The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

SuperClubs Breezes owner yesterday said its own expansion and creation of up to 300 jobs would be further delayed by Baha Mar’s woes, adding of the latter: “It’s a tragedy for the Bahamian people.”

John Issa told Tribune Business that his neighbour’s filing for Chapter 11 bankruptcy protection had left SuperClubs’s own plans, which called for a 50 per cent expansion of its Cable Beach property, “in limbo”.

He added that the all-inclusive resort had incurred a “substantial” loss of foregone profits due to prior delays to its expansion, which resulted from the wait to complete a ‘land swap’ agreement with Baha Mar.

That agreement, contemplated via a 2011 Letter of Intent between the two Cable Beach resort owners, is the subject of ongoing litigation, with Mr Issa yesterday saying he was not going to commission any further architectural drawings until the outcome of that case and Baha Mar’s future became more certain.

“It’s more a tragedy for the Bahamian people,” Mr Issa told Tribune Business of Baha Mar’s problems, adding that his own resort had adopted “a wait and see” approach with its own plans.

“It’s sort of in limbo from that point of view,” Mr Issa continued. “The delays in that [Baha Mar] being finished, and the delays in opening, are cost additional jobs because it delays our planned expansion.

“The loss of profits from the delay - from when our plans were passed - is substantial, and it’s uncertain.”

Mr Issa said SuperClubs Breezes needed to expand its room inventory in a bid to create “economies of scale”, and offset the high operating cost environment in the Bahamas.

Yet with Baha Mar’s slump into Chapter 11 bankruptcy protection having added to the uncertainty surrounding the resort’s long-held plans, Mr Issa said he would “not spend more on architects’ drawings” until the dispute over the land transfers was resolved.

Disclosing that SuperClubs Breezes’ initial plans had received all the necessary permits and approvals, Mr Issa told Tribune Business: “We’re going to have to tear them up and plan again.

“I’m not going to take a risk spending a pile of money, and then finding those plans are out of date. It’s really a shame, because that’s 200-300 [permanent jobs], and doesn’t include the people who would be employed in construction.”

The SuperClubs Breezes owner told Tribune Business that he was in a strong position over the land transfer agreement “regardless of who ends up as the owner and the financier” of Baha Mar, because he still holds the freehold title to some of the land on which the Grand Hyatt property sits.

He added that it was “quite interesting” that Baha Mar had admitted, in court documents, that it still owed the Government some $1.25 million in Stamp Duty due on land transfers to SuperClubs Breezes.

Mr Issa said the further delay in Baha Mar’s opening was also “disappointing” for SuperClubs Breezes because its guests would not enjoy the added attraction of having a top-class casino next door, while airlift into New Providence would not ramp up as expected.

“It’s really unfortunate that we have a construction site next door, rather than a bright, shiny hotel, brands and casino,” he added.

Mr Issa likened the situation to a retailer with the “nicest shop on Bay Street”, who opened to find all the other retailers around him had closed down. Another comparison he drew was with a restaurant that found itself the only operator in Mall at Marathon’s food court.

The SuperClubs Breezes owner suggested that Baha Mar’s opening, whenever it occurred, would be less dynamic than expected as the global travel industry would hold off on selling it due to having been “burnt twice” by missed openings.

“It will probably have a slow start until it opens,” Mr Issa said, “because the travel industry won’t start selling flights and sales before opening because they’ve been burnt a couple of times. They’ll rather wait until the doors open, and then start selling.”