The Tribune

An ex-prime minister yesterday asserted he wants to see “progress and development” at an Abaco community once held up as sustainable development model following its baffling break with a former management partner.

Dr Hubert Minnis, who owns a home at Schooner Bay, spoke out after the project’s principals informed homeowners why they had severed ties with Sterling Global Financial only to retract this explanation just three days later. They then issued a new e-mailed message on December 14, 2022, that was vastly different in tone and content from the original.

For the initial note, issued by Tina Gascoigne, Schooner Bay Ventures general counsel, on behalf of principal developer, David Huber, on December 6 appeared to blame Sterling for the two sides’ parting ways just seven months after their tie-up was first unveiled. Then, five days after this was retracted on December 9, Ms Gascoigne issued another message in Mr Huber’s name praising the developer of Paradise Island’s Hurricane Hole venue for the work it had done.

The initial December 6 e-mail stated: “As some of you may have heard, Schooner Bay Ventures is no longer engaged with Sterling Global at this time. Schooner Bay requires a number of factors and partners in place throughout its life span to take the project to completion.

“Schooner Bay Ventures retained the services of Sterling Global for specific purposes for a specified time period. Certain items were not in place at the end of such period in order for us to move to the next phase of the project. We are working with the parties necessary to execute on the overall plan for Schooner Bay, and will re-engage with certain parties, as we see fit, once all items are in place and according to the needs of the project.”

Tribune Business understands this missive left many Schooner Bay homeowners confused as to why the two sides had split. The e-mail, though, continued: “We have begun construction of a community pool at Schooner Bay located near the marina area. We are working to have that completed by Spring 2023. As the plans for accompanying amenities are completed we will advise as to the next phase of plans to be executed.”

However, this was followed just three days later by another e-mail from Ms Gascoigne labelled ‘Retraction’, which read: “I recently sent an e-mail noting the conclusion of Schooner Bay’s engagement with Sterling. I am retracting that notice. I will send a new notice shortly.”

That new notice, markedly different in content and tone, appeared on December 14. Sent once more in Mr Huber’s name, it read: “Sterling Global was engaged on a short-term basis. The management contract came to term at the end of October and was not renewed.

“During Sterling’s time there it completed its mandate, started a number of initiatives and created a road map for success in the longer term. Several near-term initiatives are underway, including construction of a community pool. Sterling wishes homeowners and Schooner Bay all future success.”

The drastic revisions, which occurred in the space of just over a week, suggest that Sterling Global, which is headed by David Kosoy and is also developing Montage Cay (the former Matt Lowe’s Cay) near Marsh Harbour, was less than pleased to have been identified as the cause of the parties’ split. It is understood that Sterling feels that Schooner Bay Ventures was responsible by not following through on its commitments and obligations.

Tribune Business sources familiar with developments, speaking on condition of anonymity, told this newspaper that both existing homeowners and potential purchasers of property in the south Abaco community had been discouraged by Sterling’s departure given that Schooner Bay has effectively stagnated over the past eight years under its current ownership.

Contacted yesterday, Dr Minnis told this newspaper: “I think the community wants to see progress and development there. It’s a nice development, and nice quiet space, and all those who live there love the community. I would like to see the development expand and progress but, at the same time, I like the safety and tranquility. I’m not one who is against progress and development; I’d love to see progress.”

Schooner Bay was initially held up as a model for sustainable, resilient development that The Bahamas is increasingly seeking to cope with the realities of climate change. However, its rate of build-out has slowed dramatically for much of the past decade. Schooner Bay’s abrupt change in direction appears to have coincided with its decision in 2013-2014 to part ways with Bahamas-based developer, Orjan Lindroth, and his Lindroth Development Company.

The latter had acted as the 220-acre project’s master planner and development partner since inception, handling all real estate sales and promotions. They were replaced by a succession of foreign sales companies who met with seemingly limited success.

While Mr Lindroth and his company were Schooner Bay’s public face, the project’s financing was provided by Dr David Huber. Dubbed “America’s richest Mormon”, Dr Huber made a multi-billion dollar fortune from patenting fibre-optic technology and then taking the companies that owned it public on the US stock market. He is understood to have invested around $100m in the project, although real estate sources said it is now likely worth only $50m.

“He knows he’s upside down. He knows it’s worth less than he invested,” one source said of Dr Huber. “He doesn’t have any amenities, he doesn’t have any community, he doesn’t have any people. Schooner missed out on the pre-Dorian real estate boom as well as the pre-COVID one when things were flying around; a double whammy. They’ve missed the boat twice, and now the market is starting to mellow.”

Tribune Business wrote a series of articles in late 2017 questioning the project’s management and other practices, with many of the issues raised not being directly addressed by Schooner Bay Ventures. The project is one of the few developments outside Nassau to attract Bahamian buyers.

Sterling had unveiled plans to develop a boutique resort at Schooner Bay when it was introduce to homeowners as the project’s management/operating partner at an April 2, 2022, meeting. It was viewed at the time as having the combination of local on-ground knowledge and international contacts that could make the development finally work.

A note of the meeting said it was attended by Mr Kosoy and Bill Green, Sterling’s president, as well as Michel Neutelings, who was described as the “main operations guy for Schooner”. Mr Neutelings, a partner in the Milo Group, was also lead project manager for the $200m Children’s Bay development in Exuma, although construction work has yet to start there.

Also present were Dr Huber and Ms Gascoigne, together with representatives of existing amenities at the community such as the Sandpiper Inn and Captain’s House. “Dr Huber started the meeting explaining that, to-date, he has invested $100m in Schooner,” the meeting summary said. “He has been working with Sterling Global for a while now to get an agreement for development of Schooner.

“There were several key messages during the session, the main one being they are looking to develop Schooner as a resort not a community (ie; not like Hope Town on Elbow Cay). As a resort, Schooner needs people to want to come and stay. Therefore we need to add some amenities and up the rental turnover, number of visits and length of visit stay. To that end, the first development will probably be a boutique hotel with a restaurant that is always open.

“Once revenues have increased, other amenities like a pool etc will be added in a phased approach; increased revenues equals increased amenities. Their [Sterling’s] model is to develop specific areas. Once that area is successful, they will go on to the next, hence the phased approach. Their model has been very successful to-date.”

No figures were provided in relation to the boutique hotel. “In the short term, they will be looking at the operational costs for running Schooner (geothermal, water/waste management, landscaping, security, etc) versus the revenue from things like HOA (Homeowners Association) fees,” the meeting summary said.

“Once this assessment is complete, there is a strong possibility that HOA (homeowners association fees) will increase. As well, they will be looking at consolidating other services like property management, marketing and new home sales/resales to achieve economies of scale (lower overall costs) and consistency in services. This approach should increase revenues for Schooner and increase rental income and home values for homeowners.

“The message was we are all part of the same team and need to pull together to make Schooner a success. Dr Huber and Sterling will assess their success on an ongoing basis. No exact length of term was discussed, but it will certainly be over a longer term, not six to 12 months.”