Perry Christie, Prime Minister of The Bahamas, pictured with Denise Abrahamsen, representative of the Baha Mar former employees. Photo: Shawn Hanna/Tribune Staff
By LAMECH JOHNSON
Tribune Staff Reporter
ljohnson@tribunemedia.net
CONSTRUCTION at the stalled Baha Mar resort is expected to resume in September in a move to have the $3.5 billion resort project open no later than the end of winter in 2017, Prime Minister Perry Christie announced last night (Prime Minister's statement in full HERE).
While remaining tight-lipped on which “world-class hotel and casino operator” would purchase the Cable Beach development and the concessions granted in exchange for arriving at a deal, Mr Christie confirmed speculation during a nationally televised address that an agreement had been reached between the government and the Export-Import (EXIM) Bank of China.
Under the terms of the agreement, Bahamian contractors still owed money will receive a significant portion, if not all, of their claims, while thousands of former Baha Mar employees will receive outstanding amounts due to them.
Mr Christie said the deal had been had been approved by Justice Ian Winder of the Supreme Court just two hours prior, around 5pm.
He even likened the efforts to conclude the deal to Shaunae Miller’s dramatic dive in the women’s 400m race at the Rio Olympic Games to win the gold medal for the Bahamas.
“This agreement represents a signal achievement for the Bahamas and a milestone in the troubled history of Baha Mar,” Mr Christie said from the Cabinet room, flanked by members of his government and others.
“For some 20 months, I have been continuously focused, day and night, on efforts to find a solution for the completion of the Baha Mar project. Throughout this period, the government has had three key objectives: firstly to ensure that construction at Baha Mar would be resumed as quickly as possible.
“Secondly, to make every effort to ensure that the casino and casino hotel, the convention centre and its hotel, and the golf course would open before the end of the 2016-2017 winter season and thirdly to ensure that payment of claims to Bahamian creditors and contractors, who previously had little or no prospect of recovering anything from Baha Mar.
Baha mar’s troubled timetable
November 2005 - Baha Mar officially announced by Sarkis Izmirlian in partnership with Harrah’s and Starwood Hotels & Resorts Worldwide. Groundbreaking set for 2007 and opening 2010.
March 2008 - Harrah’s pulls out of the resort development.
March 2009 - Baha Mar signs formal agreement with China State Construction Engineering Corporation with China Construction America (CCA) as builders.
February 2011 - Construction crews break ground, work funded by China Export Import Bank $2.45bn loan.
July 2014 - Baha Mar officials confirm opening date will not be met.
December 2014 - Baha Mar misses scheduled opening.
March 2015 - Suggested ‘soft’ opening date missed.
May 2015 - Another opening date missed, no further dates announced.
June 2015 - Developer Sarkis Izmirlian files for Chapter 11 bankruptcy in the United States.
July 2015 - Government moves to seize and liquidate Baha Mar, Supreme Court refuses to recognise US court bankruptcy proceedings.
August 2015 - Baha Mar files Chapter 11 reorganisation plan removing CCA from the project.
September 2015 - Joint provisional liquidators appointed by Supreme Court
October 2015 - More than 2,000 employees laid off, receivers appointed
April 2016 - Prime Minister Perry Christie holds bilateral meetings with high ranking Chinese officials.
August 2016 - Prime Minister announces re-mobilisation of the resort, work to start in September.
“We have achieved all of these objectives,” Mr Christie stressed.
He said that under the heads of terms signed between the government and the EXIM Bank, “remobilisation at Baha Mar will commence immediately.”
“Construction at the site is expected to resume within a few weeks, during the month of September,” he added. “The bank has committed to fund all remaining construction costs to complete the project. China Construction (America) will finish the works, and will resolve outstanding claims with its suppliers and sub-contractors.”
The opening of the 2,000 plus room resort was scheduled for December 2014, but was delayed to March 2015 and again to May 2015.
Baha Mar’s developer Sarkis Izmirlian filed for bankruptcy protection in the United States on June 29, 2015; however the Supreme Court rejected the resort’s application for the matter to be recognised here.
A US judge later threw out the bankruptcy application for Baha Mar’s Bahamian companies.
