The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A developer suing the Bahamas government for $3bn is moving forward with other projects despite the volatility surrounding his interests.

Dr Mirko Kovats is not planning on selling any of his Bahamas-based properties amid his $3bn lawsuit against the government - while there have been claims of vendors not being paid.

Dr Wolfgang Groeger, speaking on behalf of the Kovats family office, told Tribune Business they would “like to set the records straight" on some of the misunderstandings about their interests in The Bahamas.

He said with regard to the Treasure Cay vendors and acquisition of property: “Mr Charles Nafie (the architect for the project) has been paid 100 percent and exactly as per agreement.”

Dr Groeger was responding to complaints from a vendor who was employed by Charles J Nafie Architecture and Design he had not been paid for renderings he did.

Dr Groeger added: “You seem to confuse payments due by Mr Nafie to his subcontractor with payments due by Dr Kovats to Mr Nafie which even have been paid weeks before having been due following Mr Nafie’s begging for early prepayment.”

However, in emails seen by The Tribune, the architect asserted that the payments had been made.

Dr Groeger also said: “The Treasure Cay development is held up by undue government interference into a ‘private commercial transaction’.

“It is the government of The Bahamas' full responsibility for all damages done to The Bahamas, especially North and Central Abaco stakeholders, including local employment and investors. You should be aware of the judicial review filed, quoting damages of precisely $3,127,157,550.00 eventually due.

“Bondholders have been made aware of this contingent sovereign debt risk. US court filings will result in more interesting disclosures.”

Turning to another property currently under scrutiny, the South Ocean property that was alleged to have been permanently stalled, Dr Groeger noted that “seven to 10 years, and after hearing several witness testimonials under oath, there might be a final judgement, at least more disclosure of special interest.

“Please be aware of the fact that the 2013 development profit assumptions outlined in the CBRE Information Memorandum presented by order of the vendors CCIWPP (Canadian Commercial Industrial Workers Pension Plan) will be much higher as per 2022 or even 2023, not lower…”

He continued: “2022 real estate prices in New Providence have skyrocketed by 30 percent, even in Sandyport which by no means is comparable to Albany, South Ocean and other upscale developments.

“Albany West could generate around $500,000,000 developer profit for Albany/Joe Lewis/CCIWPP, thus strongly supporting our damages calculation.

“We simply took as a basis of our damages claim the excellent and professional CBRE information memorandum, consisting of the development of three hotels, including one condo hotel, condos, golf course residences, marina, golf course, commercial marina village, staff quarters, employing thousands of Bahamians once fully operational.

“Quite different from Albany West a sleepy condo and land subdivision project with the only goal to generate hundreds of millions of quick cash.”

With regard to the equally controversial “The View at Love Beach,” project, Dr Groeger said: “We are in the process of ‘modernising’ the overall design of the development, working with a successful Miami developer to become more ‘contemporary South Florida’ style.

“Current volatility of skyrocketing prices and unreliable construction materials supplies and costs, as well as financing costs deterring prospective buyers result in us monitoring the 2023 developments.

“While being in the design development phase, construction commencement will be decided by the markets.”

Despite the challenges facing these respective projects, Dr Kovats does not plan to sell any of its properties in The Bahamas and plans to “develop all properties including Treasure Cay and South Ocean at the appropriate time".

“We are here to stay,” Dr Groeger said. “We strongly believe in The Bahamas' potential, being aware of considerable improvement potentials which we expect to come one way or the other.

“We are uncorrupt and unpolitical which naturally makes matters more challenging.

“Funding of any project is not an issue, however may depend on findings of background ‘vetting’ of certain actors.

“We believe 2023 - the year of 50 years anniversary of independence will be a wonderful ‘New Day’ for our beautiful Bahamas and their wonderful people.”