Grand Bahama Mega-Resort 'On Course'

Monday, 24 March 2014 00:00 News Editor
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A 2018 opening, the hiring of 9,000 to 10,000 people, and the construction of what will essentially be a mini-city in East Grand Bahama are all said to be "on course" by a proposed $6.3 billion development's    U.S.-based    developer,    Larry McDonough.

"There's been a lot of hearsay but we're not going anywhere," said the ambitious developer, breaking his silence on the project, which, at almost twice the investment value of the Baha Mar mega-resort, has been portrayed by some as simply too huge to be realistically feasible.

The Blackwood Point Resort has not yet received approval from the government, but Prime Minister Perry Christie has spoken positively of the project and McDonough and former MP Kenneth Russell, his Bahamian representative, have suggested comments from the government point to the fact they are getting ever closer to this goal.

If it were to go ahead, the project would be - as McDonough said the prime

minister noted in the company's last meeting with him - the largest single investment ever in The Bahamas, and possibly in the Caribbean.

It would also make The Bahamas, and Grand Bahama in particular, a major Chinese center of investment in the region, just 90 miles from the coast of the United States.

To date, the project, which has been before the government for over a year in its current form, has only been spoken of by Russell, McDonough's Bahamian representative, who was also a Cabinet minister in the last Ingraham administration.

Breaking his silence on the project for the first time in an interview with Guardian Business, McDonough, chairman and president of Kylin International Group, said the project could be ready for a soft opening by 2018 if given the go-ahead by August of this year.

Hearing him list his plans for East Grand Bahama is like hearing a description of an entirely new city - a cruise port, an airport, a transportation system, an industrial park, a hospital, a power plant, schools, housing, government buildings, and six hotels including 2,900 rooms.

The developer says that without each of these components, the project simply couldn't work. And, he adds, looked at from the perspective of hotel rooms alone, it is only somewhat bigger than the Baha Mar project which is now slated to open in December 2014, and is also funded by a Chinese state-owned enterprise.

He also added that he and his team have tried to accommodate recommendations from the government with this adding in some cases to the scope of the project and the length of time it has taken to complete a final proposal.

"The government has been very, very helpful. They’ve made recommendations, for example with Minister (Kenred) Dorsett from the environmental and housing aspect. And so we listen to everyone's concerns and we look at it and if we can implement people’s concerns we do so,” said McDonough.

"I feel that the project is very strong and very solid both in components and in our teams that we have from construction to financing, and to the support in Grand Bahama."

The space availability in East Grand Bahama, its proximity to the U.S., and the level of unemployment on the island make it an ideal location for such a major project, he suggested.

"We just feel Grand Bahama was the island to do this. I just feel it's the right location,” he said.

McDonough suggested he is not leaving anything to chance in relation to airlift, suggesting he is not comfortable with an "if you build it, they will come" approach to development.

Air France

He explained how he has contracted with Air France Consulting to create an airlift plan for the resort, which involves sourcing tourists from North and South America, Europe and Asia, with the help of some planes which the company itself will own and operate. On April 11, he added, the Air France team will be in East Grand Bahama to review the proposed site for the airport.

"At this stage we’ve come up with somewhat of a plan that works for myself and the resort, and it will also I believe, help the Bahamas, the commonwealth in general, with what we’re planning on doing," he said.

Going into more detail, he added: "The equipment that we are purchasing will be equipment that can have nonstop service to three cities in China and the cities that will be serviced will be Beijing, Shanghai and Guangzhou.

“The services within China that will be feeding those cities are part of our other co-operations with other airlines in China."

McDonough said that due to the extensiveness of the proposal, the Chinese contractors who will be working on the project are putting together a delegation of engineers and dignitaries who will come to The Bahamas "in the next couple of weeks" to meet the prime minister and visit the sites.

The developer describes the project as something he will be not only be constructing, but running. He claims to have top hotel brands committed to being attached to each of the hotels even at this early stage.

"We are not carpetbaggers," said McDonough. "People are going to be amazed at who we have on our team."

'State-owned enterprise'

As for who will carry out the work of building the resort, McDonough described it only as "a large state-owned and Global 500 enterprise." McDonough said his vision is to "hire as many Bahamians as possible", assisted by an extensive training program, both into construction and permanent jobs at the resort/destination.

While Russell, McDonough's governmental affairs chief, has previously pointed to China Development Bank as the chief financier of the project, McDonough was more circumspect, stating that it was a "large top tier financial institution."

The terms of the deal: a straightforward commercial loan, providing 85 per cent of the financing for the project. McDonough will put in 15 per cent in equity.

Once approvals have been received, McDonough said that the next stage will be to hold town meetings in the East Grand Bahama area.

Asked about his background and how that would make him eligible to pull off a project of this magnitude, McDonough simply listed a number of areas he said he has experience in: Construction, hotels, transportation, education, shipping, aviation, hospitality, cruise ports, adding that he is skilled at knowing "who to hire and having the smartest people in the room”.

McDonough has been described by those who have worked with him as "laid back", and this easy going manner was evident in Guardian Business's conversation with him. Beyond this, not a huge amount is available to learn about him by way of an Internet search.

One piece of information that does appear is on a Chinese engineering company's webpage, which shows a photo of McDonough during a "signing ceremony for a project cooperation framework agreement" with the company for the Grand Bahama project in April 2013. The firm's website speaks enthusiastically of the Grand Bahama proposal, stating that the project has the support of the Bahamian government and will not only bring benefits for the island, but will also help firms in Zhejiang, China, to "go abroad”.

A website set up for Kylin International Grand Bahama Island is sparsely populated, with links to previous projects and other details yet to be filled.

McDonough said more information will be forthcoming as the project progresses. "I've done a wide variety of projects," he added.

Prime Minister Christie told Guardian Business last August that the Blackwood project would be "off to the races" if its proponents could answer several key questions at what was then an upcoming September meeting. These included whether they have the financial means to construct the development, the identity of all the key players, and if it does indeed have the support of the Chinese government. No approval was provided at this time and further meetings are slated to take place in coming months.

Alison Lowe
The Nassau Guardian
Published: March 24, 2014