CASINO

Baha Mar faces further delays due to undelivered lounge chairs

TAGs: baha mar, Bahamas

baha-mar-delay-lounge-chairsStop us if you’ve heard this one, but the Baha Mar resort casino in the Bahamas could face further delays in completing its oft-delayed construction.

The $4.2b Baha Mar held its soft-opening in April, although it didn’t begin accepting hotel reservations for another month and only one of the property’s planned three hotels is actually ready to accept guests.

Other non-gaming amenities of Baha Mar also remain unfinished and Baha Mar’s principal contractor China Construction America (CCA) is now warning that a dispute with a US-based supplier could cause CCA to miss the government-mandated October 15 deadline for the “substantial completion” of the project.

On Monday, the Bahamas Tribune obtained legal filings in which CCA accuses a Florida-based supplier of “commercial extortion” due to its refusal to fork over 1,420 lounge chairs, representing 50% of the total number of chairs the Source Outdoor firm was contracted to deliver.

Source Outdoor apparently believes its obligation to deliver the second batch of chairs was rendered moot by the Chapter 11 bankruptcy filing of Baha Mar’s original developer, Sarkis Izmirlian’s Baha Mar Ltd, in 2015. Chinese conglomerate Chow Tai Fook Enterprises (CTFE) inked a deal last December to take control of the project from the property’s largest creditor, the state-owned Export-Import Bank of China (EXIM).

The bankruptcy restructuring put an emphasis on paying debts that Baha Mar Ltd owed to Bahamian creditors, leaving companies like Source Outdoor out in the cold. CCA’s filing says it has no obligation to honor Izmirlian’s debts but claims Source Outdoor is obligated to deliver the chairs regardless.

CCA’s filing accuses Source Outdoor of “apparently trying to collect money owed to it” by selling the chairs that were to go to the Bahamas to other buyers. CCA says this “malicious and insupportable conduct” is intended to “coerce CCA to pay the debts of Baha Mar Ltd.”

The legal squabble led CCA to warn that failure to receive the chairs by the October completion deadline – when the second of Baha Mar’s three hotels is scheduled to open – will result in CCA facing fines of $150k per day for the first month of delay, rising to $250k for every day thereafter that Baha Mar isn’t finished.

In an even worse scenario, the delay could also complicate CTFE’s deal to acquire Baha Mar, which won’t technically be official until construction of the property is deemed to be complete.

Some local observers have expressed skepticism at CCA’s claims, wondering how the absence of lounge chairs could delay a $4.2b resort. As a former president of the Bahamian Contractors Association told the Tribune, “you can go down to CostCo and buy [chairs].”

The current BCA president, Leonard Sands, said the hyperbolic tone of CCA’s legal filing suggested the contractor knew it was likely to miss the October deadline, yet lacked “a legitimate argument” for doing so, hence the need to identify a scapegoat, no matter how implausible. But honestly, it’s at this point that you start to wonder if the cursed Baha Mar project is built on the site of an ancient burial ground or something.

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