Joint provisional liquidators (JPLs) were appointed in September 2015 to protect and prevent the depletion of the resort’s assets before an expected full winding-up of the resort took place.
However, the resort was placed into receivership last October.
In May, court appointed receiver Raymond Winder told reporters after a closed hearing that there was a “good expectation” the shuttered resort would be sold before the matter returned to court at the end of September.
Mr Christie contended that going the route of Chapter 11 proceedings in Delaware would have left Bahamian contractors with the prospects of being paid little to nothing.
“Under this agreement made today, funds will be made available to enable them to receive a significant part and possibly all of the value of their claims,” Mr Christie said.
In addition to re-engaging prior contracted companies, the deal will see that the government agencies and utility companies like Bahamas Power and Light “receive payment for some of their outstanding claims against the Baha Mar companies.”
As for the more than 2,000 employees dismissed last October, the prime minister said they can expect to receive “unpaid salaries, severance pay, accrued vacation pay, and notice payments due to termination.”
They can also expect to be repaid sums deducted from their salaries and pension contributions.
Commercial groups and retail companies will be “permitted” to hold onto their leases and concessions, according to Mr Christie.
“As it has been done with all major investments, the government will extend appropriate concessions to facilitate the construction and promote the successful future operation of the resort. The completed project will then be sold to a qualified world-class operator,” the prime minister stressed.
Mr Christie also used the press conference to dismiss critics on the transparency of the negotiations, noting “the government thought it wise not to offer a running commentary on the discussions (and) not to say anything that might put the future of the project in jeopardy.”
Hailing the “Herculean effort” by the many parties involved in the negotiation, Mr Christie said he was “enormously grateful to and proud of everyone, who in these last days, did what it took, to use the same, dive across the finish line.”
Mr Christie and his Cabinet colleagues did not take questions from the media for further details on a prospective Baha Mar buyer, possible concessions granted to the EXIM Bank, and what the new deal means for the developer’s $800 million equity stake.
However, he said the public can expect the government to “make publicly available all of the key items of information so that you can read for yourselves what the facts are.”
“The difficulties of a project this size has hit our economy hard,” Mr Christie said. “But we will recover. Over the coming months, economic opportunities will be felt in more and more homes. The government will redouble its efforts to continue the programme of modernisations that we began four years ago.”
“This is a good day for the Bahamas. This is a great day for Bahamians,” Mr Christie concluded.
Thankful
Interested stakeholders in the Baha Mar matter were present at the press conference to express their feelings on the deal.
Denise Abrahamsen, representative of former Baha Mar employees, said she was “truly thankful” for the prime minister’s commitment to seeing the project’s completion.
“Your team has been so professional and so welcoming and the agencies that were there to assist us, the National Insurance Board, and the Social Services Department, a team of professional people who’ve extended themselves above and beyond to assist the team here. I thank you, sir, I thank you for your dedication.”
Godfrey Forbes, immediate past-president of the Bahamian Contractors Association, said the news marked “a good day indeed for the Bahamas especially for contractors.”
He added: “When we heard about Baha Mar, I know our former prime minister he got a lot of flack about ‘you need to go ahead and make this project happen, it has to go because the economy needs this project’, then it got to the point whereby we got into a major roadblock and everybody was like ‘wow what happened here?’
“Now you come on the scene and you did some magic. I don’t know what kind of shuffling you were doing but it worked and I must say on behalf of our president, and our members, we are indeed thankful because we know that in the construction industry, it is the one single industry whereby we know that people, or our workers, are considered the most hard-working workers anywhere.”
Peter Whitehead, owner of Auspec Construction and Gunite Pools, commended contractors for keeping calm during the debacle and thanked the prime minister for coming through.
“I think that all of us realise and understand that negotiating this contract, what you have negotiated, probably is almost impossible to negotiate,” Mr Whitehead said.
“And it’s been done. So if you took the statistics on it, it’s impossible to do it but it was done and there’s always that saying that when you’re across the table, and the person who blinks first is screwed and in this case, you didn’t blink. And we are so grateful that you didn’t blink.”
