The Tribune

By YOURI KEMP and NEIL HARTNELL

Tribune Business Reporters

A developer yesterday disclosed it is seeking to develop a “bigger and more exclusive” version of Baker’s Bay on 10,000 acres of San Salvador land through a $1bn investment over the next five years.

Simon Tolan, development director for New World Developments, told Tribune Business the project is ready to begin construction in the 2023 third quarter if it obtains all the necessary government approvals after partnering with Emmanuel Alexiou, the Bahamian founder of Sunco Builders, who owns much of the required land.

“We’re starting in he third quarter of this year and we’re going to be building ten hotels, a golf course, a sports academy and sort of like a Baker’s Bay, but just bigger and more exclusive,” he said. “This project is going to be done in phases, but it’s a $500m to $1bn spend over the next five years.

“The first phase is going to be about $100m at least, and we will start immediately. We were on the island earlier in the week with Drew Brees (former NFL quarterback), and he’s basically one of the shareholders in New World Developments. We visited there and we flew in on his private jet, and we actually met with the local commissioners on the island. We’re aiming to meet with the Prime Minister formally.”

The proposed development would be located in Philip Davis KC’s constituency. New World Developments’ website says it has teamed with a seemingly impressive list of resort brand names and other partners, although - as ever - obtaining the necessary financing will be critical to making its ambitions a reality.

Specific details on financing sources were not provided, although the project’s principals and management team were billed as having been involve in “billions of dollars worth of developments as well as over 200 years of experience in hospitality, development, real estate, finance, management and planning and design”.

The website said multiple high-end resort brands have signed Letters of Intent (LOIs) and term sheets with New World Developments, including Rosewood, Six Senses, Waldorf Astoria (Hilton), Ritz Carlton (Marriott), Kempinski Regent, Banyan Tree, Am Resorts and Dream Hotel Group. However, Letters of Intent are not final binding agreements.

Other named partners include Berkshire Hathaway Home Services, the US real estate brokerage, and Wheels Up, a private jet charter company once 26 percent owned by Delta Airlines but is now a public company in its own right. New World Developments says a key objective is “to create a world-class sports academy and wellness facility on San Salvador”.

Besides Mr Brees, the ex-New Orleans Saints quarterback, the developer said another “sponsor” of its goal to attract sports teams and athletes from around the world to San Salvador is Michigan Wolverines coach, Jim Harbaugh.

Many Bahamians, though, will likely be sceptical of New World Developments’ intentions and prospects of success given the mixed history, at best, of large resort projects in the Family Islands. The sheer scale of investment required to build out the necessary infrastructure to support multiple hotels will make it challenging to generate a return on investment, while the local labour pool is often insufficient to meet construction and full-time operational needs.

Importing labour, both from elsewhere in The Bahamas and abroad, brings with it housing and social issues. And, by their very nature, large-scale resort projects often end up changing the character of the Family Island locations that host them, changing the very environment that attracted them in the first place.

However, Mr Alexiou yesterday confirmed that the New World Developments project - in which he himself is a 10 percent shareholder of the company - is for real. “They are in the process of getting the final approval from government to start soon,” he said. “It will probably be announced a little later on, but it’s been a long way in the making and it is almost coming to fruition right now.”

Mr Alexiou’s local knowledge, and experience of construction in the Family Islands, will likely be leaned on heavily by the project. “One of our equity partners owns the Abaco Beach Resort & Marina in Abaco, built the Club Med Resort on San Salvador as well as other luxury resorts throughout The Bahamas,” New World Developments website said in an obvious reference to him.

The developer also has an added advantage in that Mr Alexiou already owns most, if not all, the 12 land parcels earmarked for inclusion in New World Developments’ design. Dr Hubert Minnis, the former prime minister, and real estate contacts all confirmed that the Sunco founder possesses substantial land holdings on San Salvador.

Dr Minnis yesterday confirmed that New World Developments had initially approached his administration with its San Salvador plans in late January 2021, indicating the concept has been around for several years. While his administration reacted favourably to the proposal, the Killarney MP said the group never came back after being asked to complete and produce a master plan of its project.

“They would have met with us on Wednesday, January 27, 2021,” Dr Minnis told this newspaper. “They wanted to do a five-star luxury resort and two very high-end, low density resorts. They said they had brought planners and environmental consultants to the island already, and had looked and done some preliminary sketches. They had their financial consultant and financial commitments for all stages.

“They wanted to come in to talk and see whether there would be any obstacles, and what they would have to do so that once they started they would continue to roll. They wanted to know the environmental impact assessment (EIA) they would have to do to. We directed them in what they had to do, and they were supposed to get back to us with a master plan. That was the last we heard.”

Suggesting that the then-ongoing COVID-19 pandemic may have delayed New World Developments’ plans, Dr Minnis reiterated: “We told them we like the project, but they had to complete a master plan so we could have the environmental, Ministry of Works, and all the different entities” assess it.

Speaking to Mr Alexiou, the former prime minister said: “I know he has a lot of land [on San Salvador]. I’d asked the question as to what he was doing with this land, and he was talking about development. He came with a group from Europe. We discussed it and thought they would take it forward from there. That was the last time and they never came back.”

A 26-page ‘Business plan and Investments Board application’ summary, dating from September 2021, values the 12 land parcels - most of which are located in north and central San Salvador - at a combined $141.474m. They range in size from 4,161 acres to 128 acres, but only one was said at that time to have obtained the necessary planning permission “in principle”.

“New World Developments has an option on 10,000 acres of land on the beautiful island of San Salvador, Bahamas, divided across 12 large land parcels/sites,” the business plan said. “Currently we have over $140m in land holdings. This is before the substantial uplift is further recognised in values that come from full entitlements.

“At this point in the process, we have planning permission in principle. We have met with the Prime Minister’s office on January 27, 2021, and they are very excited about the plans. So much, that they have urged us to get our application in as soon as possible.”

Providing further details on the project’s proposed structure, the business plan adds: “The opportunity for New World Developments to develop on San Salvador is the result of the long-term relationship and friendship of Robert Fitzpatrick, a very successful businessman, and Emmanuel Alexiou (Manny), one of the largest private landowners in The Bahamas....

“An agreement has been structured between Robert Fitzpatrick and Emmanuel “Manny” Alexiou whereby New World Developments will have first option to purchase and develop all remaining plots of land owned by Mr Alexiou on San Salvador. The agreement terms include a 75 percent discount on the pre-approval land values and a 5 percent carried interest to Mr Alexiou on each new Special Purpose Vehicle (SPV) created for each of these sites.

“Furthermore, Mr Alexiou’s position on the Board of Directors will strengthen the management team moving forward. If New World Developments decides to not pursue any options on any further sites and the parcels of land are sold, then New World Developments will be awarded 25 percent of the price paid.”

Mr Fitzpatrick and Mr Alexiou are the project’s co-chairs, with the former also acting as president. However, the New World Developments website provides no biographical details for Mr Fitzpatrick or other principals and management despite providing links to such information.

The business plan, meanwhile, pledges that the project will create 1,500 permanent jobs for Bahamians while also unlocking $4bn worth of real estate value. “The initial plan is to develop two parcels, which total just less than 2,500 acres,” the document said.

“The first two sites will have ten hotels, a minimum 500 branded residences. On top of the branded residential, we will be selling up to one acre lots which will be selling for $1m and upwards. Clients will secure their $1m deposit on the land and then pay in stages over the duration of their house build. We envision that, on an $8m purchase (conservative figure), we will look to receive approximately $5m profit.”