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‘Ridiculous’ Banks Delay $4m Stuart Cove’S Plan

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The principal of Stuart Cove’s Dive Bahamas yesterday blasted “ridiculous” bank lending attitudes for delaying his firm’s $4m Coral Harbour relocation ahead of his landlord’s anticipated sale.

Stuart Cove revealed to Tribune Business he had wanted to move last Christmas from his present South Ocean site to a three-acre property he has already acquired, but was “messed up” by the reluctance of Bahamas-based banks to provide the necessary credit.

Disclosing that they had financed the property’s purchase, Mr Cove said he was at a loss to explain their unwillingness to aid renovation plans that include converting it into a “dive lodge” similar to the bonefishing lodge concept found throughout the Family Islands.

Questioning why lenders would take such a stance given his “perfect track record”, and the fact they are “full of money” with over $1.5bn in excess liquidity, he added that he likely had no choice but to now seek out foreign funding sources.

Mr Cove explained that his desire to move was being driven by a combination of wanting to escape the “exorbitant rent” he is paying at South Ocean and to get ahead of the likelihood that the 363-acre property may soon be sold to new developers.

Multiple Tribune Business sources, speaking on condition of anonymity, this week said Albany’s developers were again exploring options for a deal to acquire a resort property that has experienced numerous near misses and false starts on efforts to re-open it since South Ocean was closed in 2004.

“I’m planning on moving again and am just waiting for financing,” Mr Cove told Tribune Business of his world-renowned dive operation. “I’ve secured the property at Coral Harbour in anticipation of a sale.

“I just can’t get anything out of the banks. They lent me the money to secure the property, but have not given me the money to build. It’s a big piece of land with a big condo building on that we’re going to renovate.

“I had hoped to move at Christmas last year, but the financing messed me up. I’d move right away, but I need to build the facilities. I’ve got the property and all the permits, the zoning changes. All the groundwork is done,” he added.

“Right now all of it is work to pay rent and pay taxes. I’m tired of paying the exorbitant rent they charge me [at South Ocean]. That’s another reason I want to move. Then I will have something to sell for retirement. I will probably be in the business for another 20-30 years.”

Mr Cove said Stuart Cove’s Dive had also qualified for tax breaks and incentives available under the Hotels Encouragement Act, “so I don’t have to pay tax on the goods we’re using for building, and don’t have to pay real property tax for 20 years.

“We’ve been approved for that,” he added, “and had the property rezoned as commercial permanently, with the previous multi-family use expunged from the record. I think we could build in three months - a swimming pool, docks, bulkheads, 16 hotel rooms in the building. We will have a dive lodge, as well as a dive shop, and a restaurant and bar, which we have the licence for.

“We just need some money and we’re ready to go. I have everything in place. The banks are ridiculous. They’re full of money, and the newspapers say they are ready to lend. I’ve got a perfect track record but they’re doing me bad, so I have to go foreign.”

Giving more detail on his investment plans, Mr Cove told Tribune Business: “We’re looking at a phase one total of $2m, and looking at buying a property across the road to build cottage for people to stay. That will be another couple of million.

“Right now I just need phase one - the docks, swimming pool, bulkhead, landscaping. It’s about three acres on the north side of the road on the canal, after you turn to the Defence Force where the dive shops used to be.”

Mr Cove said he had heard “nothing formal” about a potential sale or redevelopment of South Ocean, which continues to be owned by the Canadian Commercial Workers Industry Pension Plan (CCWIPP). The fund took over ownership of the 363-acre property around two decades ago after developer Ron Kelly defaulted on loans he had borrowed from it.

However, multiple sources this week confirmed that there is renewed activity and interest in South Ocean. They suggested it was being led by Albany’s developers, who include the Tavistock Group, the vehicle for investments by Lyford Cay-based billionaire, Joe Lewis, and world-renowned golfers Tiger Woods and Ernie Els.

Albany’s developers have been involved in bids or joint ventures to acquire South Ocean, the last available parcel of land for mega resort development on New Providence, at least twice before. However, their last attempt was defeated when CCWIPP elected to go with an offer from controversial Lyford Cay resident and Austrian financier, Dr Mirko Kovats, which ultimately failed to seal a deal.

Albany’s continued interest in South Ocean’s fate remains obvious, though, not least because the two sites are next-door neighbours, and the former will want to ensure that whatever development takes place there matches the high-end luxury standards it has set.

Given that it has been closed for 15 years, South Ocean’s remaining value largely rests with its latent casino licence, which kicks in once the property reaches a certain number of rooms. Its golf course, too, was rated as the best in New Providence by many golfers.

“The value of my property is the canal entrance. They’ve already dug into the bedrock,” Mr Cove told Tribune Business. “They could go through my property, open up the canal and make a large marina. It makes sense for Albany to do it.

“I was looking to move because I knew they were going to sell the property. I wanted to be proactive, which will hopefully pay off, and the canal entrance is worth its weight in gold.”

