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Rosewood’S Baha Mar Exit Plan ‘Not Surprising’, Says Turnquest

By NATARIO McKENZIE

and KHRISNA VIRGIL

THE Opposition’s finance spokesman said yesterday that it was “unfortunate” but “not surprising” that Rosewood was seeking to terminate its hotel agreements with Baha Mar, saying “we hope that this isn’t the first domino”.

K Peter Turnquest, the East Grand Bahama MP and Free National Movement (FNM) deputy leader, told Tribune Business that given the public wrangling between the government and the developer as well as the current legal disputes involving the $3.5 billion stalled Cable Beach resort project, it was no surprise that Rosewood was looking to make its exit.

“It’s an an expected outcome to all the public wrangling that’s been going on and the verbal sparring that’s been going on between the ministers, the Prime Minister’s Office and the developer,” Mr Turnquest said. “It is not surprising or unexpected that the brands would start to have questions about the project and the effect that a protracted winding up may have on their own brand reputation. It’s not surprising at all and it is unfortunate that we have come to this point and we certainly hope that an intervention by the government and the developer would be able to satisfy Rosewood as to their concerns, meaning that hopefully there are some options on the table for a speedy resolution of this matter.”

Mr Turnquest said he “appreciated” the hotel brand’s actions because Rosewood Hotels still has a reputation to protect and that given the likely “protracted” nature that the government’s proposed wind-up of the resort will take, he had strong doubts that the $3.5bn development would open by the end of the year.

Rosewood Hotel and Resorts International yesterday filed a motion for relief from the automatic stay granted by a Delaware Court judge in Baha Mar’s bankruptcy proceedings, to allow for the termination of its licence agreements and other agreements with Baha Mar. Rosewood entered a hotel management agreement with Baha Mar in 2011. Hyatt and SLS Lux were the other hotel brands to be featured at the Baha Mar.

Mr Turnquest said that given the current legal battle involving Baha Mar, it would be difficult for the developer to attract another brand to replace Rosewood. “There are not too many people who are going to be interested in entering a situation where litigation is involved. It’s an unstable situation and most business people would want to stay clear of that until it is settled.”

On the protection of Rosewood’s reputation Mr Turnquest said: “The brand must have had tremendous concerns about them being attached to a failed development compounded by the Minister of Foreign Affairs or the Minister of Labour’s comments which threatened foreign investors. The confidence to move forward was just simply not there.

“Neither does the winding up petition give them comfort because it gives rise to concerns of the viability and the amount of time it would take for that matter to be resolved.”

While the government has said it will continue to pay the resort’s Bahamian staff until the $21m owed to the mega resort by the government for roadwork on West Bay Street is exhausted, the Christie administration has not done the same for the foreign workers.

Mr Turnquest said this brings to light other issues that he hoped the developer and its hotel brands could iron out. “The nature of liquidation is that they don’t happen quickly and because of the complexity I imagine it would take a few months for the liquidators to get a full understanding of every aspect of this project. With that I have my doubts as to whether they will be able to bring about a successful completion and opening by the end of the year. This is compounded by the fact that foreign employees have not been paid.

“But now the question arises of whether the talents of the existing foreign workers will still be available. If new people have to be brought in they will have to have a period of adjusting in order to successfully operate. This brings up staffing challenges,” Mr Turnquest said.

Last year, the Morgans Hotel Group terminated its hotel management agreement with Baha Mar, having initially entered the agreement with the developer in July 2011, to develop and operate the 300-room ‘Mondrian at Baha Mar’ hotel. A dispute had erupted over Baha Mar’s failure to fulfil certain conditions contained that agreement. In particular, the 20-year agreement for Morgans to provide “direction, management and supervision” of the Mondrian property required that Baha Mar obtain a “non-disturbance agreement” from its financiers within six months of the deal’s signing. Such an agreement, which Baha Mar had to obtain from the China Export-Import Bank, its multi-billion dollar lender, would have allowed Morgans to continue uninterrupted management of the Mondrian even if the developer defaulted and the Chinese institution had to foreclose.

Comments

BaronInvest 3 years, 10 months ago

Wow, first politican i read about here who doesn't make me laugh in a sarcastic or ashamed way. Only guy who get's so it so far, but why is only in the opposition ?

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Maynergy 3 years, 9 months ago

Support (S &AED) (i.e) Shock & Awe Economic Development) for the Bahamas. Also support Comprehensive Public Transit for the islands of the Bahamas. " The Commonwealth of the Bahamas (known as the Bahamas); since the birth of independence July 10th 1973, is urged to established a "Comprehensive public transportation" system (cpt) to benefit and safeguard the integrity of mass transportation for ALL the people." Patriot Ammadou Gibson (ImagineBahamasBeyond2017

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