• First Wendy’s/Marco’s.... now KFC and Burger King
• Atlantis accused of ‘illegal’ restriction of competition
• Covenant elimination sat at Planning for 16 months
By NEIL HARTNELL
Tribune Business Editor
Paradise Island is bracing for a new fast-food battle with plans to establish Kentucky Fried Chicken (KFC) and Burger King outlets set to potentially double the number of such brands to four.
Fresh from the recent fight over Wendy’s and Marco’s Pizza, The Bahamas’ top tourist destination is almost certain to become embroiled in renewed conflict over the bid to lease spaces in the Paradise Village Shopping Centre to the two rival labels.
Jordan Developments Ltd, the shopping centre’s owner, is due to appear before the Town Planning Committee on November 27 to argue its case for why a so-called “restrictive covenant” that Atlantis is using to block KFC and Burger King should be extinguished.
The existing restriction allows the Paradise Island mega resort to bar “a restaurant” from operating at the Shopping Centre, which is located across the road opposite its Marina Village destination on Casino Drive, and also next to the former Scotiabank branch where Wendy’s and Marco’s Pizza recently - amid relentless opposition from Atlantis and other resorts - gained site plan approval for their restaurant.
Atlantis has already made it abundantly clear, both to Jordan Developments and Restaurants (Bahamas), the KFC and Burger King franchisee, that it will not give permission for the two fast-food brands to locate across the road from its facilities so the shopping centre owner is now asking the Town Planning Committee to use its lawful powers to “nullify” the restrictive covenant.
While the timing of Jordan Developments’ application may suggest it is seeking to ‘piggy back’ on the precedent created by the Committee’s Wendy’s/Marco’s Pizza approval, documents obtained by Tribune Business from the relevant file suggest this is somewhat coincidental.
The application on the Paradise Village Shopping Centre’s behalf was initially submitted on May 19, 2022, but sat with the planning authorities for almost 16 months before being addressed. Charles Zonicle, the Department of Physical Planning’s director, in a September 15, 2023, e-mail gave a “humble apology for the inordinate delay” and said it was because the file “was not brought to the attention of a senior officer”.
The Wendy’s/Marco’s Pizza and KFC/Burger King applications are also not exact matches. While all restrictive covenants limiting the types of development at the former Scotiabank branch site had expired, they remain in place at the shopping centre, and thus on the surface appear to give Atlantis and its fellow Paradise Island resorts a much stronger argument for why the latter two brands should not be facilitated.
Neither Atlantis nor the Paradise Island Tourism Development Association (PITDA), both of which were extremely vocal in the campaign to block Wendy’s and Marco’s Pizza, responded to requests for comment on the KFC/Burger King situation before press time last night. PITDA also represents the likes of Comfort Suites, the Ocean Club and Paradise Landing (the former Hurricane Hole).
Documents seen by Tribune Business show Restaurants (Bahamas), part of the group headed by the late George Myers, was refused permission to become tenants in the shopping centre by Atlantis on April 21, 2022.
In response, Obi Pindling, son of Sir Lynden and Jordan Developments’ attorney, wrote to Audrey Oswell, Atlantis’ president and managing director, four days later accusing the mega resort of seeking to “restrict competition” for its Marina Village restaurants, which include outlets such as Cafe Martinique, Carmine’s, Seattle Steakhouse, Frankie Gone Bananas and the Village Burger Shack.
“Our clients had been contacted by Restaurant (Bahamas) seeking to rent shop spaces to operate two of their franchises, Burger King and KFC, therein,” Mr Pindling wrote to Ms Oswell. “Our clients have been advised that the said Restaurants (Bahamas) had written to yourselves seeking permission to operate the said franchises but, by letter dated April 21, 2022, your company denied their request.”
Jordan Developments acquired the land upon which it constructed the Paradise Village Shopping Centre on April 30, 1979, from Paradise Island Ltd - one of Atlantis’ predecessor companies. Mr Pindling acknowledged the existence of a covenant that restrictions “restaurant” operations at the site, although Anthony’s Seafood & Ribs and a Dunkin’ Donuts outlet are already present in the shopping centre.
Pointing out that Jordan Developments has “strictly complied” with the restrictions to-date, Mr Pindling added: “Our client is of the view that you denial of Restaurants (Bahamas) request is unfair, unreasonable and unsustainable as its primary objective was to restrict competition for the restaurant facilities in Marina Village and, indeed, your resort as a whole.”
