The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government believes the purchase of Walker’s Cay, the northernmost island in the Abacos, could be sealed by June, with the Bahamas “back in play” as a top investment destination.

Khaalis Rolle, minister of state for investments, told Tribune Business that a deal for Walker’s Cay was “very, very close”, with two rival groups battling to acquire the island.

He added that the Walker’s Cay situation was just one indication of the “new life” he and the Bahamas Investment Authority (BIA) were seeing, as investors ‘dusted off’ projects that had been placed on hold for several years as a result of the 2008-2009 recession.

The Minister said activity was also occurring with investment projects that had been placed into bankruptcy, or whose owners were seeking a buyer, citing the pending sale of Chub Cay in the Berry Islands as an example of the former.

Mr Rolle’s comments indicate that, notwithstanding the pessimism surrounding Value-Added Tax (VAT) and fiscal reform, the momentum is starting to shift in a positive direction in certain segments of the Bahamian economy.

These segments are the ones driven by external forces and the world economy, such as foreign direct investment (FDI) and tourism.

“We’re doing some good things,” Mr Rolle told Tribune Business, indicating that the pick-up had been especially noticeable on Abaco.

“We are now very close to a deal, we think, to getting Winding Bay restarted. There have been significant talks.”

Marriott Vacations Worldwide and its Ritz-Carlton brand have been seeking to sell the Abaco Club for around 18 months, having acquired the property from its original developer, UK entrepreneur Peter de Savary.

The resort operator had offered to sell the property for $28 million to a group of existing homeowners, who previously told this newspaper that the price was vastly over-inflated.

The homeowners, at that stage, were planning to forge ahead with their lawsuit for “at least” $10 million in damages against Marriott. Another offer to acquire the Abaco Club, though, has come in from the Bahamian Police Staff Association pension fund, which is working with a Minnesota-based financier.

Mr Rolle, meanwhile, was just as upbeat on the prospects of securing a buyer for Walker’s Cay. While declining to identify the two contenders, he told Tribune Business: “We’ve been having very productive talks on Walker’s Cay.

“We feel it will be finalised by June. There are two proposals. With this one, we’re very close. Very, very close.”

The Minister indicated that prospects of a deal were higher than in two previously failed attempts to purchase Walker’s Cay since 2006.

A US-based resort developer, Cay Clubs & Resorts, saw its attempt to purchase Walker’s Cay - first announced in early 2006 - fall through in 2007.

It is understood that a key factor in the deal’s collapse was the likely costs of the environmental clean-up work required on the island, which was devastated by Hurricanes Frances and Jeanne and has effectively been closed ever since. All the buildings were left in various stages of disrepair.

Subsequently, a $20 million offer to acquire Walker’s Cay was made under the former FNM administration but that, too, fell through.

The island’s vendors are the Abplanalp family from New York, who invented the use of precision valves in aerosol cans via their Precision Valve Corporation. Prior to his taking office in 2007, the Abplanalp family was represented by former Prime Minister Ingraham and his law firm.

Walker’s Cay has the strategic advantage of being the northernmost island in the Bahamas, thus making it the first stop-off for US boaters and yachtsmen as they move down the Abacos chain - already a well-known destination for this market.

The island has a world-famous reputation among boaters and sports fishermen, with television programmes previously featuring activities such as shark feeding on the island. Some 80 per cent of the world’s game fishing records were held by boats who had come from the 100-acre Walker’s Cay.

The 71-room Walker’s Cay Hotel & Marina, which has 62 guest rooms, three villas, and the three-bedroom Harbour House was heavily damaged in the 2004 hurricanes. Apart from the 2,800 foot airstrip, Walker’s Cay houses the Conch Pearl and Lobster Trap restaurants, two bars, the Treasure Chest gift shop, the Sea Below Dive Shop, freshwater and saltwater swimming pools, tennis courts and a 75-slip marina. The hotel is 50 feet above sea level, and the island provides access to both shallow water and deep water fishing, with boaters in deep water within minutes of leaving.

Elsewhere, Mr Rolle said the Government was “facilitating” Texas energy billionaire, George H. Bishop, the 77 year-old founder and chief executive of GeoSouthern Energy Corporation, in his acquisition of the Chub Cay development.

“We’re seeing new life with some of the projects that have been stalled for many years,” the Minister told Tribune Business. “Chub Cay is one. He [Mr Bishop] is ready to invest.”

Mr Bishop has agreed commercial terms with Scotiabank (Bahamas) to acquire the property, which has been “in limbo” for more than six years. Tribune Business understands that the deal is intended to close at the end of this month, and all sides are working feverishly to complete it.

Scotiabank (Bahamas) took possession of the Chub Cay project in 2009, after its original developers - the Florida trio of Walter McCrory, Bob Moss and Kaye Pearson - defaulted on the $45 million loan they received to finance the construction build-out.

The bank appointed Craig A. ‘Tony’ Gomez, the Baker Tilly Gomez accountant and partner, to act for its as Chub Cay’s administrator. He is understood to have been working with Chub Cay’s existing homeowners to maintain the property, and keep it operational, during the search for a buyer.

Mr Rolle said the Government was taking an increasingly proactive role in ensuring the relevant parties consummated the sale/acquisition of existing Bahamas-based resort assets and FDI projects.

“We’re taking an active role,” he told Tribune Business. “We’re not leaving it to the potential purchasers or owners to drive the process. We’ve been flying back and forth, talking to them, cajoling them, doing whatever it takes to get them to the table.

“If you strip away all the politics and emotion attached to it, base it on analysis and the momentum, you can see we’re back in play. It’s just keeping our nose to the grindstone, continuing to push and getting all these things facilitated.”