You’re welcome. And thank you. Appreciation is always appreciated.
Baha Mar is a long and wild story, so we’ll try to be brief.
In 2005, Bahamian Prime Minister Perry Christie reached an agreement with local businessman Sarkis Izmirlian to help revitalize Cable Beach, the most popular beachfront destination on New Providence Island.
Izmirlian, then just 32, seemed a natural choice. He’s from a wealthy family -- his father is Armenian peanut tycoon Dikran Izmirlian -- and lives on nearby Lyford Cay, a billionaire enclave. Izmirlian sank nearly $900 million of his and his family's money into Baha Mar and recruited marquee-name partners, Harrah’s for one.
Initial plans for Baha Mar, a joint venture established in 2007 between Baha Mar Resorts and Harrah's (before its name was changed to Caesars), called for a mixed-use, six-resort, $2.6 billion project, including more than 3,550 guest rooms and a 100,000-square-foot casino set on 1,000 beachfront acres in Nassau's Cable Beach area.
Harrah's was a 43% minority partner in the project, with Baha Mar owning the remaining 57%. But after claiming to have spent "considerable time and resources pursuing the possibility of building a Caesars-branded resort-casino in the Bahamas," Harrah’s dropped out, citing "changing circumstances" in terms of Baha Mar’s inability to move forward.
Then the 2008 financial crisis hit and several potential partners, Starwood, Sheraton, and Wyndham, got cold feet.
That was when China State Construction Engineering Corp., the world’s second-largest contractor, offered to take over the project. The company quickly invested $150 million and introduced Izmirlian to the Export-Import Bank of China (EXIM). The bank ponied up $2.45 billion in construction loans, with the kind of onerous provisos for which the Chinese are famous: Izmirlian could never fire the Chinese builder, no matter what, and Chinese workers from mainland China would do the job.
Flush with Chinese money, Izmirlian declared four Baha Mar hotels would open by 2014. But his troubles were just beginning and over the next several years, the situation turned into "the ultimate contractor nightmare" — missed deadlines, disputed workmanship, delayed payments, and failed inspections (in one case, pipes burst in the presence of inspectors; in another, faulty balconies had to be reinforced); for their part, the Chinese accused Izmirlian of causing delays with endless design changes. It was all exacerbated by the language barrier.
In May 2014, Chinese officials assured Izmirlian and his partners that the resort would be ready to open in late March 2015.
On the heels of that news, Izmirlian hired 2,000 hotel workers, ran a global ad campaign, and seeded the casino with nearly $5 million.
Yet shortly thereafter, when construction remained hopelessly behind, Izmirlian filed for bankruptcy in Delaware.
Over the next few months, the U.S. judge dismissed the bankruptcy, a Bahamian judge assigned liquidators to take control of the property, and like the Fontainebleau in Las Vegas, Baha Mar, though nearly 95% complete, sat dead, molding and corroding in the tropical heat with a chain-link fence surrounding it.
And that’s where things stood until late last August, when it was announced that the Bahamian government and EXIM entered into an agreement to have Baha Mar completed and sold to a "world-class hotel and casino operator," with construction expected to resume in September. A little later, it was revealed that a company named Perfect Luck Holdings Limited, registered in Hong Kong in 2014 (and revealed as an arm of EXIM), had acquired the Baha Mar assets, leaving the Izmirlians out in the cold.
As it now stands, Sarkis Izmirlian remains locked in a dispute with the Chinese over his family’s $900 million initial investment. The Bahamian government, other than trying to unload the place, seems to be attempting to wash its hands of the whole boondoggle. The Chinese seem firmly in control. And construction, though announced that it would resume last September, has yet to start up again.
