LAS VEGAS-Harrah’s Entertainment told Baha Mar Resorts last week that it was terminating their joint venture agreement to develop a multibillion-dollar resort on 1,000 acres in the Bahamas that included a 100,000-sf casino and more than 3,000 hotel and condo-hotel units. Baha Mar Resorts revealed the notice on Friday, saying it has sent its own notice to Harrah’s questioning the gaming resort operator’s ability to unilaterally terminate the agreement. Harrah’s has not yet responded or filed any information with the SEC regarding the dispute.
The project was first announced in November 2005 and further detailed in January 2007, when it signed agreements creating the joint venture. In late January 2008, right after its privatization, Harrah’s affirmed its plans by signing a Heads of Agreement with the Government of the Bahamas.
On Friday, Baha Mar Resorts stated that Harrah’s, “in attempting to justify its actions…referred to comments made five days ago in the House of Assembly questioning the ability of the project to proceed ahead.” However, on Thursday, March 6, according to Baha Mar Resorts, the House of Assembly voted unanimously to approve all of the Government’s sale agreements for key parcels of land to be transferred to Baha Mar, accompanied by numerous positive comments about the Baha Mar project from several key Members of Parliament.
On Sunday, Harrah’s issued a statement saying that it has spent “considerable time and resources pursuing the possibility of building a Caesar’s-branded resort casino in the Bahamas. Unfortunately, it has taken Baha Mar Development Company longer to organize the project than anticipated and circumstances have changed such that it is simply not prudent to move forward,” states Harrah’s. “We do not have confidence that the proposed joint venture could successfully complete the project as originally contemplated and accordingly we believe it could prove harmful for all to move forward. We are open to the possibility of a project sometime in the future, however, at this point we have terminated our involvement in the Baha Mar project.”
The January 2007 agreement between Harrah’s Entertainment and a subsidiary of Baha Mar Resorts Holdings Ltd. called for the duo to create the Caribbean’s largest single-phase destination in the Bahamas. The JV also signed management agreements with subsidiaries of Starwood Hotels & Resorts Worldwide Inc. The joint venture was set up to be 57% owned by the Baha Mar subsidiary and 43% by a subsidiary Harrah’s “effective upon confirmation by the Bahamian Government of certain required approvals and concessions and satisfaction of certain other conditions,” according to Harrah’s latest annual report.
The JV was to develop Baja Mar, a 1,000-acre resort here designed to include a 100,000-sf casino and more than 3,000 hotel and condo-hotel units. Other planned amenities included a 20-acre beachfront pool area; a retail village with upscale shopping, chef-branded restaurants and entertainment venues; a 200,000-sf convention center; a championship golf course; three spas; and a “distinctive show-lake experience.”
Baha Mar Ltd. president Don Robinson told GlobeSt.com in January that all of the aforementioned components would cost about $2.4 billion and soak up about 400 acres. The remaining acreage was being reserved for a second golf course and additional residential components, he said. Site work was scheduled to begin in 2007, with project financing expected to come this year and completion in 2011.
The project’s anchor was to be a new Caesars Resort Hotel by Harrah’s that would have had more than 1,000 guest rooms and the aforementioned casino, which was to be the largest in the Caribbean. The remaining hotel and condo-hotel rooms were to be housed in five other hotels, two of which already exist on the property.
There are actually three hotels currently on the property, the Radisson Cable Beach & Golf Resort, the Nassau Beach Hotel and Wyndham Nassau. The Radisson was scheduled to receive an $80-million makeover and reopen in 2007 flying Starwood’s Sheraton flag. The five-tower Wyndham Nassau was to be shrunk to three towers and continue to be run by Baha Mar Resorts, while the Nassau Beach Hotel was to be demolished completely, Robinson said. As well, an existing golf course on the property was to be recaptured and combined with adjacent land to create a new Jack Nicklaus Signature Golf Course, Robinson says.
“We anticipate the [eventual] need for a second golf course and additional residential [on a portion of the 600 acres being held in reserve],” Robinson said. “Beyond that, we will see how the economics work and then make some choices on what else we might build on the remaining land.”
As for the resort’s overall layout, Robinson said there would be a tower on each side of the entrance. The one on the left would be the Westin Baha Mar and the one on the right would be the Caesar’s. Behind the two towers, and closer to the beach, would be the W Baha Mar and the St. Regis Baha Mar. The convention center would sit adjacent to the Westin but would serve the convention needs of all of the brands, he said.
The design team for the overall project included MHA Studio of Los Angeles, an affiliate of Baha Mar Resorts Ltd., and Hillier Architecture of Princeton, NJ.