In early April, Mr Izmirlian asked the president of the EXIM Bank to accept his offer to complete and open the stalled resort, promising to rehire Bahamian employees while ensuring that the bank will not have to take a discount on its debt. In other words it would recover its debt in full.
Mr Izmirlian’s offer would also ensure that unsecured creditors, many who are “suffering in the Bahamas,” would be paid, he wrote.
The letter was a follow-up to the offer he made to the bank on January 11, to which he said he received no response.
Comments
alfalfa 8 years, 4 months ago
I love the thought process of this announcement. The Government had nothing to do with the problems resulting in the stopping of the project, nor did it interfere with and of the "liquidation process" but they take full credit for putting together this "fantastic deal" in which the Chinese will own everything. There is no way that this hotel can ever be profitable, and service a 3 plus billion dollar debt, so in the end the lender will own the property, which was their goal in the first place.
John 8 years, 4 months ago
Ironic that the prime minister will compare the signing of an agreement to restart and complete construction at Bah Mar to Shaunae Miller's dive across the finish line to claim first place and a gold medal. When Shaunae took the dive and slid across the finish line, she knew that it was the last and final move she had and, regardless of the outcome, her race was finished and her position in the line up was complete. With Bah Mar this is definitely not a dash across the finish line and in fact even if this was a relay, most people, Bahamians especially, do not even believe it is the anchor leg of the project. Some may even doubt that Bah Mar has reached the third leg of its race to success. Some feel it is just a political ploy (election soon come) and the concessions given to The Chinese and others to get Bah Mar to get moving is still top secret. And many are still skeptical that the project will actually be re-started, and will believe it only when they see it, if only because of the many false starts and empty promises and worthless assurances by the same prime minister. But hopefully it is a genuine and real announcement this time and Bah Mar will be off to another start. And hopefully the Bahamian natives will not have given away an arm and two legs to the Chinese to get to this point. With the softening economy, worldwide the Bah Mar battle is still an uphill one and is far from being a dive across the finish line. Very far. But any progress is good progress. Hopefully the government has now become more skillful and experienced with negotiating with the Chinese and with multi billion contracts in general and they will not let this one slip from underneath them. In the main time they (the government) should be busying themselves with "what if" projects in case all does not bid well with Bah Mar, especially since the project alone,and even with its spin off's do not solve the unemployment problem and it seems to be a definite case of 'putting too many eggs in the same basket.'
ashley14 8 years, 3 months ago
Familiar games! Politicians must learn their tactics from one another. Your right it's election year. Right before election they'll put as many as they can back to work, giving the citizens some new hopes. Then in hopes we will forget all of the underhanded stunts they have pulled. Exactly the same in the US. A few years back 50% of our homes were being foreclosed on, when the banks had given these loans to people they knew couldn't afford it. The loans on most homes in the US come from Franny May, which is government money. When they foreclose guess who owns the house. The government. Some believe this was the idea when they loaned the money. All at the same time you could not even get extra work at McDonald's. Food prices escalated, gas prices went to $4.00 at gallon. I know that is cheap for the Bahamas, but we drive 30 to 40 miles a day to work at least. The average family burns 1 1/2 to 2 tanks of gas per week. Now they don't even talk about those days. I bet if your family lost everything you haven't forgot.
proudloudandfnm 8 years, 4 months ago
Is this like the BTC anouncement? Still looking for those 2% shares....
arussell 8 years, 4 months ago
My only question is who is the buyer.... I'll go ahead and guess its the Chinese if not maybe Phil Rufin
banker 8 years, 4 months ago
Who is going to occupy it? The big hotel chains have been burned badly. Stop-over tourism is down. The resort is a shoddy build, not up to standards. This is putting lipstick on a sick pig and trying to sell it.
jusscool 8 years, 4 months ago
Mr. Prime minister what are the real details on this deal? What have you promised the Chinese ? Have you given 1000 Chinese citizenship ? Have you given away more of our land? There is kiss behind day on Lv97 , and it's radio host being unfear about the real truth about the situation! What are the details!
Well_mudda_take_sic 8 years, 4 months ago
Here's all you need to know about this agreement that Christie purports his (not our) government has made with his (not our) Chinese friends:
1) The purported agreement is cloaked in secrecy and probably has been sealed from prying public eyes in even our Supreme Court; even the appointed receiver remains mum and no doubt will eventually say little if anything about the additional concessions sought, better still, extorted, by Christie's Chinese friends from a very politically vulnerable and lamed brain Christie.
