March 13, 2008 - 9:00 pm
Harrah’s Entertainment’s sudden withdrawal from a $2.6 billion resort project in the Bahamas has left the country’s business community stunned.
“We all thought it was a go,” Bahamas Chamber of Commerce President Dionisio D’Aguilar said Tuesday. “There was an upbeat feeling in the community and the economy that the deal was finally done and moving forward.”
The Las Vegas-based gaming company was slated to partner with Baha Mar Resorts Ltd. and Starwood Hotels & Resorts Worldwide to develop a six-hotel, mixed-use resort on 1,000 acres of beachfront property on Cable Beach. Harrah’s had a 43 percent interest in the project with Baha Mar Resorts holding the remaining 57 percent. Starwood would brand some of the hotels and manage much of the property.
D’Aguilar said the region, which relies heavily on tourist dollars from the United States for its economy, was looking to the construction project to provide jobs during the current economic slowdown.
“It was going to be a huge cushion for us as we went through this slight downturn,” said D’Aguilar, estimating the construction would provide 5,000 jobs in a country with a work force of 120,000 people.
Plans called for the first Caesars-branded hotel-casino outside the United States to anchor the property.
Harrah’s declined numerous requests Monday and Tuesday to discuss its reasons for the exit. The company did release a statement to the Review-Journal on late Tuesday that was sent to the media in the Bahamas on Sunday.
The Baha Mar Development Co. had taken too long to organize the project and “circumstances have changed,” forcing the gaming giant to pull out of the project, the statement suggested.
“We do not have confidence that the proposed joint venture could successfully complete the project as originally contemplated and accordingly we believe it would prove more harmful for all to move forward,” the statement read in part.
The joint venture was first announced in November 2005 at a press conference in New York City that Harrah’s Chairman and Chief Executive Officer Gary Loveman and from the partnership and members of the Bahamas’ government attended.
On Jan. 31, the partnership announced it had finalized joint-venture agreements with the government to develop the project.
“Caesars Resorts Hotel at Baha Mar is an important component of our global growth strategy,” Harrah’s Vice Chairman Chuck Atwood said in a statement at the time.
In a filing with the Securities and Exchange Commission reporting yearly revenues Feb. 29, the company said it expected “to develop and operate a Caesars … within the project,” cautioning that completion is subject to a “number of conditions.”
Baha Mar reiterated its position Tuesday that Harrah’s “attempt to pull out from the Baha Mar project is a breach of faith” with the developer and the government.
However, the project will continue toward a planned 2011 opening, the developer and government officials said. Inquiries to the prime minister’s office were not returned by press time.
“It’s just disappointing that for years the country and the government let the deal slip through their hands,” D’Aguilar said. “It’s disappointing because it’s such a great project, and now it’s collapsed in flames.”
Contact reporter Arnold M. Knightly at email@example.com or (702) 477-3893.