Comments

Economist 7 months, 4 weeks ago

"Emmmm.......Cove has been in business for over 40 years.......we can't lend to him....he has a worldwide reputation......no, definitely can't lend to him........movie stars and other movie makers use him.....no, looks like he is a good stable business....yup, we don't lend any money in The Bahamas these days.......we just love to keep the economy in a bad state so that we can complain about the country.....don't look to us conduct our business professionally and act as we should..... don't worry the dumb Central Bank of The Bahamas won't say boo.... they don't care about doing their jobs as long as they get paid.....they are not accountable for their actions...so neither are are any of us banks."

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bogart 7 months, 4 weeks ago

Weeeeeellllll..............did you ...state to yer banker....ya is investin in da site fer ya business to cut expenses...improve cash flow....synergies fer growth......an ya was ....er suggested....that dey unable to finance further....like lending enabling yer ...to gets like taxi to generate fares to repay loan....but ya gats da taxi widdout wheels....??????....Ya project needs to be further laid out to see options answers...YA BANKER NEEDNT TO HAV YA IN DIS POSITION.......BUT......WHAT ELSE ABOUT THE SMALL MAN....SOME 4,000 MORTGAGE DEFAULTS.....TYING UP BILLIONS OF COLLAYERAL....BILLION DOLLAR BANK MONEY TIED UP IN BAD LOANS....PROVISIONING MONEY SET SIDE FOR BAD ONES.....MIND YOU BANKS ALWAYS GETS JUDGMENTS....A TYPE CLIENTS..DEFAULTED CUSTOMERS HAV BAD CREDITS...stagnating economy....reduced construction....repairmen...painters....many persons jus give up has no due care an attention...even negligence....but pore people jus walks away KUDOS TO MR.COVE FOR STANDING AN ASKING QUESTIONS.....!!!!!!!!!!!!! SUGGESTION .....why not seek legal advice in having....bypassing banks...private.....creating ...your...situation wid...variable interest not fixed +/- to prime...amortizing...accelerated....balloon repayment..savings to ya growth to ya....ought to be legal emtities to advise....etcetc...i is only one d grade educated jonser and anyone need not basing ya financials ........

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Clamshell 7 months, 4 weeks ago

Yes, makes perfect sense ... why lend money to a successful businessman when instead you can lend it to a bunch of political cronies who have no intent of ever paying you back? Yes ... that makes perfect sense.

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BahamaPundit 7 months, 4 weeks ago

I went through the same thing. Never missed a mortgage payment on my first home -- perfect customer. At first they gave me the green light, so I paid $500 for a property appraisal etc. I met with the bank multiple times. They assured me everything was great. I had 45K cash to put down on the inexpensive property (it was a little over 200K). Then, bam, they informed me that they can't lend for a second home, because I was self employed. I needed a letter from my employer for "Canada" to approve the deal. I asked them why they couldn't tell me that in the first place. Terrible experience!!! I realized that unless you are rich and don't need the money, they won't lend to you!!!!

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bogart 7 months, 4 weeks ago

..............because I (you) was self employed....they had you ...needed a letter from my (you) employer .....to approve the deal...........

Some so many experiences.....these bankers are hired as qualified accountants..bankers..BUT...are almost all mandated to be ...salespersons....to sell loans to met targets or else dont gets favourable...salary increase....Dont want to start with problems during construction loans....

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gbgal 7 months, 4 weeks ago

Yep! We all have similar experiences...More than a million dollars in assets for a 300K loan and bank won't play ball! Why are they here? Just to count their dollars??

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BahamaPundit 7 months, 4 weeks ago

So many investments ruined by Canadian banks not letting legit Bahamian borrowers access capital. What a travesty! The property would now be worth twice the value. Generations of Bahamian middle-class wealth are being eroded and ruined and nobody is standing up for us. Yet, we read about American borrowers getting zero interest loans to buy properties. We are not magicians! We cannot grow the economy without capital! We are all grouped with the "deadbeat" Bahamians with bad debts. So unfair!

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Chucky 7 months, 4 weeks ago

you forget that one of the main rolls a bank plays is to keep people from succeeding.

they are part of the system that wants to keep people down.

who do you think the majority shareholder are; let me tell you, controlling interest in all banks is held ny the rich weathy investors. they dont want you to succeed

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concernedcitizen 7 months, 4 weeks ago

Banks are not charities , they have vast experience at lending according for someones ability to pay back the loan .They already lent him the money to buy the property perhaps they think that's all the debt his business can carry . He wants two million more , they don,t think he can carry or repay that much debt .He may have to find investors or do the build out in smaller steps .Only BOB used to loan out money w no expectation of being paid back to friends and cronies and then we the taxpayer would keep BOB solvent

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proudloudandfnm 7 months, 4 weeks ago

Hire a PLP and send him or her to BOB.... You don't need a loan, they'll give you an unlimited overdraft...

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