and we are now in the vetting and final negotiation phase.”

Mr Seabridge said the process was “expected to be completed shortly, following which, we will be in a position to start working with the preferred bidder to complete the acquisition process”.

Tribune Business sources said CCWIPP’s Board and investment committee would meet in mid-March to consider the South Ocean bids, and make a decision on who to select as the preferred bidder.

Albany’s presence in the bid process, though, is likely to make it - and its partner(s) - the ‘preferred bidder’ where the Bahamian government is concerned. They may give South Ocean its first - and best chance - of succeeding since it was built in the late 1960s.

Not only do Albany and its developers have a strong track record of success, the development helped keep the Bahamas’ ‘head above water’ during the recent recession.

Albany has unquestionably had a positive economic and employment impact for the Bahamas, and its shareholders/investors have incredibly deep equity pockets. Apart from the Tavistock Group, the investment vehicle for Lyford Cay billionaire Joe Lewis, the other investors include world-famous golfers Ernie Els and Tiger Woods.

From almost every angle, Albany and its investors ‘tick each box’ in the Government’s investment ‘wish list’, and would likely be able to move much faster in developing South Ocean than any rival bidder.

The resort has been closed for a decade, having shut its doors in 2004, and a source said: “Since the beginning of time that property [South Ocean] has not worked. It’s an eye sore on the southwestern end of New Providence.

“The people to fix it [Albany] are here. The most important thing is that it does get fixed for the Bahamas, and they would be the logical purchaser of choice.”

The source suggested other bidders would be tied up in design and permitting for several years, and be reliant on still-few sources of debt financing, meaning their projects would take three-five years to materialise.

In contrast, the source suggested Albany, with its access to capital and existing presence, could move immediately.

“They could happen much faster than that,” the source said. “There’s less risk in what they’re looking to do, and they don’t need to hit a Grand Slam home run, which is the only option for others.”

Albany and its partner(s) are understood to have a “hybrid” development model in mind for South Ocean that is not necessarily reliant on securing New Providence’s third and final casino gaming licence.

While the Tavistock Group has gaming experience from the UK, it and its partners are thought likely to hold-off on any casino development at South Ocean until after Baha Mar’s opening, when they can better gauge whether the Bahamian market can support three casinos.

This, though, may open up an opportunity for others - notably Tennyson Wells’ proposed multi-million dollar investment project at Coral Harbour - which is reliant on getting that third casino gaming licence.

Albany’s existence also provides South Ocean with adjacent ‘critical mass’, something it can leverage off. It is also not surprising that Albany has taken an interest in what happens ‘next door’, as it will have a vested interest in ensuring any development matches its ambitions to create the “Monte Carlo or Monaco of the Caribbean”.

While bidding on South Ocean appears to be heating up, Tribune Business sources suggested activity at CCWIPP’s over Nassau-based resort, the British Colonial Hilton, had recently become cooler.

This newspaper understands that a $62 million offer for the property, which CCWIPP owns in a joint venture with boutique UK/Swiss investment house Adurion, fell through after its submitters, the developers of Toronto’s Bayside Park, were unable to obtain a casino gaming licence.

Getting such a licence for the British Colonial Hilton would always have been a remote possibility, and likely have attracted opposition from Atlantis and Baha Mar.

It is unclear where the British Colonial Hilton sales process goes from here, although previous bidders - notably Mr Stein (he of South Ocean fame) and his Och-Ziff real estate fund partners, and a London-based group are understood to be watching developments closely.