2) The Chinese lender (CEXIMB) and the parent company of the Chinese construction company (CCA) have had, and continue to have, Christie's gonads in an ever tightening vice-grip since his tortious and very costly meddling and interference in the project.
3) If indeed a deal has been struck with Christie's Chinese friends, it can only mean the Bahamian people will be saddled with additional debt (borrowings) to bail out the losses that should be borne by the CEXIMB and CCA, and our Public Treasury will never see a dollar of taxes or fees of any kind from the Baha Mar development for at least the next 40 plus years, at which time the operating life of the development will have come to an end.
4) The structural soundness of the development will remain hidden from prying eyes by continuing to use the same unqualified Chinese contractor (CCA) to complete the project and will only come to our attention, actually the world's attention, when the serious structural defects manifest themselves through loss of life.
5) Vomit Christie, the Wicked Witch of the West, Bag Man Baltron Bethel, Gomez the Minion and Winder the Accommodating Receiver are all going to rightfully have their pants sued off in the U.K. High Court by Baha Mar (the Izmirlian family); we, the Bahamian people, will need to change our current corrupt Christie-led government in order for our Public Treasury to not be saddled with the enormously high legal fees that these individuals should bear for their own account.
6) We, the Bahamian people, can be rest assured thousands of Chinese will be receiving work permits so that they can feed, clothe, educate and provide for the medical needs of their families back home in China while thousands of equally qualified Bahamian construction workers go unemployed; that's the way our condescending and merciless Christie treats "his" Bahamian people.
7) Our attorney general a.k.a. the Wicked Witch of the West and her family members will be able to keep all of the retail floor space in the development, and will be compensated for all of their related costs by Bahamian taxpayers directly or via the Chinese, notwithstanding the most egregious conflict of interest that resulted in her advising and taking the foolish actions that she did to thwart the bankruptcy process in Delaware among other deviously corrupt things.
What a joke!
xtreme2x 8 years, 4 months ago
Bahamas was downgraded from Baaa2 to Baaa3. what ever that means yesterday and Yesterday the Chinese agreed to worked on stall Baha ma project. I wonder why the Chinese was not in the crew when the government made that announcement.
I SMELL SOMETHING STINK!!!
jackbnimble 8 years, 4 months ago
I was just about to post a similar comment but you beat me to it!
Listen, this Government is very good at DEFLECTING. How is it this announcement is being made at the same time that Moody has announced another downgrade. I agree. I smell a rat! A big rotten one!
I'll believe this when I see the imprint of the nails and feel the piece in the side.
ashley14 8 years, 3 months ago
what does that mean? Baaa2 to Baaa3
John 8 years, 4 months ago
well don't forget Izmirilian in all this showboating. He is still following his claim against china EXIM bank and The China Construction Company. If he prevails, someone will have to cough up millions to compensate him, most like China Bank and CCA. Just hope Perry, in his dilly-dallying, does not cause the Bahamas to become a party to this lawsuit.
SP 8 years, 4 months ago
........................ ANYBODY WITH SENSE Willing To Trust This Clown? ...........................
PM Christie could open 10 Baha Mar's, walk on water, turn water into wine and levitate for all to see. NOBODY trust Christie!
The fine print of the deal will reveal Christie sold out the country to the Chinese to save his own ass.
birdiestrachan 8 years, 4 months ago
this announcement has made your folks so very sad. You all really have to dig deep in the mud to find something wrong and mean to say. it was bad when nothing was been done. but now that there is something being done it is even worse for you folks. "The Chiicken licken " crew. I am happy for the persons who will benefit. Is it to hard for you folks. to wish others well.?
banker 8 years, 4 months ago
Sigh birdie ... more dead good news.
(1) They say that the work will be finished in late winter of 2017. Wanna bet? The Pointe is already behind schedule and won't open when they promised.
(2) Waiting to see if the Bahamian contractors get paid. Have you noticed that Prime Minister Crisco Butt is like Donald Trump -- says whatever comes to mind whether it is true or not.
