The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Hedge fund billionaire, Louis Bacon, offered the then-Ingraham administration $15 million for a property deal that he billed as a solution to the “controversial” Clifton Cay development.

Documents filed in the New York Sate Supreme Court on Friday as part of Mr Bacon’s ongoing legal battle with his Lyford Cay neighbour, Peter Nygard, reveal that the Moore Capital Management chief was involved in at least two proposals to acquire land at Clifton at the turn of the century.

A March 30, 1999, letter sent to Teresa Butler, Mr Ingraham’s then-permanent secretary in the Prime Minister’s Office, disclosed that Mr Bacon was part of a group of Lyford Cay residents offering to acquire property at Clifton Cay that was owned by the Nancy Oakes estate.

And, on June 30, 2000, Mr Bacon himself wrote to Mr Ingraham directly, offering to purchase 208 acres owned by the Government at Clifton Point.

The hedge fund magnate described this as “a positive solution to this controversial issue” - a reference to the highly-charged debate and opposition to the Clifton Cay project. Mr Bacon suggested his offer would “satisfy all sides”.

The details of Mr Bacon’s private efforts to intercede in the Clifton Cay dispute have never been made public until now, and it is unclear why he has chosen to file these letters in the New York courts.

It is likely to be an attempt to show his close Bahamas ties, and further buttress his environmental and philanthropic credentials, which have been challenged during the legal battle with Mr Nygard.

The two letters in question were written over the controversy surrounding the proposal by a consortium featuring the US-based investors, Chaffin/Light Associates and a Bechtel Corporation-related entity, to develop a 600-unit, $400 million gated community at Clifton.

Environmental and heritage activists feared the project would destroy sites of archaeological and historical significance, such as a former slave plantation, and successfully united via the Coalition to Save Clifton to defeat both the developers and the then-government. The site is now the Clifton National Heritage Park.

Mr Bacon’s role in the fight has been attacked by Mr Nygard and his supporters, but the letters suggest he was certainly involved ‘behind the scenes’.

The first letter, written by Lyford Cay resident Kris Lehmkuhl, reveals that he, Mr Bacon and Antonio Braga were willing to acquire the Clifton Cay property owned by the late Nancy Oakes’s estate. This was the same property that would have been used for the Bechtel/Chaffin project.

Mr Bacon and his fellow Lyford Cay residents wanted “to preserve the natural setting of the bay”.

They offered to create “a protected national park” covering 150 acres, including Clifton Cay’s northern shore, while the remaining 100 acres - on the cay’s southern shore, and on the north side of the cliffs - featuring a “low density residential development”.

A shallow canal, separating the two developments, would have catered to boat owners, the letter reveals. The remaining 300 acres would have been left undeveloped until the park and residential area were operational, so its best usage could have been determined.

After this proposal seemingly went nowhere, Mr Bacon himself wrote to Mr Ingraham some 15 months later with a revised proposal of his own.

Referring to the Clifton Cay controversy, Mr Bacon told the then-prime minister: “In the interest of providing a positive solution to this controversial issue, this letter constitutes a formal proposal which may, in the end, satisfy all sides.

“I stand prepared to purchase the 208 acres owned by the Government at Clifton Point for $15 million.

“As an indication of the seriousness of this proposal, $15 million has been deposited with Citibank, Nassau. This money is unencumbered and available for immediate use, without restrictions. A director of Citibank is available to verify this if you so desire.”

Mr Bacon wrote that if his purchase went through, a National Park would be among the uses considered for the property.

Advice from archaeologists and environmentalists would have been sought, and the Government consulted, with a plan presented for the site’s development within 15 months.

The letters were released as part of extensive legal filings by Mr Bacon in the latest stage of his long-running defamation lawsuit against his Canadian fashion mogul neighbour.

Mr Bacon, in seeking to have the New York court ‘strike out’ Mr Nygard’s counterclaims and “scandalous allegations” against him, alleged: “Nygård has developed an unfounded belief that Mr Bacon is his nemesis, blaming Mr Bacon for problems of Nygard’s own making.

“In 1984, Nygård purchased his Bahamian compound, which he renamed Nygård Cay in 1992. Between 1984 and 2012, Nygard Cay mushroomed from 3.25 acres to 6.1 acres - all as a result of Nygård’s unlawful dredging of the seabed, sea-wall construction, and gabion installation.

“Nygard’s unauthorised expansion of the shoreline surrounding his compound both misappropriated Bahamian Crown Land and caused extensive physical damage to the marine environment, including widespread pollution and damage to 84,000 square meters of seafloor surrounding Lyford Cay.”

The filings added: “Nygård’s malice toward Mr Bacon irrationally appears to be driven by his frustration with court orders and other government actions preventing him from unlawfully expanding Nygård Cay.

“When Nygård applied for building permits from the Bahamian Government to reconstruct Nygård Cay following a November 11, 2009, fire, the Government denied his requests until he restored the shoreline to its original condition and further directed him to cease his environmentally degrading activities.

“Nygård, however, blames Mr Bacon, his environmentalist neighbour, for the Government’s actions. Nygard also blames Mr Bacon for the actions taken by Save the Bays. Save the Bays has pursued various Judicial Review lawsuits challenging the Government’s action with respect to environmentally damaging building activities at Nygard Cay.”

The filings added that Save the Bays had also initiated court actions against other Bahamas-based developments, as if to demonstrate it was not being controlled by Mr Bacon and acting at his behest.

No comment was received from Mr Nygard’s camp, despite Tribune Business reaching out to his public relations people.