Baha Mar Timeline
2002: Baha Mar Development Co. is formed, and its management team is assembled.
April 2005: Purchased Nassau Beach Hotel, Wyndham Nassau Resort and Crystal Palace Casino from American investor and businessman Phil Ruffin; purchased the Radisson Cable Beach Resort from the Hotel Corp. of the Bahamas.
May 2005: Began a $145 million capital revitalization program at the Sheraton Cable Beach Resort (the former Radisson) and the Wyndham Nassau Resort.
January 2007: Signed agreement to form a joint venture with Harrah's Entertainment and to develop a $2.6 billion project, with Baha Mar Resorts a 57% equity partner and Harrah's Entertainment a 43% equity partner. The project represented the largest investment and first major Caesars hotel outside the U.S. for Harrah's.
January 2008: Baha Mar and Harrah's signed a Supplemental Heads of Agreement for additional tax concessions and funding.
Baha Mar, the colossal resort project that was billed as the largest single hospitality investment in the Bahamas when it was announced in November 2002, teetered on its architectural renderings last week when Harrah's Entertainment, one of the two joint-venture partners, suddenly bailed.
Initial plans for Baha Mar, a joint venture of Baha Mar Resorts and Harrah's, 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.
Employment was expected to top more than 2,000 workers during the construction phases and more than 10,000 when the project was completed and open in 2011.
Baha Mar Resorts in Nassau said that it viewed the March 10 pullout of Harrah's from the deal the two companies had signed last year as a "breach of faith." Even so, Baha Mar Resorts affirmed its commitment to move forward with plans for the mega-resort complex.
"This project will benefit the economy of the Bahamas and the Bahamian people," Baha Mar said in a statement. "If necessary, we will explore alternative options in partnership with the government to complete the project in a responsible fashion."
Harrah's was a 43% minority partner in the project, with Baha Mar Development owning the remaining 57%.
Harrah's statement said that the gaming company had spent "considerable time and resources pursuing the possibility of building a Caesars-branded resort casino in the Bahamas."
"Unfortunately, it has taken Baha Mar Development Co. longer than anticipated to organize the project, and circumstances have changed such that it is simply not prudent to move forward," Harrah's said in a statement.
The delays included assembling key parcels of land along West Bay Street in the Cable Beach area of Nassau and obtaining the necessary government approvals so that the project could move along, an arrangement that previously had been discussed.
The ground-breaking ceremony had been set for March 18.
Baha Mar challenges Harrah's move
In response to Harrah's withdrawal, Baha Mar challenged Harrah's right "to unilaterally terminate the arrangements" that both parties had affirmed as recently as Jan. 31 when they signed a Supplemental Heads of Agreement, seeking additional approvals and concessions from the government.
Prime Minister Hubert Ingraham triggered a firestorm of controversy and speculation on March 5, when in remarks before the House of Assembly he expressed doubts about Baha Mar's ability to finance the project. However, Ingraham told that same body four days later that the government fully supported Baha Mar in its commitment to redevelop the Cable Beach strip.
In fact, after the announcement of Harrah's pullout, Ingraham said that his administration would seek to do all it could to "put Baha Mar in the best position to proceed with either another joint-venture partner or to go back and talk with Harrah's."
The prime minister also assured Harrah's that the company was "welcome to invest in the Bahamas at any time."
Although Harrah's terminated its involvement in the Baha Mar project, it hinted at the possibility "of a project sometime in the future."
A lot of people are hoping that comes to pass.
The January 2007 joint-venture agreement called for the partners to create the largest single-phase destination in the Bahamas, with the Caesars hotel as the anchor property alongside three new Starwood Hotels (St. Regis, W and Westin), and the existing Wyndham and Sheraton (a former Radisson) that recently reopened after completing multimillion-dollar makeovers.
The Cable Beach development project is considered a linchpin of Bahamian economic growth, and its success "is very important to the continued growth and development of tourism in the Bahamas," said Russell Miller, president of the Bahamas Hotel Association.
"It is unfortunate that Harrah's has made the decision it has at this time," Miller said. "Going forward, this is a matter between the developer and the government of the Bahamas."
Both Miller and Frank Comito, the BHA's executive vice president, emphasized that the situation was still playing itself out.
"It's premature to put the nail in the coffin," Comito said. "We don't know the final outcome yet."
Although Baha Mar indicated that it intends to proceed with the project, "hoteliers here are nervous," Miller said. "In any situation, this would be a big blow, and we hope it's not the blow that kills the deal. We're hoping for negotiation and resolution."
Atlantis Resort, the massive complex that has dominated the Bahamas since it exploded on the scene in 1998 on Paradise Island, just over the bridge from Nassau's Cable Beach, described the Baha Mar project as "great for our business and for overall tourism in the region."
"We feel strongly that continued investment in Cable Beach will improve the overall guest experience, which will increase demand and airlift to the destination," according to an Atlantis statement.
Although a delay in the Baha Mar development will not directly affect Atlantis's business, "any enhancements to the overall destination are positive," Atlantis said in the statement.
To contact reporter Gay Nagle Myers, send e-mail to [email protected].