The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Canadian-based developer with $500 million in assets has emerged as the potential buyer for the former Ginn sur mer project in Grand Bahama’s West End, Tribune Business can reveal.

Multiple contacts confirmed that Skyline Investments, a Toronto-based real estate investor/developer, with a focus on hotel and resort development, has been negotiating with the $4.9 billion Ginn project’s two owners for several months.

Skyline and its senior executives are understood to have given a three-hour presentation on their plans to the Minnis Cabinet on Tuesday, with the Government’s reaction understood to be favourable.

Cabinet ministers, and Bahamian professionals involved in negotiations to close the purchase, were tight-lipped yesterday when contacted by this newspaper.

K P Turnquest, deputy prime minister and minister of finance, replied: “Unfortunately, I’m not at liberty to talk about that” when the matter was raised with him. Kwasi Thompson, minister of state for Grand Bahama, also declined to comment when contacted by Tribune Business.

Gail Lockhart-Charles, the Bahamian attorney for Skyline, told this newspaper via e-mail that she was “unable to comment” on this newspaper’s inquiries regarding her client’s interest in West End.

Still, Tribune Business sources said the Cabinet presentation suggested that Skyline’s negotiations had advanced to the point where a sales agreement had either been signed, or was at the point of being concluded. Once that happens, the parties to a real estate deal typically have 60 to 90 days to close.

Should the purchase be concluded, it would end the near-decade standstill endured by West End since the original developer, Bobby Ginn and his Ginn Clubs & Resorts, defaulted on their project financing in the wake of the 2008-2009 recession.

It would also mark the first positive foreign direct investment (FDI) for Grand Bahama in years, and provide some relief from the continued Grand Lucayan closure that will mark its one-year anniversary next week.

Obie Wilchcombe, former minister of tourism and ex-West End MP, told Tribune Business he had been aware of Skyline’s interest in the former Ginn property prior to the election, although no formal proposals had been submitted to the Christie administration.

Acknowledging that Skyline had been furthest advanced in its negotiations prior to May 10, Mr Wilchcombe said: “I’ve heard about them, but they made no formal inquiries of us.

“They had done some preliminary work and inquiries, and I was made aware, as the MP and minister of tourism, that they were having meetings and having persons survey the property, looking at the potential of it all.”

Tribune Business sources said a Skyline team has been present on Grand Bahama for several months, conducting due diligence, and Mr Wilchcombe said: “We understood they’d exhibited a real, significant interest.

“There are 2,000 acres of land just sitting there. It’s been long-standing. It’s a prime property, and if we get a good company interested in developing the property, and developing a relationship with the community and working with the people of the community, that will be fantastic.

“It’s a property that is waiting for something to happen, and if we can find a good investor with the money and good vision for the property, and a willingness to work with the community, we’ll welcome it.”

Mr Wilchcombe said any Ginn sur mer purchaser would inherit a solid foundation, given that the original developer had invested $200 million in developing infrastructure that is already in the ground. Numerous potential buyers have ‘sniffed’ the property over the years, but Skyline is the first to take a serious look.

Tribune Business sources yesterday suggested that what had once been a $60-$80 million purchase price for Ginn sur mer had dropped to around $40-$45 million, with Skyline understood to have agreed a deal in that range.

Negotiations have involved the added complication of dealing with two vendors. What would have been the core project is owned by Lubert-Adler, the Philadelphia-based investment bank that was Ginn’s financing partner.

It holds 280 acres that were earmarked as the site for the hotels and casino, and its landholdings also include key amenities such as the airport, marina and utilities.

Lubert-Adler also controls the Old Bahama Bay Resort, the golf course, the existing marina, commercial facilities such as the restaurants and retail, and associated operational facilities.

But a Credit Suisse-led lending syndicate took possession of the remaining 1,476 acres at the former Ginn sur mer project after Ginn Development Company defaulted on its $276 million loan.

It effectively inherited the real estate component of the Ginn project, and hired Replay Resorts to master plan the property. Bill Green, Replay Resorts’ chief operating officer, failed to return messages seeking comment yesterday.

Lubert Adler and Credit Suisse have worked together in the belief this is the best way to maximise their exit price - and potential recovery - by selling the former Ginn sur mer as one.

Skyline Investments, which is listed on the Tel Aviv Stock Exchange, describes itself on its website as having $500 million in assets. It specialises in real estate investment and development related to the hotel/resort industry.

It describes itself as “sourcing new acquisition opportunities to grow and diversify its cash flow in North America”, with an emphasis on geographical diversification.

Current properties include the Hyatt Regency at The Arcade in Cleveland; the Renaissance Cleveland Hotel; Bear Valley Ski Resort in California, plus a variety of mixed-use resort developments throughout Canada.

Skyline’s plans for the Ginn sur mer property are unclear, although its development will likely be less high-rise than the original developer’s.