The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A GROUP of Schooner Bay homeowners have joined a legal action alleging the developer has “unlawfully interfered” with their rights, with the trial due in March 2018.

Documents obtained by Tribune Business reveal that the group became embroiled in a dispute between Schooner Bay Ventures and their Bahamian property manager, which ultimately cost them the opportunity to market their properties via a magazine with a 4.5 million monthly readership. They are claiming that the developer, headed by US principals, Dr David Huber and Tina Gascoigne, caused Coastal Living magazine to withdraw from featuring their properties in its vacation rental programme with assertions that have no basis in law.

Schooner Bay Ventures, according to the papers seen by this newspaper, informed the magazine that the homeowners’ property manager, Destination Schooner Bay (DSB), was breaching the 220-acre project’s covenants by its activities within the development.

The ongoing lawsuit was referred to in a letter to Carl Bethel QC, the attorney general, by attorneys for DSB and its principal, Bahamian realtor James Malcolm.

Jason Maynard, of Peter Maynard & Company, described it as an action claiming that the developer “has unlawfully interfered with DSB’s legitimate business activities at Schooner Bay and, as a result, has suffered loss and damage”. Further details are provided in a May 13, 2016, letter sent by the homeowners’ attorney, Gail Lockhart-Charles, to Courtney Pearce at Callenders & Co, who handles all litigation matters for Schooner Bay Ventures.

“The homeowners all wish to have the properties advertises in the Coastal Living Vacations Rental programme, and other such rental programmes as DSB, in its capacity as property manager, may arrange,” Mrs Lockhart-Charles wrote.

“It has come to our clients’ attention that Schooner Bay Ventures has contacted Coastal Living and raised concerns that DSB’s management of the homeowners’ Schooner Bay home rentals is a violation of the Declaration of Covenants and Restrictions governing Schooner Bay.”

Tribune Business reported on Tuesday how Ms Gascoigne, Schooner Bay’s general counsel, had cited the ‘covenants and restrictions’ in demanding that Mr Malcolm and DSB “cease and desist operations” at the development and not suggest he could provide rental or property management services.

That April 17, 2015, letter had described Schooner Bay as being “the only entity with the exclusive authority to operate real estate sales, rental or management offices at Schooner Bay” - something that violates Bahamian real estate law, as developers cannot engage in such businesses.

Mrs Lockhart-Charles, responding to the citing of Schooner Bay’s covenants, wrote: “Our clients dispute the allegations made by Schooner Bay Ventures that DSB’s management of the homeowners’ Schooner Bay home rentals is a violation of the Declaration of Covenants and Restrictions governing Schooner Bay.

“The actions of Schooner Bay Ventures in contacting Coastal Living, as alleged, amount to an actionable infringement of our clients’ rights and have caused our clients loss and damage.”

She continued: “As a result of Schooner Bay Ventures’ actions, Coastal Living has informed our clients that they are not able to move forward with placing the homeowners’ properties in the Coastal Living vacation rental programme until the dispute between DSB and Schooner Bay Ventures is resolved in a way that makes it clear to Coastal Living that they can proceed without any risk.”

Mrs Lockhart-Charles demanded on her clients’ behalf that Schooner Bay Ventures “immediately issue a written retraction” of its statements to Coastal Living, and confirm they had a right to place their properties in the rental programme and advertise them in the magazine and other publications.

She warned that legal action would follow if Schooner Bay Ventures did not comply, and has duly made good on this. The homeowners group includes both Bahamians and foreigners, with one property, Bennet Holdings Ltd, believed to refer to Bahamian accountant, Bennet Atkinson.

Tribune Business sources have alleged that the various legal actions stem from the developer’s desire to control all real estate activity at Schooner Bay. However, this strategy appears to have backfired, with much of the south Abaco development’s sales and rental activity having dried up over the past four years.

Schooner Bay Ventures is now on its fourth foreign real estate sales team in four years, having gone through Pordes Residential Sales and Marketing; Arizona-based Land Advisors Resort Solutions; and Carolina-located Burnett Partners.

A November 9, 2017, letter to Schooner Bay homeowners from Dr Huber announced the appointment of Construction Management and Development (CM&D) as the owner’s development and project representative, while Legacy Global Development has been hired to oversee real estate sales.

“We would like to thank you for your continued patience and support while we have been working to find the right path for Schooner Bay,” Dr Huber told homeowners.

“CM&D is an international real estate consulting firm with significant experience and technical proficiency in development, construction and operational management. CM&D’s project experience includes numerous successful residential resort and hotel developments in the US and the Caribbean basin.

“Going forward, CM&D’s scope of work will include management responsibility for the operation of the in-place amenities and improvements at Schooner Bay, along with the strategic oversight and implementation of the master plan, design elements, sales and future construction within the resort.

“CM&D will also be responsible for the oversight of property management functions including the reconciliation of past maintenance fees as well as the implementation of utilities fees moving forward.”

As for real estate sales, Dr Huber added: “We have retained the services of Legacy Global Development to manage our sales operations at Schooner Bay. Legacy is an international sales, marketing and development company with experience in the Unites States, Latin America and the Caribbean basin.”

Legacy’s website shows its main regional experience lies in Belize and Costa Rica, with properties such as Orchid Bay, Hemingway Hotels and Resorts and Wyndham Grand. Its website now features Schooner Bay, and a link to the property.

CM&D appears to have more experience in the Caribbean, the US-headquartered company advertising its involvement in projects in the Cayman Islands, Virgin Islands and Turks & Caicos on its website.

Multiple Tribune Business sources have confirmed that Dr Huber has previously been seeking either a purchaser or joint venture partner for Schooner Bay. His investment in the project to-date is said to be around $80 million, and it is thought he had been seeking $90 million for an outright sale, although multiple realtors spoken to by this newspaper suggested it was worth $40-$50 million at most.

Replay Resorts, the Canadian-based developer of the former Ocean Place condo complex on Paradise Island, is understood to be one of the entities that looked at Schooner Bay. However, it and all others were said to have been deterred by the terms and level of control that Dr Huber was seeking to retain.

With the hiring of CM&D and Legacy, it appears any sale of joint venture partner search has been curtailed for now, and that Schooner Bay’s principals have decided to move in a new direction by engaging another sales/management team.