While the original restrictive covenant “may possibly have had some practicality” when introduced in 1979, Mr Pindling argued that “circumstances have radically changed since that time”. These included the “vast expansion” of Atlantis’ facilities, such as the Marina Village, with its multiple restaurants across the street from the proposed KFC and Burger King locations.
“Your denial of Restaurant (Bahamas) request seems to very strongly suggest that your company wishes to be the only entity to have and operate restaurants in the immediate vicinity,” Mr Pindling asserted. “In a world of free enterprise, our client believes that your company’s position is wholly untenable and, indeed, illegal.”
He duly warned Atlantis that Jordan Developments would request that the Town Planning Committee exercise its powers, under the Planning and Subdivisions Act’s section 25 (3) (c) to “extinguish” the offending covenant “on the ground that its purpose.... is primarily for the restriction of competition”.
Christina Davis-Justin, a Graham, Thompson & Company attorney, responded on Atlantis’ behalf on May 9, 2022, by warning that the mega resort will oppose any attempt to eliminate the restrictive covenant, thereby setting the stage for a November 27 showdown before the Town Planning Committee.
She confirmed that Restaurant (Bahamas) lease requests for KFC and Burger King were denied by her client, but rejected Mr Pindling’s assertion that this position was unfair and done primarily to stifle competition for Atlantis’ own restaurants.
“We emphatically state that there is a plethora of precedence in common law jurisdictions which uphold restrictive covenants prohibiting particular businesses/trades on land, which seemingly exist partly or wholly to prevent competition. Therefore, in our view this position is untenable,” Mrs Davis-Justin wrote.
She added that a key consideration for the Town Planning Committee, in determining whether to eliminate a restrictive covenant, is if “the character of the neighbourhood has substantially changed”. This, Mrs Davis-Justin argued, was not the case with Paradise Island and the shopping centre.
“The operation of Marina Village has not resulted in so complete a change in the character of the area to render the relevant covenant valueless,” she said. “Quite contrarily, it is the existence of the covenant which has preserved the character of the area over the years, and it remains relevant and useful at present.
“Furthermore, the ‘expansions’ to which you refer have not introduced any commercial activities which were not existing on the premises at the date of the conveyance. In the premises, we maintain that Atlantis Holdings (Bahamas) denial is not unreasonable or illegal.... The present commercial conditions in the area have not substantially changed so as to render the covenants valueless.”
This prompted Mr Pindling, on May 19, 2022, to write to Mr Zonicle requesting that the Town Planning Committee eliminate the offending covenant. “Our clients do not support, or agree with, the arguments put forth or the position taken by Atlantis’ attorneys in their letter,” he added. “Our client believes the facts and circumstances of this matter clearly and very loudly speak for themselves.”
Yet it took more than a year for Physical Planning to move the application forward. Mr Zonicle, belatedly acknowledging Mr Pindling’s letter, wrote in a September 15, 2023, e-mail: “Unfortunately the file was not brought to the attention of any senior officer and no action was taken on the same. Please accept my humble apology for the inordinate delay in communication.”
The Town Planning Committee agreed at its October 24, 2023, meeting to defer a decision on the covenant elimination and hold a public hearing so that all sides can voice their opinions. Besides Anthony’s and Dunkin’ Donuts, the 1.083-acre shopping centre also includes Bristol Wines & Spirits and two gaming houses, Island Luck and FML, among its existing tenants.
Besides restaurants, other types of business that are presently blocked at that location - at the junction of Casino and Paradise Island Drives - by the restrictive covenants include banks, hotels, guest and boarding houses, casinos, nightclubs, a real estate office, car repair shops and fuel distribution.
The beneficial ownership of Jordan Developments and the Paradise Village Shopping Centre was not disclosed in the Town Planning file. Several sources yesterday suggested that the late Mr Myers also had an ownership interest in the shopping centre, but this could not be confirmed before press time.
The opposition to KFC and Burger King from Atlantis, PITDA and other Paradise Island-based resorts is likely to be just as fierce as that encountered by Wendy’s and Marco’s Pizza, with assertions that fast-food brands are not the right fit with the destination’s upmarket image and will devalue it just as the likes of Four Seasons are considering new investment projects.
The timing also coincides with reports that Atlantis owner, Brookfield Asset Management, is again mulling whether to launch a formal sales process to seek a buyer for the mega resort.