The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Hurricane Hole’s developer is aiming to launch two further resort projects before year-end 2019 that will take total investment in its Bahamian developments to around $700m.

David Kosoy, Sterling Global Financial’s chairman, told Tribune Business it was targeting the “creation of over 1,000 jobs” between its Paradise Island development and similar upscale projects planned for Abaco’s Matt Lowe’s Cay and the Sky Beach Club in Eleuthera.

Confirming the Bahamas-headquartered developer’s ambitious plans, Mr Kosoy said Sterling’s Family Island projects would likely double the 500 permanent jobs created when Hurricane Hole is fully redeveloped by 2024.

“We hope to move those forward by the second quarter, and hope to be in the ground on Sky Beach in the third quarter,” he told this newspaper. “Matt Lowe’s, maybe the fourth quarter.

“I think that with what we have going on now with this [Hurricane Hole], and the others, we will be somewhere around $700m, and jobs created will be over 1,000. I think our first phase on Sky Beach will be around 40 rooms and 20 villas.”

Mr Kosoy said both Matt Lowe’s Cay and Sky Beach Club will feature high-end, boutique “four to five-star resorts” when completed. While he did not specify the five-star resort’s location, he added that the other would be “four-and-a-half-star with five-star service”.

The 50-acre Matt Lowe’s Cay was originally acquired by MLCSD Ltd in 2015 for construction of a high-end Aman Resort property, with 200 permanent jobs expected when operational. That development never proceeded, and is understood to have now been taken on by Mr Kosoy and Sterling.

Speaking following the official groundbreaking for the $250m Hurricane Hole redevelopment, the Sterling chairman told Tribune Business that investors were “lining up” to acquire both marina dock space and condo units even through the developer had yet to start officially marketing the project to potential purchasers.

“People are lining up to buy slips,” Mr Kosoy said. “We haven’t even called; people are calling us. We’ve got reservations from people wanting to buy slips, and we’ll probably sell no more than 1,000 feet initially. We have probably 40 reservations for condos, and have not gone to market yet because we don’t know the final pricing.”

He added that Sterling planned to make the existing 90-slip marina “25 percent bigger than it is” currently, extending dock space and length to a total 5,500 linear feet so that it can accommodate the larger 200-300 foot yachts that are increasingly in demand among the world’s wealthy.

“That’s what people are building today, and the marina is not set up for those boats today,” Mr Kosoy said. “We need to grab that market.” The revamp is intended to effectively give the 13-acre Hurricane Hole site a new marina, complete with floating docks, electrical power and other amenities sought after by the boating/yachting community.

Many marina dock owners will also likely become Hurricane Hole real estate purchasers, with the Sterling chairman reiterating his desire for the project to become the “city centre” for Paradise Island - what downtown Nassau is to New Providence.

“For this kind of live, work and play environment, where do you get it in the Caribbean? You don’t,” Mr Kosoy said of what he envisions for Hurricane Hole. “I want this to be a place people hang out - locals, Paradise Island residents, people from across the bridge, Atlantis customers.

“I want it to be a city centre. We could have put in way more density here, but I want this to be a place where people are strolling, you can have a concert and have more green space. I believe the parking will be lessened, and we will put in more open space. People will not be driving; in less than 10 years they will be in golf carts.”

Mr Kosoy revealed that Sterling had forged commercial alliances with both Atlantis and the Ocean Club Beach Club and Ocean Club Golf Course that are designed to both increase the development’s revenue streams and give it unique selling attractions with potential purchasers.

Besides providing more dining and retail options/experiences for Paradise Island resorts’ guests, the redeveloped Hurricane Hole has agreed deals where restaurant bills can be added to Atlantis room charges. And its condo buyers will be treated like Ocean Club members, with access to the exclusive property’s amenities at a much-reduced price.

“Ocean Club don’t have enough choices for their people, and they do not want to go off-island. There are not very many restaurants on the water,” Mr Kosoy added. “Atlantis has agreed to co-operate with us on room charges for the restaurants, which is good for them and good business for us.

