By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Paradise Island development said to have generated "over $150m" in pre-sales is the focal point of a furious legal battle that has erupted between its former and current development partners.

Roger Stein, who previously sought to redevelop New Providence's South Ocean resort property, then made a bid to buy downtown Nassau's British Colonial hotel around a decade ago, has launched a New York legal action alleging he was forced out of the multi-million dollar Ocean Club, Four Seasons Residences project that is currently under construction overlooking Cabbage Beach.

His breach of contract claim, which is said to be seeking $35m in damages, asserts that Two Roads Development, the Florida-based firm that is the project's current development partner, is exploiting the proprietary and confidential information assembled by his company, Soho Development, to its financial benefit by using it for the development with zero compensation paid to himself.

Two Roads, in a statement to Tribune Business, sought to portray the lawsuit by Mr Stein and Soho Development as "nothing more than a transparent money grab" and pledged to "aggressively defend" itself in the New York State Supreme Court. Blasting the claim as "baseless", and asserting that it has always acted with "integrity, it signalled it would seek damages for any impact to the project.

“This lawsuit is entirely without merit and represents nothing more than a transparent money grab. Two Roads Development has acted with integrity throughout the course of its involvement in The Bahamas project," a Two Roads spokesperson said.

"We intend to aggressively defend ourselves against these baseless allegations and will pursue all available legal remedies against Soho Development and Roger Stein, including claims for any damages their actions may have caused.”

However, William A. Brewer III, the attorney representing Mr Stein and his company, countered: “Soho seeks to hold Two Roads accountable for its betrayal of the trust he [Stein] placed in them. No one should be able to circumvent binding agreements and profit without consequence.

“If business partners can sidestep NDAs (non-disclosure agreements) without facing real consequences, then every developer, investor and business partner who works in good faith is vulnerable.” The dispute's roots date back to 2017 when the Ocean Club's owner, Access Industries, approached Mr Stein "to begun exploratory work" on the development now underway.

Access Industries, the development's main financing and equity partner, manages a $35bn investment portfolio and is owned by billionaire, Leonard “Len” Blavatnik. However, it is not named as a defendant in the New York action, and it is thought unlikely that the lawsuit will have any impact on the project's development or the Bahamian construction jobs likely to be generated.

"This early stage work included initial planning, conceptual development, public relations and related meetings," Mr Stein's legal action asserted. "In early 2021, an executive with Access again contacted Stein, this time to lead the execution of a $350m luxury residential development on a six-acre site adjacent to the Four Seasons hotel [Ocean Club] on Paradise Island in The Bahamas."

Suggesting that Mr Stein was selected on the basis of his "more than 20 years' experience in The Bahamas, including expertise in land acquisition, government approvals and entitlements, financing and public relations, with long-standing local relationships", the lawsuit added that he then selected Two Roads to work with him as a "co-sponsor" of the project.

The two parties allegedly signed a confidentiality and non-disclosure agreement that "expressly prohibited" Two Roads from disclosing Soho Development's confidential information or "pursuing" the development without the latter's involvement.

"Unfortunately, Two Roads violated the agreement by pursuing the project without Soho’s consent, misusing Soho’s proprietary information for its own benefit and engaging with other potential co-sponsors. Two Roads exploited the confidential information and contracts provided by Soho, thereby breaching their contractual obligations. This conduct constitutes a clear breach of the agreement," the lawsuit claims.

"After being selected by Access for this high-profile project, Stein initiated pre-development efforts for a high-end residential project, including conceptual planning and feasibility work. During this early phase, Stein commissioned site and environmental assessments, ran extensive processes to identify and retain an overall project architect and a separate interior design firm, conducted feasibility and zoning analyses, and advanced crucial relationships with local government authorities related to site plan and overall project approval for the highly controversial site.

"Stein retained all preliminary work products from this period, including consultant rosters, feasibility studies, architectural conceptual plans and renderings, and other materials, positioning Soho to move forward with the project whenever the right time emerged."

