Friday, April 12, 2019
By NEIL HARTNELL
Tribune Business Editor
The principal of Stuart Cove’s Dive Bahamas yesterday blasted “ridiculous” bank lending attitudes for delaying his firm’s $4m Coral Harbour relocation ahead of his landlord’s anticipated sale.
Stuart Cove revealed to Tribune Business he had wanted to move last Christmas from his present South Ocean site to a three-acre property he has already acquired, but was “messed up” by the reluctance of Bahamas-based banks to provide the necessary credit.
Disclosing that they had financed the property’s purchase, Mr Cove said he was at a loss to explain their unwillingness to aid renovation plans that include converting it into a “dive lodge” similar to the bonefishing lodge concept found throughout the Family Islands.
Questioning why lenders would take such a stance given his “perfect track record”, and the fact they are “full of money” with over $1.5bn in excess liquidity, he added that he likely had no choice but to now seek out foreign funding sources.
Mr Cove explained that his desire to move was being driven by a combination of wanting to escape the “exorbitant rent” he is paying at South Ocean and to get ahead of the likelihood that the 363-acre property may soon be sold to new developers.
Multiple Tribune Business sources, speaking on condition of anonymity, this week said Albany’s developers were again exploring options for a deal to acquire a resort property that has experienced numerous near misses and false starts on efforts to re-open it since South Ocean was closed in 2004.
“I’m planning on moving again and am just waiting for financing,” Mr Cove told Tribune Business of his world-renowned dive operation. “I’ve secured the property at Coral Harbour in anticipation of a sale.
“I just can’t get anything out of the banks. They lent me the money to secure the property, but have not given me the money to build. It’s a big piece of land with a big condo building on that we’re going to renovate.
“I had hoped to move at Christmas last year, but the financing messed me up. I’d move right away, but I need to build the facilities. I’ve got the property and all the permits, the zoning changes. All the groundwork is done,” he added.
“Right now all of it is work to pay rent and pay taxes. I’m tired of paying the exorbitant rent they charge me [at South Ocean]. That’s another reason I want to move. Then I will have something to sell for retirement. I will probably be in the business for another 20-30 years.”
Mr Cove said Stuart Cove’s Dive had also qualified for tax breaks and incentives available under the Hotels Encouragement Act, “so I don’t have to pay tax on the goods we’re using for building, and don’t have to pay real property tax for 20 years.
“We’ve been approved for that,” he added, “and had the property rezoned as commercial permanently, with the previous multi-family use expunged from the record. I think we could build in three months - a swimming pool, docks, bulkheads, 16 hotel rooms in the building. We will have a dive lodge, as well as a dive shop, and a restaurant and bar, which we have the licence for.
“We just need some money and we’re ready to go. I have everything in place. The banks are ridiculous. They’re full of money, and the newspapers say they are ready to lend. I’ve got a perfect track record but they’re doing me bad, so I have to go foreign.”
Giving more detail on his investment plans, Mr Cove told Tribune Business: “We’re looking at a phase one total of $2m, and looking at buying a property across the road to build cottage for people to stay. That will be another couple of million.
“Right now I just need phase one - the docks, swimming pool, bulkhead, landscaping. It’s about three acres on the north side of the road on the canal, after you turn to the Defence Force where the dive shops used to be.”
Mr Cove said he had heard “nothing formal” about a potential sale or redevelopment of South Ocean, which continues to be owned by the Canadian Commercial Workers Industry Pension Plan (CCWIPP). The fund took over ownership of the 363-acre property around two decades ago after developer Ron Kelly defaulted on loans he had borrowed from it.
However, multiple sources this week confirmed that there is renewed activity and interest in South Ocean. They suggested it was being led by Albany’s developers, who include the Tavistock Group, the vehicle for investments by Lyford Cay-based billionaire, Joe Lewis, and world-renowned golfers Tiger Woods and Ernie Els.
Albany’s developers have been involved in bids or joint ventures to acquire South Ocean, the last available parcel of land for mega resort development on New Providence, at least twice before. However, their last attempt was defeated when CCWIPP elected to go with an offer from controversial Lyford Cay resident and Austrian financier, Dr Mirko Kovats, which ultimately failed to seal a deal.
Albany’s continued interest in South Ocean’s fate remains obvious, though, not least because the two sites are next-door neighbours, and the former will want to ensure that whatever development takes place there matches the high-end luxury standards it has set.
Given that it has been closed for 15 years, South Ocean’s remaining value largely rests with its latent casino licence, which kicks in once the property reaches a certain number of rooms. Its golf course, too, was rated as the best in New Providence by many golfers.
“The value of my property is the canal entrance. They’ve already dug into the bedrock,” Mr Cove told Tribune Business. “They could go through my property, open up the canal and make a large marina. It makes sense for Albany to do it.
“I was looking to move because I knew they were going to sell the property. I wanted to be proactive, which will hopefully pay off, and the canal entrance is worth its weight in gold.”