• Eleuthera project in Scotia finance deal
• Sir Franklyn: ‘We had to stay the course’
• Will pave way for other Out Island resorts
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
Sir Franklyn Wilson yesterday said the 1,200-acre Jack’s Bay project has attracted interest from “four times” the number of founding buyers it is targeting while receiving “a very strong endorsement” from Scotiabank.
The Eleuthera Properties and Jack’s Bay chairman, speaking as the latter unveiled a multi-million dollar debt financing package from the Canadian lender that will enable it to build-out its amenities and provide mortgage funding to its homeowners, pledged that “big things are happening” with a project he and fellow investors first acquired more than 60 years ago.
He described Jack’s Bay as “pretty unique” given that it now has two of the three Canadian-owned, Bahamas-based commercial banks involved as investors, with Royal Bank of Canada’s (RBC) equity ownership complementing Scotiabank’s debt position.
Disclosing that the project, billed as a private club community, is attracting “tremendous interest” from potential investors and real estate buyers, Sir Franklyn added that has generated demand far in excess of the 24 ‘“founders” it was originally seeking to attract.
With IMI Worldwide Properties, which first marketed Ocean Club Estates to global purchasers once it was developed, now hired to do the same for Jack’s Bay, he said the sales drive will be further boosted by the Scotiabank partnership that will result in the bank providing mortgage financing to home buyers.
Voicing optimism that Jack’s Bay will become a model, or trailblazer, for other Family Island hotel and resort projects that have traditionally struggled to attract bank financing, Sir Franklyn said he and his fellow investors “had to stay the course” and stick with the “vision” for the property even if it required incredible patience to show Bahamians the benefits of investing in the country’s largest industry.
“This is a very significant development,” Sir Franklyn told Tribune Business of Scotiabank’s debt financing provision. “Jack’s Bay is now in an incredible position where the Royal Bank of Canada is an investor with actual ordinary shares; an equity investor. Scotiabank is in in a very complementary way.
“We have two of the three big Canadian banks involved in Jack’s Bay in ways that are pretty unique. That [Scotiabank’s partnership] is a very, very strong endorsement. Let’s just say we are very pleased it happened at a significant time because there are a lot of other things happening that we’ll be announcing to the public in short order.”
Sir Franklyn, also the Sunshine Holdings and Arawak Homes chairman, added that the profile feature on Jack’s Bay’s in one of Golf magazine’s summer editions was “generating tremendous interest” in the development from prospective international buyers. This, he said, easily exceeds the 24 so-called “founders” the project was hoping to entice to purchase one of its beachfront and ocean view homesites ranging in price from $1m to nearly $3m.
“It’s very, very strong interest,” he told this newspaper. “We have dozens of persons who have paid deposits to become founders in the programme. We referenced not more than two dozen. We have at least four times’ that, the number of people who would have interest in this. They have paid deposits for a reservation. The fact of the matter is we are only looking for about two dozen. We have four times’ that with potential founders. Potential.”
Revealing IMI Worldwide Properties’ involvement in Jack’s Bay’s real estate marketing and sales efforts, Sir Franklyn added: “The method these people have is they’re going through a process where people can go online, look at the legal documents, do what due diligence they have to do and be told on a given day that they have to close. That is the significance of that part of the announcement about financing home buyers.”
Besides mortgage financing for real estate buyers, the Scotiabank financing package also includes a development loan. This will fund Jack’s Bay first phase development, which will include the Atlantic Club; a sports pavilion; upgrades to the current beach club known as the Pink House; a 7,000 square foot spa village; ready-to-build lots on Founders Row; and 12 Atlantic Club cottages.
This phase is expected to be complete in late 2024, according to a Jack’s Bay statement. Other amenities planned for Jacks’ Bay include a beach club, fitness and wellness programme and 18-hole Nicklaus Heritage course with a new clubhouse and comfort stations scheduled for completion in early 2025.
