David Kosoy’s Sterling Global Financial is in negotiations to acquire Paradise Island’s Hurricane Hole property from Atlantis’s owner, Tribune Business can reveal.
Multiple sources familiar with developments have confirmed that the acquisitive real estate financier and developer, based on East Bay Street, is moving to purchase the near-13 acre site adjacent to the Paradise Island police station and ‘off-bridge’.
Mr Kosoy declined to comment when contacted about the potential deal by Tribune Business, saying: “I can’t say a thing. Maybe you should call whoever owns it. “The truth is as soon as I can talk you’ll be the first guy to know.”
Mr Kosoy’s comments indicate the purchase has yet to close, although multiple contacts suggested to this newspaper that a sales agreement was likely signed and price agreed, along with deposit paid.
One contact, speaking on condition of anonymity, suggested that Sterling’s planned redevelopment of Hurricane Hole would represent “a major revitalisation of the Paradise Island product” should the deal proceed.
“When they redo it, it will be completely redeveloped with everything; condos, retail and restaurants,” the source said. “It will be a major revitalisation of the Paradise Island product. It will be the biggest thing on Paradise Island, I guess, since the Atlantis Phase III development with the Cove and the Reef.”
Another contact told Tribune Business that Mr Kosoy and Sterling were “trying to buy Hurricane Hole and do a big development there”, while another added: “I’ve heard they paid top dollar.
“It’s a superb piece of property; it’s a great little destination,” they continued. “It has great potential, and is a beautiful little piece of real estate. It will be good for the Bahamas if it comes off. We need a shot in the arm. We need new inventory.”
The Hurricane Hole property was acquired by Atlantis’s former owner, Kerzner International, in the mid-2000s with a view to redeveloping the site in a mix of high-end condominiums, retail options and restaurants. Kerzner International demolished the existing retail plaza and most of the condominiums surrounding the marina, bar the Dockmaster’s House and small bar that remain.
However, its plans were halted and then ‘mothballed’ by the 2007-2008 ‘credit crunch’ and subsequent recession, which placed pressure on Kerzner International’s own finances such that it was unable to repay over $2 billion in debt owed to its creditors.
This ultimately resulted in the ‘debt for equity’ swap that saw Brookfield Asset Management initially take over ownership of the Atlantis and One & Only Ocean Club resorts.
Kerzner International retained ownership of Hurricane Hole, and placed it on the market with a $29.5 million sales price in mid-2012. The property, though, was pulled off the market one year later and traded to Brookfield’s Hospitality arm as part of a real estate asset swap between itself and Kerzner International.
Mr Kosoy’s plans likely mirror Kerzner International’s ambitions for the site, and will probably involve upgrading the existing marina and its 90 dock slips. The marina by itself is a valuable asset, given the direct access it provides to Nassau Harbour, with few waterfront sites remaining on Paradise Island - especially with such a strategic location.
Hurricane Hole is already able to berth mega yachts, and has 1,600 feet of water frontage. The dock masters’ office provides showers and a pool for marina guests, but apart from that Sterling and Mr Kosoy have a ‘blank canvas’ from which to undertake a major high-end real estate development.
Mr Kosoy, who is understood to have a residence on Paradise Island, has already developed and financed several real estate projects in that location, including Jason Kinsale’s (Aristo Development’s) THIRTY SIX and his own Beach House Villas project on the western side.
Sterling, which has its legacy in real estate development financing, is now thought to be expanding into projects of its own, with Hurricane Hole’s redevelopment among those leading the way.
“They’ve got some interesting project plans,” one source said of Sterling. “The company is in big expansion mode to build developments itself. It’s going to do a lot more in the resort area.”
Other Bahamas-based real estate projects that Sterling has either financed or is involved with include ONE Cable Beach; Courtyard by Marriott in downtown Nassau; Ocean Terraces on West Bay Street; Matt Lowe’s Cay in Abaco; and Sky Beach Estates, Eleuthera.