Posted by: Editor on Dec 06, 2006 – 11:26 AM
newsandinfo  Ginn Clubs & Resorts, the developer behind the proposed $4.9 billion mixed-use resort on West End, Grand Bahama, has reached an agreement in principle to acquire the Old Bahama Bay Resort.

While both parties are understood to be keeping their lips sealed and not commenting publicly, sources have confirmed to The Tribune that both Ginn and principals at Old Bahama May’s owner, West End Resort Ltd, have been communicating regularly over a proposed deal that would see the US-based developer acquire the latter.

While no deal has been sealed, it is understood that both parties have thrashed out a framework agreement and terms for a purchase that would still be subject to government approvals.

Those, though, are unlikely to be a major for both parties, given the Government’s eagerness to see Ginny’s project – which has been touted as having a total value of between $3.7 billion and $4.9 billion – take root and revitalize a Grand Bahama economy still struggling to recover from the Royal Oasis closure and the shareholder dispute at the Grand Bahama Port Authority (GBPA).

If the deal is concluded, the Old Bahama Bay Resort would be incorporated into Ginn’s multi-million dollar development plan for West End as a key attraction. Given that it is already built, Old Bahama Bay will give Ginn something of a head start on construction, and provide accommodation for potential investors and real estate purchasers when they fly in to assess potential land and lot purchases in West End.

Old Bahama Bay is a highly regarded resort, having been the first Bahamian marina to attain Blue Flag status, something awarded to properties that achieve the highest environmental standards. Its reputation for quality will fit in well with Ginn’s plans, especially as Old Bahama Bay unveiled a $585 million expansion plan as recently as September 2005.

That project will increase the resort’s size to 228 acres from the original 150 acres, which comprised 82 homes sites, 72 dock slips, a 49-room luxury hotel and three restaurants. The 78-acre expansion involves the construction of a new luxury hotel, 450 multi-family condominium units and expansion of the marina facility to 180 slips. The Old Bahama Bay expansion will also see the development of an extra 45 to 50 additional single family home sites.

While Ginn’s West End development is more of a real estate play than Paradise Island Phase III, for example, over 20 years, the project is expected to have a $4 billion cumulative gross domestic product (GDP) impact, creating 4,000 permanent jobs; 3,700 construction jobs; and other spin-off and entrepreneurial ventures. And that was before Ginn said the size of the project had increased to $4.9 billion from $3.7 billion, involving 4,400 condo hotel units and 870 home sites.

The Government is hoping that the Ginn project plays a vital role in revitalizing West End and Grand Bahama. It will take place in an economically depressed area that was ravaged by storms in 2004 and 2005.

Prime Minister Perry Christie, in unveiling the original Heads of Agreement with Ginn in December 2005, said that while the company was set to gain Stamp Tax incentives, then worth $318 million, the Government would receive other taxes that developers were often exempted from paying.

For example, both Kerzner International and Baha Mar have been granted 10-year real estate property tax exemptions on all properties constructed in their Paradise Island Phase III and Cable Beach redevelopments respectively. But in Ginn’s case, real property taxes amounting to $196.8 million will be paid on all lots, condos and homes in the development, although not on resort amenities.

In addition, Ginn had also agreed to pay occupancy taxes amounting to almost $60 million on homes and condos not included in the hotel pool. All units in the hotel pool have to pay room taxes, with customs duty paid on the materials used in the construction of all homes and condos.
And $2,000 from each residential lot sale will help to create a $10 million foundation to redevelop West End.

Source: The Tribune