I was all set to write about the US Supreme Court’s decision to legalize gay marriage throughout the country and the impact it will have on our country, but this takes the cake!
For many weeks now we’ve heard of the woes of Baha Mar;
- The failure to open
- The cancelled bookings
- The new hires directing traffic and whatever else
But while we felt uneasy about the development, we all knew this HAD to work out or we all hope that it will.
For good or bad whether we agree with the development or not, it has become the savior of the Bahamas.
- Moody’s and S&P made their ratings projections contingent on its success.
- The PM is counting on it to save his skin in 2017
- Thousands of unemployed Bahamians are depending on it for a job
So the news that Baha Mar filed for Bankruptcy is a mighty blow for the Bahamas.
Is it over? No, this move was made to give the development a chance to succeed. But this is perhaps the bleakest it’s looked in my opinion.
“I am committed to doing all I realistically can to move Baha Mar forward to be completed and opened successfully. I am confident that, once opened, Baha Mar will be a world-class destination resort that will attract guests from around the world and serve as a key economic sparkplug to The Bahamas. The Chapter 11 process provides the appropriate venue to create a viable financial structure that places Baha Mar’s interests foremost.” – Sarkis Izmirlian
As I was scouring the internet to read about this story, I was struck by this statements made by Izmirlian;
“The general contractor repeatedly has missed construction deadlines. This has caused both sizeable delay costs and forced the resort to postpone its opening. Unable to open, the resort has been left without a sufficient source of revenue to continue our existing business.
“In fact, after the general contractor made a guarantee to us in November 2014, and then again in January 2015, that Baha Mar would be able to open in its entirety on March 27, 2015, we undertook all preparations necessary for this promised opening date, including significant hiring and training of nearly two thousand employees and purchasing of goods and services. Indeed, even when we subsequently found out that the March 27 deadline was not feasible because the general contractor had still not completed construction, rather than simply downsizing, we maintained our employment levels in anticipation of a revised opening date, utilizing our financial resources to pay employees to continue their work at the project and participate in volunteer activities around the island for the benefit of the country.
“At the same time, we sought the help of Baha Mar’s major lender to bring to fruition the completion of construction and the successful opening of Baha Mar, including informing both the lender and the general contractor of our willingness to invest more of our own funds to help cover the delay costs. Unfortunately, our efforts, as well as those of the Bahamian government, have not accomplished that objective. Construction on the project remains incomplete and, consequently, we have not been in a position to set a revised opening date. Thus, the Chapter 11 process is the best path for Baha Mar to now undertake.
“Baha Mar believes that a negotiated solution is possible among the existing parties to the resort project that would lead to its completion and successful opening. To position ourselves to achieve that goal, and to allow time to explore a consensual solution, Baha Mar will continue for a period to operate and fund payroll. We will do our very best to continue to engage the resort’s lender to reach a consensual resolution that assures our ability to complete construction and open successfully. However, if we cannot reach a consensual resolution in the next few weeks, we will have to make some extremely difficult decisions that would include workforce reductions.”
“The people of The Bahamas should no longer have to endure the adverse effects of the general contractor not fulfilling assurances regarding the completion of Baha Mar’s construction, forcing in turn embarrassing delays of Baha Mar’s opening. Nor should members of the travel industry and guests continue to face understandable frustration and disappointment caused by the failure to complete construction. All of this now stops with and can be remedied through the Chapter 11 process,” said Mr. Izmirlian.
When I read this I get the feeling that some high stakes game is being played, with the future of The Bahamas in the balance.
Perhaps its time to seriously rethink our reliance on huge Foreign Investments, on Tourism and the Chinese!