What I don't understand about the PLP sphincter-wipers like you, is that Crisco Butt has lied and lied and lied and now you believe him? Just how gullible are you?
Why is the deal secret? If they have nothing to hide, they would be shouting it from the roof tops. I bet you that some taxpayer money is going to pay off the Bahamian contractors. It will all come in in April when we get a regime change.
Honestman 8 years, 4 months ago
Banker, it is as clear as day that the ordinary tax payer will end up compensating the Bahamian creditors. Once the extent if the "deal" is revealed after the general election, I suspect we will find that Christie sold out Bahamians yet again in order to try and save his political skin. I would love to be wrong but he has history. Also, you can tell a lot from his body language at the press conference. He does not look like a man that has much to celebrate. Also, the timing of the announcement to negate the bad news of the downgrade is classic PLP. As I say, I would love to be wrong on all of this but we are dealing here with a PLP political party that exists on deceiving the gullible.
ThisIsOurs 8 years, 4 months ago
Hehe, "happy for the persons who will benefit", the leaseholders - AG and Adam.
Honestman 8 years, 4 months ago
A few things to reflect on:
The construction is unlikely to be completed by Dec 2017. CCA have history of missing deadlines and so it would be niaive to expect this latest deadline to be met.
The new owners are going to have to start from scratch with the business plan and the economic environment is much worse than when the original plan was established.
Where are the guests going to come from in this depressed world economy?
How much of the Nation's family silverware has the government sold off in order to persuade the Chinese to resume construction?
Given all of the above, I think the Bahamian public should be measured in any celebration of this new deal.
ThisIsOurs 8 years, 4 months ago
"Now you come on the scene and you did some magic. I don’t know what kind of shuffling you were doing but it worked and I must say on behalf of our president, and our members, we are indeed thankful because we know that in the construction industry, ...."
General statement, it is truly alarming the number of non intuitive, ill informed, non intelligent persons voted to represent groups of workers in this country. Its truly shocking. Not saying they're dumb, they just have zero knowledge of law, representation or negotiation. More often than not we see them representing their personal objectives and once the cunning politician offers them a carrot, they will say anything. Look no further than the nurses union, BTC and carnival.
When the prime minister made his first "non-news" press conference to announce they had "agreed to negotiate", Mr Forbes said what wonderful news this was for his association, only to come back disgruntled when he realized as everyone else did, that pretty words from a campaigning government mean little.
ThisIsOurs 8 years, 4 months ago
I believe the government has sold us into a perpetual Chinese jobs programme. The request to have Bahamar completed in on phase was the beginning. Thirteen years guaranteed Chinese employment. As long as Bahamar is not finished, the Chinese can offer their citizens jobs. We have no clue of the competence of these individuals and clearly no oversight from MOW for quality delivered. EXIM bank can keep the government on its knees with the carrot of a new completion date and more money. If the government doesn't see a pattern between that ugly, also behind time, monstrosity downtown and Bahamar, I don't know what to say.
If this government is reelected, I will not be surprised when the downtown redevelopment contract is awarded to the Chinese before the Pointe or Bahamar are finished, that will take us into 20 years of Chinese jobs, who knows how much of the Bahamas they will own at that point.
glasshalffull 8 years, 4 months ago
most of you people are ungrateful, ignorant, xenophobic, and totally disgusting, the place was cclosed for 20 months. now it will be open people will find work, bills will be paid, children will be fed yet all you can see is the big bad government hugging up with china..... for once in your miserable lives look beyond the politics... god absolutely horrible
SP 8 years, 3 months ago
....................... Spoken Like A True, Low Life, Elite POS! ............................