“The other thing we have, which no one else has, is that anyone who buys a condo at our place is treated like a member of the Ocean Club. You will be a member of the beach club and the golf club; the only people outside the gates that can be members and at a price point that is substantially less. One Ocean couldn’t do it.

Sterling’s transformation of Hurricane Hole into a mixed-use residential, office and retail destination will create 3,000 construction jobs, at an average of 600 per year, over the five-year development phase that will last until 2024.

It acquired the site from Brookfield Asset Management, Atlantis’s owner, last year following negotiations that lasted nine months and held the groundbreaking - which marks the start of vertical construction - on Friday “a week ahead of schedule” after obtaining all the necessary planning and environmental permits from the Government.

The 13-acre Hurricane Hole site is one of the few remaining Paradise Island land parcels available for commercial real estate development, and its strategic location - on the Nassau harbourfront next to the ‘off’ bridge - will have been a further attraction to Sterling.

The developer is also starting with a ‘blank canvas’ given that the former shops and restaurants that occupied the site were demolished by former Atlantis owner, Kerzner International, when it harboured redevelopment ambitions similar to Sterling’s. This means the latter will not incur any demolition and site clearance-related costs.

“This is a great piece of land. This is an infill site,” Mr Kosoy told Tribune Business, revealing that the sale “covenants” with Brookfield mean Sterling cannot develop more than 300,000 square feet of combined residential, retail, restaurant and office space.

The bulk of the site, some 250,000 square feet, will be used for residential, while the remaining 50,000 is to be broken down into 20,000 square feet for retail and 15,000 square feet each for offices and restaurants.

Around 50 percent, or 10,000 square feet, of the retail space is currently dedicated to a combination of grocery and liquor stores. The former will have a majority 6,000 square feet, and Mr Kosoy disclosed that Sterling had already received a commitment from 700 Wines and Spirits, the retail arm of BISX-listed Commonwealth Brewery, for the liquor store spot.

Similar commitments have also been received for the pharmacy and dry cleaning outlets, while the presence of Gavin Watchorn, president and chief executive of BISX-listed AML Foods, at the groundbreaking indicated that Solomon’s Fresh Market is likely to be a leading contender to become Hurricane Hole’s “anchor” grocery store tenant. No deal or commitment is understood to have yet been reached, though.

“We’re trying to put in the right mix of service retail for the community,” Mr Kosoy explained. “We have tremendous interest. Unbelievable. We haven’t promoted the restaurants, but have had fives times’, ten times’ more inquiries than we have places.

“We’re trying to find the right mix where they complement each other and meld with each other. One will be a community place where people can talk to each other, like a club, and the other a high-end restaurant.” Both proposed Hurricane Hole restaurants will have an equal share of the space at 7,500 square feet each.

Mr Kosoy added that the redevelopment’s first phase will be known as Sterling Commons, and the second, One Paradise Island. No name has been decided on for the third and final stage, which will involve 170,00 square feet of residential space, but Sterling is open to having it branded.

As for price points, the Sterling chairman said the first phase units were likely to be sold at between $700,000-$900,000 for the first wave of buyers. Second phase prices were likely to range from $750,000-$800,000 to $1.6m, and the third and final phase anywhere from $2.5m to $6m.

The project’s first phase, which is scheduled for completion by June 2020, also includes the marina upgrades as well as construction of 16 residential units, and all the office space, commercial retail and the restaurants. The second phase is focused on the construction of 50-70 residential units and town homes.

“Right now, this is number one,” Mr Kosoy told Tribune Business of Hurricane Hole. “Every project we do is number one; every one gets the same attention. This is really my pet project. It’s exciting to me to leave something that will be here 100 years from now.

“I live here and I want to walk to work. How many people do that these days? It would be like the old days.” Sterling plans to move its own offices to Hurricane Hole.