Sir Franklyn declined to provide details on the total value and size of the Scotiabank financing package, referring this newspaper to the bank, but added: “It’s a lot of money.” Confirming that it was “no doubt” in the millions of dollars, he said: “The first figure is not one.”
Apart from Jack’s Bay, Sir Franklyn voiced optimism that the partnership with Scotiabank will also pave the way for other Family Island resort and hotel developments to secure their own bank financing. “It is significant for Jack’s Bay, but it is even more significant for Family Island development,” he told Tribune Business. “The fact of the matter is getting banks to invest in Family Island projects has been a struggle for people with such vision.
“We hope that this will become very relevant for other investors, Bahamian and non-Bahamian, who are seeking to do things in the Family Islands. Do you think Baha Mar would exist if Atlantis was not successful? That’s my point. The fact that once Jack’s Bay is successful, we pray that our success will help to fuel the success of others throughout the Family Islands. That’s our prayer.”
Sir Franklyn said the involvement of former FNM Cabinet minister and MP, Tommy Turnquest, as Jack’s Bay’s chief executive “demonstrates for all to see this is nothing to so with partisan kind of stuff. It’s to do with country; that’s part of the narrative of what’s unfolding”.
Asked whether Jack’s Bay could inspire more Bahamians, who have traditionally been reluctant to invest in the resort and hotel sector, to do so, Sir Franklyn replied: “That’s what it’s all about. That’s why the patience, that’s why we had to take it. That’s why we had to stay with it. The lessons for the country are too many and too varied. We had to do this. We had to stay the course.
“We closed on the purchase of the asset on January 30, 1987. Investors don’t generally go to 36 years, 37 years to stay with the vision. That’s not normal.” Sir Franklyn, in a statement unveiling the financing partnership, said: “We are thrilled to partner with Scotiabank on this integral phase of Jack’s Bay. Their confidence in our capital structure is an honorable endorsement and a nod to the firm’s strong track record.
“Further, we were able to collaborate with the team at Scotiabank on a facility that met the conditions of a traditional senior loan but also provided a degree of customisation to allow us to execute our original business plan. This is a significant milestone for an Out Island development, and we are proud that Scotiabank chose to endorse Jack’s Bay as a beacon Bahamian project.”
Jack’s Bay also announced it has received a recent investment by Eric Pike, chairman of Pike Corporation and equity partner in the Jack’s Bay project. It added that there is no existing debt or encumbrances on the property.
“By structuring a tailored financing solution and extending our local knowledge and expertise throughout the course of the transaction, we were happy to have played a role in making the project a reality. Scotiabank’s unique positioning in The Bahamas allows us to support our clients in a variety of ways on projects of all sizes,” said Gregory Stuart, head of corporate and commercial banking at Scotiabank.
“We do this by providing end-to-end financial and operating solutions, thereby allowing them to capitalise on lucrative opportunities with ease. Jack’s Bay is an invaluable and timely addition to the real estate inventory that is available in The Bahamas.”
Among the amenities already in place are existing food and beverage outlets, a 10-hole golf course designed by Tiger Woods and TGR Design, 18 partially completed residential and mixed-use buildings and a 22,000-square foot partially completed activity centre with a pool and direct beach access.
Jack’s Bay has a large number of Bahamian shareholders in its immediate holding company, Eleuthera Properties. While Sir Franklyn’s Sunshine Holdings group is the largest shareholder, its other investors include the likes of Colina, BAF Financial, the John Bull Group of Companies and Royal Bank of Canada (RBC). Besides the corporate investors, the Anglican Church has been “gifted” shares in Eleuthera Properties Ltd, while the estates of the late John Morley and Billy Lowe were also among the shareholders.
Eleuthera links to the investors are through the estates of the late Albert Sands and Whitfield Kemp. Another Eleuthera shareholder is businessman Lawrence Griffin from Governor’s Harbour, while Sir Orville Turnquest, the former governor-general, and his family - long-time investment and business partners of Sir Franklyn - are also invested. Another investor is former minister of tourism and aviation, Dionisio D’Aguilar.