andron 8 years, 4 months ago
Part 1
Where does it mentions work permits for thousands of Chinese, or is that just speculation at this time? In addition, everyone who are being so extremely critical of Christie and the PLP for striking a deal with the Chinese have such a diluted short term memory. When Ingraham and the FNM first came into political power in 1992, they did the exact same thing in Freeport Grand Bahama. You guys are now complaining about how Christie sold the Chinese Bahmar, and Hilton.. well do some historical research and see where Hubert sold the entire Port Lucaya Strip (which was three major hotels at the time), a massive amount of land which a golf course was constructed, plus the ENTIRE FREEPORT HARBOUR, all to the Chinese. FNM supporters, who were still drunk over the FNM's victory over the PLP heralded it as the "greatest business and economic move ever done in the Bahamas" and they roasted Pindling and the PLP for not doing it themselves, blaming them for neglecting Grand Bahama. So no, fast forward to 2016, and the almost the exact same thing is transpiring again, only this time, under the PLP. You can't possibly blame the PLP for China Constructions failure to live up to their promise of completion back in 2014. You can't possibly blame the PLP for China's EXIM bank pulling a coupe on Sarkis in every effort to take/steal Bahmar away for themselves. You can't possibly blame the PLP for Sarkis filing bankruptcy back when he did (which was a pure business tactic to try and block the take-over and delay the inevitable. It's no use saying to you that the PLP was not involved in initial delays, because you guys have already made up your minds to hate them no matter what the circumstance. In 1992, the FNM said that the PLP government had no business being in the hotel business, and so they, the FNM set out and sold just about every government ran hotel. When the Cable Beach strip was sold, you guys ripped Christie and the PLP for doing exactly what the FNM did to Freeport's Port Lucaya strip. Yet in your limited memory, and blurred biased opinion of the PLP, you have become relentlessly creative in criticizing, attacking, tearing down, cursing, rebuking, chastising, mauling and viciously assaulting Christie at every single opportunity; and in doing so, you play blind, deaf dumb and stupid to any form of good intended to come out of these efforts.
andron 8 years, 4 months ago
Part 2
. No one seems to be saying that it is great that some 2,000 Bahamians whom were hired by Bahmar will all be compensated every single penny due them. What about the Bahamian contractors whom are set to be remunerated for the works that they have already put in. None of you wish to say "thank God that jobs will soon be forthcoming to many Bahamians whom are in desperate need for so long." No, in true Bahamian fashion, let's just be negative about the whole thing. We just can't ever seem to give thanks for anything intended for good, because we simple HATE the idea of acknowledges the efforts of someone or people we don't like. We refuse to thank God for using someone to deliver His blessings on other people because we hate the person God used (and for the record, God uses whomever He chooses to pass on His blessings, saints and sinners alike). You all are no different that the politicians out there. All of you are pawns in the political arena. All of you contribute, because the same way you accuse the PLP of always doing things in campaign mode, you are guilty of the exact thing; because every anti-Christie or anti-FNM or anti-DNA rhetoric that you spew, is an endorsement of your own personal political indicator on how you will vote the next time around. The only difference is that all of you are on the outside looking in, while they politicians are on the inside looking out.. and in that, neither you nor the politicians will ever fully understand or appreciate each other.
ThisIsOurs 8 years, 3 months ago
"because every anti-Christie or anti-FNM or anti-DNA rhetoric that you spew, is an endorsement of your own personal political indicator on how you will vote the next time around"
Nonsense. The only you can take away is, no one wants incompetence, from anyone
birdiestrachan 8 years, 4 months ago
annaron Thank you.. The truth will set as free, No matter what the doom and gloom members have to say.
Zakary 8 years, 4 months ago
Mr Christie and his Cabinet colleagues did not take questions from the media for further details on a prospective Baha Mar buyer, possible concessions granted to the EXIM Bank, and what the new deal means for the developer’s $800 million equity stake.
Why make an announcement if there are no specific details? They know that everyone desperately want the specifics, especially considering their abysmal track record. What a waste of air.
Let the speculation in the absence of any specific details begin.
Also, when has wanting legitimate answers from our Government become inciting this absurd idea of "gloom" and "doom". Oh please, that wall of text by http://www.tribune242.com/news/2016/aug…" title="">@andron is hilarious.
ThisIsOurs 8 years, 3 months ago
Possibly Antoine
Socrates 8 years, 3 months ago
So troubling that we live in a country where we need to give 'thanks' and praise for the government doing what governments are supposed too. Isn't this what we pay taxes for? Isn't that the reason various agencies exist? In the final analysis seems to me everyone did what they are expected and paid to do, no more, no less.
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