Jonah Sonnenborn, head of Access Industries' real estate division, contacted Mr Stein in April 2021 to start moving the project forward. "Sonnenborn asked Soho to step into the central role of 'sponsor', serving as the public face of the estimated $350m project and managing the day-to-day execution of the development including site control, government approvals, permitting, construction oversight, architectural selection and design, interior designer selection and design, landscaping architect selection and design, budgeting, construction loan guarantees, sales and marketing and overall timelines," the lawsuit alleged.

"As the sponsor, it was expressly understood that Soho, along with the co-sponsor, would contribute 10 percent of the required equity and assume primary responsibility for the project’s success or failure. Access, for its part, would contribute the required equity as an investor. Stein agreed that Soho would assume the role of lead sponsor to help advance the project.

"The residential project’s proximity to, and potential connection with, the Four Seasons Ocean Club made it attractive for prospective developers. However, the project's size required a co-sponsor with a robust balance sheet. Following significant outreach and diligence, Stein secured an appropriate co-sponsor, Two Roads."

The two allegedly agreed their confidentiality and non-disclosure agreement on July 22, 2021, and then began negotiating a joint venture agreement with Access Industries for the project. However, the talks ran into difficulties over the alleged terms demanded by the Ocean Club owner, which wanted a non-compete clause included to prevent Mr Stein and Two Roads working on other Bahamas projects.

"During September 2021, Access intensified pressure to complete the joint venture agreement and insisted that it be signed before a scheduled government meeting," Mr Stein's lawsuit alleged.

"Co-sponsors Soho and Two Roads informed Access that the draft joint venture agreement stripped them of essential protections and imposed commercially unreasonable terms, including a non-compete provision that prevented the sponsors from engaging in other real estate development in The Bahamas.

"This prohibition is ironic, as Soho’s local knowledge and relationships in The Bahamas were precisely why Access selected Soho as the lead developer of the project. Notably, however, that provision did not encumber Two Roads, because it lacked relationships or experience in The Bahamas," it added.

"Access’s demands levied a disproportionate burden upon Soho. It was at this time that Soho’s goodwill towards Two Roads backfired: The value of their introductions, pre-development work and hard-won local relationships was leveraged by Two Roads to negotiate exclusive terms with Access without Soho’s consent, leaving Soho with no compensation for its years of effort."

Despite continued talks, "Access refused to consider Stein’s objections to the expanded non-compete provision. On September 28, 2021, Access informed the co-sponsors that it was unwilling to remove the strict and re-traded non-compete provision".

Mr Stein and Soho Development were unable to accept those terms, and instead held on to hope that their agreement with Two Roads would ensure their continued involvement. "Gradually, Soho was excluded from the project as Access worked directly with Two Roads," the original development partner claimed.

"Given that the agreement explicitly prevented Two Roads from 'maintaining contact with any third parties for the purpose of engaging in the project', Two Roads was required to regard Soho’s exclusion from the project as its own exclusion.... Defendant surreptitiously pursued the development of the project with Access.

"Following Stein’s exclusion from the project, and with no need for further evaluation of the project, Two Roads continued to use his confidential information. Two Roads never compensated Soho for its contributions, nor did it obtain Soho’s written consent to act in violation of the agreement. Defendant continued to use Stein’s confidential information in new collaborations following his removal."

Mr Stein alleged that his subsequent efforts to find out about the project's progress were met "met with delay, deflection and misdirection", and that Access Industries and Two Roads have proceeded together with himself excluded.

"Two Roads and Access announced that they were breaking ground on the development in January 2025. Now marketed as 'The Ocean Club, Four Seasons Residences, Bahamas,' the project has advanced well into the pre-sale phase, with over $150m in residential unit pre-sales. Defendant [Two Roads] stands to earn more than $50m," he claimed.

Mr Stein's efforts to redevelop the South Ocean property failed amid an acrimonious New York legal battle with his financing partner, hedge fund Plainfield Asset Management, which took place around 15 years ago. His efforts to acquire the British Colonial also did not succeed with the property ultimately sold to Baha Mar contractor, China Construction America (CCA).