The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Ocean Club owner’s $550m “total investment” in its high-end Cabbage Beach project is forecast to deliver a “resounding” $721m boost for the Bahamian economy during its first 20 years in operation.

The projected impact from the Ocean Club Residences at Cabbage Beach, which are to be constructed on a 6.15 acre site on Paradise Island’s Casino Drive, is disclosed in the development’s newly-released Environmental Impact Assessment (EIA) which revealed that the 391 full-time employees will enjoy a combined $223m in income spread over its first two decades.

Some $340m, or 62 percent, of the $550m upfront investment is earmarked for “local construction” spend with an “average” 827 workers required over the 43-month build-out. No start date was provided for the Residences, as this is dependent on obtaining all necessary government approvals and permits, but the EIA forecast the project will generate some $67m in income for Bahamian construction workers.

And, likely of more importance to Cabbage Beach vendors, as well as Bahamians and tourists that frequent the beach and general area for recreational purposes, the Ocean Club Residences EIA pledged that “beach access will be provided during construction” that is expected to take three-and-a-half years.

The developers and their contractors plan to employ shipping containers to create “safe passage” through the construction site during a 19-month period in the middle of the build-out so that vendors can continue in business. And, while beach access will be “managed” during the final six months of construction, the developers also plan to build “permanent kiosks” for vendors along the beach access route.

Once fully completed in 2027, an economic impact assessment by Tourism Economics is projecting that visitors attracted by the Ocean Club Residences will grow by more than 3,000 or 53.8 percent during the first five years in operation - from 5,695 to 8,760 in 2031. And, over that same period, total spend by these visitors will expand by $8m or 67 percent - from $11.9m to $19.9m.

Visitor volumes, including both unit owners and guests, are ultimately forecast to stabilise at around 8,800 per annum. The biggest boost to government revenues would occur during the three-year construction phase, according to Tourism Economics’ analysis, with tax breaks or incentives/concessions slightly exceeding revenues to the Public Treasury during the first 20 years of full-time operations.

These incentives will likely include a real property tax waiver, but the assessment projected that the $197.2m in total government revenues generated by the project in its first 23 years - construction and full-time operations - will “outweigh” the cumulative $158.9m in tax breaks/concessions by a factor or ratio of 1.2 times.

The jobs and economic activity generated by the extra visitors attracted by the Ocean Club Residences will be used to justify the tax incentives received by the project, which are estimated at around $6m-$7m per year during the first 20 years of operation.

“While there will be short-term economic impact due to the safeguards put in place, site management of the vendors and public during construction, the socio-economic impact of the development in the long-term is resoundingly positive,” Bahamian environmental consultancy, Bron Ltd, wrote in the EIA.

“Community plans include the incorporation of planned Bahamian vendor locations within the property footprint, vendor training and an overall improvement to the experience available to employees and customers. Beach access has been incorporated into the design, and the development is expected to stimulate the economy of New Providence.

Access Industries, the existing Ocean Club’s owner, is partnering with Florida-based real estate developer, Two Roads Development, and the high-end Four Seasons resort brand to develop the 67 private residences that will be priced between $6.5m and $23m. None of the parties could be reached for comment before press time last night, but it is thought a Heads of Agreement signing with the Government is imminent.

“Total investment will amount to more than $550m,” the EIA asserted. “Approximately $340m of the total investment is anticipated for local construction spending within a 43-month period. The project will employ long-term and short-term local labour during construction and operations phases.

“An average 827 additional full-time employees during the construction phase over three years, and an average 391 additional full-time employees during operations over 20 years of operation are expected during the duration of the project.”

The environmental report added that construction of the Ocean Club Residences is forecast to generate a combined $317m economic boost for The Bahamas, increasing the country’s economic output or gross domestic product (GDP) by $237m over the three-and-a-half year build-out while providing $67m in collective earnings for construction workers.

And, over the first 20 years of full-time operations, the total economic impact is pegged at $721m with a GDP boost of $476m over those two decades. While construction and full-time operations are thus predicted to inject more than $1bn into the Bahamian economy, this will be spread over 23 years for an average annual effect of $43.478m. The greatest impact will be felt upfront during construction.

“Total impacts in The Bahamas’ economy would amount to between $33m and $43m per year at stabilised operations,” the Tourism Economics analysis said of the Ocean Club Residences. “New visitor volume will stabilise at nearly 8,800 annual visitors. Operations will ramp up as units are constructed and sold, with stabilisation expected to occur after three years of operations.

“Project managers expect initial occupancy of the units to be just over 50 percent and ramp up over three years to 80 percent at stabilisation. The new capacity and projected occupancy would correspond to a stabilised volume of nearly 8,800 annual visitors to The Bahamas.

“Visitors to the resort will spend both on-site on lodging, and both on-site and off-site on food and beverage, recreation and excursions and local transportation. Total expenditures in the Bahamian economy would amount to between $20m and $27m per year at stabilised occupancy.” 

 The EIA pledged that the developers are “committed” to ensuring vendor and public access to Cabbage Beach is maintained both during the construction and operational phase. “Beach access will be provided during construction,” the report promised. 

During the first eight months of construction, a temporary path between eight to 12 feet wide will be provided to the project’s west featuring “protective fencing” and other safeguards against building site traffic. Then, for the following eight months, a similar path will be provided along the project’s eastern boundary.

Starting in the 17th month of construction, and continuing for the following 19 months, the developers will employ converted shipping containers “placed end to end”, and with openings for ventilation and temporary lighting, to “provide safe passage through the construction site to allow vendors access”. These will be “secured with hurricane-rated measures”.

The EIA said the final six months of construction will involve “managed beach access” while “the permanent vendor kiosks and permanent beach access construction is completed”. It added: “The temporary beach access may experience periodic closures to finalise landscaping, handscaping, utility testing, utility commissioning and final grading as needed....

“The project is committed to continue to allow public access to Cabbage Beach during the operational life of the project... Several designated areas have been incorporated into the project’s design, which include kiosks and vendor provisions/amenities inclusive of locker space and restroom facilities.

“Vendor inclusion into the project’s design fosters relationships with stakeholders. These accommodations also provide shelters for vendors and an aesthetically pleasing venue for both vendors and guests. Furthermore, training opportunities will be offered to local vendors to assist with the continued development of the Bahamian tourism brand.”

The Ocean Club Residences will feature four buildings, including residential units; a beach club house; fitness centre; pools; restaurant; bar; underground parking garage; and back of house facilities. A sheet pile wall, built 19 feet from the high tide mark, some 675 feet long and five to ten feet “above ground”, will be temporarily installed during construction to counter any beach impacts and erosion.