The Tribune

By RICARDO WELLS

Tribune Staff Reporter

rwells@tribunemedia.net

THE original developer of the Baha Mar resort yesterday said the resort’s continued completion delays, missed opening dates and “now supposed staggered opening” of the entire property into late next year shows that Sarkis Izmirlian’s offer “is superior” to the current situation.

However, despite this, and despite not having had any response to his many purchase offers, as Baha Mar’s former developer, Mr Izmirlian said his company “stands ready, willing and able to buy Baha Mar today and complete it immediately with Bahamian workers and Bahamian contractors. The chronic delays created by CCA for either self interest or patent incompetence must stop now. The Bahamas deserves better.”

The statement, released by Mr Izmirlian’s company, BMD Holdings, also criticised the continued involvement of the project’s construction firm, China Construction America (CCA).

“The undeniable financial harm caused by the project’s construction firm, CCA, continues unabated. The misleading, and often illogical statements now being made about progress at Baha Mar and its opening have made Baha Mar into a Potemkin hotel - that is, using this still incomplete property to deceive others into thinking the situation is better than it is,” the statement said.

The statement also said the “undeniable financial harm” caused by CCA continues unabated, adding that there is now “no reason to have confidence” in the project.

“Bahamians do not really know if there is a final ownership deal firmly in place for Baha Mar,” BMD Holdings said. “Bahamians do not know what promises and giveaways may have been made to Chow Tai Fook, the alleged new owner, to attach its name for now to the property. And, for sure, the real future of the project still sadly remains in the hands of CCA, which has a long clear record of misleading and failing on Baha Mar.”

BMD said the misinformation about the resort must stop immediately, as it was causing complete chaos for all those intimately involved and those Bahamians depending on the project for employment.

The statement continued: “Just last week, for example, a statement was made to the media that, when we were the developers of Baha Mar, it did not have a completion guarantee from CCA.

“That assertion is patently false. Specifically, we required and had two completion guarantees from CCA’s parent company, China State Construction Engineering Corporation. CEXIM also held a completion guarantee from CSCEC.

“In fact, as the public record shows, our Baha Mar brought suit to enforce the completion guarantees in the United Kingdom contemporaneously with the commencement of the Chapter 11 reorganisation process. Unfortunately, as the public record also demonstrates, the government of the Bahamas interfered and instead forced Baha Mar into liquidation proceedings, bringing additional delays to the project.”

BMD claimed that the Christie administration’s “hand-picked” provisional liquidators did nothing to actively pursue the completion guarantee claim, which it noted, could have amounted to “hundreds of millions of dollars” for Bahamian creditors.

The company added that the receivers, as agents of the China EXIM Bank, also did not pursue the suit to enforce the completion guarantees.

BMD noted that the move did not come as a surprise to them because China Exim Bank was owned by the same company that oversaw CSCEC and its subsidiary, CCA.

Sunday’s statement continued: “It also is important to note that subsequently our affiliate, Granite Ventures, brought proceedings in the Bahamas Supreme Court in an attempt to have the guarantees claims pursued. But, reflecting its common ownership with CSCEC, CEXIM chose not to pursue the claims despite it being to the detriment of all parties affected by CCA’s failures on Baha Mar.

“Such performance guarantees in terms of CCA once again are very much called for with respect to Baha Mar. As the Chapter 11 filings and Bahamian court papers make clear, CCA was a serial failure in meeting schedules it set to complete Baha Mar.

“That same incorrect statement to the media about performance guarantees also noted the high costs associated with the original development of Baha Mar.

“These costs are almost all a direct result of CCA’s documented over billing and numerous failures—its failures to perform competently, its failures to have proper procedures and controls in place, its failures to properly staff the project, and, importantly, its failure to meet completion commitments made both to us and Prime Minister Christie. Throughout the process, independent mediation on numerous occasions found CCA to have committed these violations.

“And now, sadly for the Bahamas and the prospects of Baha Mar, the same song, with some slightly different notes, is being played.

“Chow Tai Fook, which has refused to close on its supposed ownership of the property until construction is completed, suggests publicly a possible, although seemingly unrealistic, opening time for Baha Mar only to, within days, push that opening back to a much later ambiguous date—admitting in so many words it is all dependent on when CCA actually completes, if it ever does.

“Chow Tai Fook’s statements regarding a soft opening which it presently projects for April can’t even provide an approximate number of rooms that will be open.”

BMD said it, like the entire country, was still waiting some clear indication on who will operate the resort’s casino, or whether a gaming license has been granted at all to the resort.

“Hyatt issues a very bare bones press release confirming it will be part of an opened Baha Mar, but says nothing more about when,” BMD said.

“Rosewood goes a step further and, in what appears to be a huge walk back from Chow Tai’s Graeme Davis’ rose-coloured statements about soft and full openings, makes clear that it will not commit to being part of Baha Mar until sometime in 2018.”

BMD said with delays now into 2018, CCA and the liquidation process have cost the Bahamas nearly $4bn in revenue, 15,000 jobs and over $500m in tax revenue.

“As Baha Mar’s former developer, we reiterate our position that, despite never having received a response to our many purchase offers to CEXIM, we stand ready, willing and able to buy Baha Mar today and complete it immediately with Bahamian workers and Bahamian contractors. The chronic delays created by CCA for either self-interest or patent incompetence must stop now. The Bahamas deserves better,” BMD added.

Last October, Mr Izmirlian, CEO of BMD Holdings Ltd, made an offer to purchase the stalled $3.5 billion dollar resort “at a price in excess” of selected undisclosed bid.

In a letter dated October 10, addressed to Liu Liange, vice-chairman and president of the Export Import Bank of China, Mr Izmirlian said BMD Holdings was prepared to pay 100 per cent of all “substantiated” Bahamian claims and all money owed to Bahamians and foreign employees.

He also said BMD Holdings would drop “all of our appeals and legal actions in effect within the Bahamian courts” upon acceptance of the offer.

In response, Attorney General Allyson Maynard-Gibson said the purported offer by BMD was a matter for consideration, in the first instance, by EXIM.

The resort was then reportedly sold in December, with the details of that deal yet to be presented publicly.