New Resort To Have Major Economic Impact On The Bahamas

Thursday, 01 October 2009 00:00 News Editor
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A major mixed-use resort project is projected to generate an annual economic impact ranging from $54 million to $90 million for the Bahamian economy, its principals told Tribune Business yesterday, adding that the 291 lot sales they have closed have brought "hundreds of visitors to Long Island".

In a series of e-mailed answers to Tribune Business's questions, Ian Moorcroft, one of the principals behind the Port St George project, earmarked for a site next to Long Island's existing Stella Maris subdivision, said being debt free had been "critical" to its ability to weather the global recession and credit crunch.

"Many projects have run into difficulties because bankers withdrew lines of credit or, worse still, recalled outstanding loans," Mr Moorcroft told Tribune Business.

"Real estate development is long term and capital intensive. Consequently, most developers are reliant upon lines of credit, and many have been heavily geared in recent years. Because the Port St George project is free of any external debt we did not suffer from the same difficulties."

Mr Moorcroft added that the economic impact analysis conducted for Port St George by Norton Consulting, and submitted to the Bahamas Investment Authority as part of the project applications, predicted that the development would have an annual economic impact of between $54 million and $90 million.

Although unable to contract any lot pre-sales at Port St George until subdivision approval was obtained, Mr Moorcroft said the developers had instead been able to sell real estate in the neighbouring Stella Maris subdivision.

"Our original target was 300 sales and we have closed 291 to date, so we are very pleased with the sales results. These sales have resulted in hundreds of visitors to Long Island, most of whom stay at the Stella Maris Resort Club," Mr Moorcroft told Tribune Business.

This newspaper reported last week that many of these sales had been to European buyers and international sports personalities. Right to Buy agreements to secure lots on the main Port St George site have been entered into with the purchasers, who must pay a 10 per cent deposit once subdivision drawings are finished, the balance being due when infrastructure is completed.

Although no sales can be concluded in the absence of subdivision approval, the Port St George developers said then: "A high conversion rate of right to buy agreements into sales agreements is expected, as the price at which right to buy holders are entitled to purchase is extremely attractive. This has led to some right to buy agreements changing hands for a considerable premium.

"Whilst the pre-sales from the right to buy agreements are expected to result in approximately 25 per cent of the plots at Port St George being sold at a substantial discount, the early revenue generated is expected to more than cover the costs of infrastructure to the entire site, including construction of the marina and golf course."

When asked why Port St George would succeed, when many other Family Island-based resort projects had failed to match expectations, stalling or going into hibernation until new financing became available, Mr Moorcroft told Tribune Business: "Planning, quality and prudent finances.

"Every facet of the project has been fastidiously researched, and we are working with industry leaders in every field. Whilst we are keen to make progress as quickly as we can, it's also important to get things right.

"We have all heard of projects where construction has begun only to be halted after a few months for one reason or another. We are determined that Port St. George will not become another name on the list of such projects. By following the proper procedures, without cutting corners or making plans based on assumptions when, with a little more time, they can be based on facts, we believe that Port St George will be a resounding success."

Mr Moorcroft told Tribune Business that Long Island's "spectacular beauty" but, more importantly, its people, would be what makes Port St George special and differentiates it from rival resorts.

"The Long Islanders work ethic is known throughout the Bahamas, but it is their genuine warmth and friendliness that is striking to the visitor. When checking in at the Stella Maris Resort Club guests don't even need a room key, so safe and secure is the environment. I know of no other hotel anywhere in the world where that is the case," Mr Moorcroft said.

Source: The Tribune