What Happened to Baccarat 
“I’ve been noticing an uptick over the past 30 days from visitors who have viewed my blog while searching for information on the Baccarat Hotel located within the Temanos Anguilla development project. Normally a story that I wrote months ago wouldn’t receive much interest day after day like this one has. It got me thinking though - what is going on with this project?
Originally announced in January of 2008, it was supposed to be the hotel component of Flag Luxury Properties Temenos Anguilla resort property. Originally to be branded as a St Regis (when the project was announced in 2004) it apparently ended up being changed to a Baccarat Hotel & Residences location. The hotel was supposed to be finished by the end of the year - but from what I’ve heard from a few locals who have emailed me, it’s nowhere near being finished (can someone update me on that fact?).
Once the initial announcement was made a website immediately went live - www.baccaratanguilla.com, and I expected to see over time additional components added to it - pictures, descriptions, condo layouts - but instead the website went completely inactive over the summer. Additionally, the BaccaratHotels.com page redirected to the main Temanos Anguilla website rather than the BaccaratAnguilla.com site. Now, the BaccaratHotels.com site doesn’t even link to or mention anything about Baccarat Anguilla. The Temanos Anguilla website now has no mention of the Baccarat branded hotel, all references to it have been removed.
What happened?
Barry Sternlicht and Robert FX Sillerman - the principal behind Flag Luxury Properties have a history of working together on projects. Barry was still a part of Starwood Hotels when the St Regis was initially announced for the Anguilla project, and they are both principals in Riv Acquisition Holdings - the company that owns a portion of and is trying to take over the Riveria Casino in Las Vegas, so its not like Baccarat and Flag Luxury had a relationship like most other developers/hotel companies.
I was all set to just write this off to another casualty of the problems with getting credit - Starwood Capital isn’t exactly going gangbusters opening up their new brands like they were initially expected too - but then I came across a comment posted to my blog earlier today which inferred that the project has financial difficulties - with the management some how misleading the property owners about some aspect of the project. (Maybe that the centerpiece component a Baccarat Hotel will no longer be a part of the development?)
So it still could be a simple issue due to the credit crisis, or it could be a more underlying issue with the way business is being conducted at the property (which I hope is not the case - since Flag Luxury is a reputable company).
No matter what the real reason is - it sounds like Baccarat is permanently out of the equation for the
We’ll see what the future holds for this property.”
Little does he know what a disaster it all is. And, it all happened long before the present downturn in the economy. It has to do with bad planning, the bane of all development in Anguilla today. Bad planning in every sense of the word. Bad management follows closely on the heels of bad planning in explaining what happened at Flag.
We shall see if this project has any future at all.
Meanwhile, the bush is rapidly growing back over the recently abandoned golf course.
This is just the tip of the iceberg. It was an overly ambitious project from day one and most people thought it was unlikely to succeed.
ReplyDeleteSad thing is, it will take a momentous effort to resurect this project once it is allowed to go fallow and deteriorate. Also, its demise sends an ominous message to potential investors.
Perhaps that area is jinxed for those who remember Merrywing.
Aside from the bigger issue of Flag and the prospects for finishing the overall project, hopefully the golf course hasn't been totally abandoned. I had been told just last month by Carl Rygg, the Club Manager, that the golf course would be open in mid-December despite the problems with the overall Temenos project.
ReplyDeleteI know Temenos construction has shut down, and Zurra will not be reopening, but it would be a shame if Anguilla also lost the Greg Norman golf course - I believe this would set back tourism on the island years. Maybe the golf course wasn't needed in the first place, but building it and then seeing it become overgrown with bush would not be a plus for the island's image.
Hopefully, somehow the Temonos Golf Club can be reopened and at least adequately maintained (maybe by encouraging play at reasonable rates?), because if totally abandoned and let go, recovering the course will cost a fortune, and the likelihood of the overall Temenos project getting eventually finished may diminish considerably.
the GOA should let the AHTA or someo the hotels form a non-profit entity to run and maintain the golf course for the good Anguilla's tourism product.
ReplyDeleteAfter all isn't some of the land leased from the Crown?
This could be a win win for the island and the developer, ensuring the property is kept up and an amenity is offered for the visiting tourists.
This isn't Venezuela or some other banana republic where some fat guy can just nationalize someone's golf course.
ReplyDeleteWhile government owns some of the land, it has been leased to Flag. Flag has certain rights. Government's response to the closing of the golf course must observe these rights. Unless you're read, understood and analyzed the lease, please don't annoy the rest of us by giving legal advice. No one in government is reading blogs, looking for your legal advice on closed golf courses.
I note this interesting comment on the Calvo website:
ReplyDeleteComment by Paul on November 25 2008:
Temenos is having financial trouble. That’s a common problem and many companies and individuals are faced with the same thing during these turbulent times. The problem is that the management has probably not been truthful with the owners and I’d like to find out who has bought so we can organize a response. Please post so I can contact you.
Calvo has now added Don's comments to the material on his website:
ReplyDelete"Little does he know what a disaster it all is. And, it all happened long before the present downturn in the economy. It has to do with bad planning, the bane of all development in Anguilla today. Bad planning in every sense of the word. Bad management follows closely on the heels of bad planning in explaining what happened at Flag.
"We shall see if this project has any future at all.
"Meanwhile, the bush is rapidly growing back over the recently abandoned golf course."
-----end of quote from Don-----
And then Calvo incites matters further with uninformed idle speculation:
"So thats the take on the project from a local. Apparently Anguilla has a history of new developments falling victim to bad planning - is it the promise of making a quick buck on a beautiful island? Or is it the government who makes it difficult for legitimate outside companies to go about their business as originally planned.
"I still find it difficult to believe that both Flag Luxury and Starwood Capital would make such a mistake and be involved with a project that has such bad planning. Flag Luxury is a company that should know what its doing, and Starwood Capital wouldn’t get involved in a shady deal..
"Since it seems as though Temanos Anguilla isn’t the only project having difficulties in Anguilla - its probably forces from within the island that’s causing the issues, which is sad since from pictures and the location - it has such great potential."
The news is that the golf course is closed. Without daily maintenance and care, the bush will surely migrate into that good soil and overtake the course in the blink of an eye. If not properly maintained daily, the cost to return it to "world class" status will likely rival that of the initial cost to build.
ReplyDeleteThe partially completed buildings were abandoned following hurricane Omar. Were they cleaned up before being left to the elements or are those buildings all sitting there with salt devouring what structural integrity they may have had? Rust does not make the reinforcing steel stronger, by the way. Again, the cost to repair or replace the damage (which increases daily) can rival that of the initial costs.
It isn't so much an issue of bad planning as it is executive level indecisiveness of which plan to follow. A single plan is all that can be followed at any one time. If todays plan is going to be replaced with another tomorrow and another the following day, then success in achieving any of the 'plans' is greatly diminished if not doomed to failure, which is where it is today.
The current economic crisis is nothing but a convenient excuse to conceal a long run of bad decisions.
Cutting the tail off of a rattlesnake changes nothing. It's still a rattlesnake and it is still dangerous. To eliminate the danger, it's the head that must be removed.
While cryptic, the answer lies in an antique quote...
"We trained hard, but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing, and a wonderful method it can be for creating the illusion of progress, while producing confusion, inefficiency, and demoralization."
Caius Petronius A.D. 66
...
Temenos is not isolated in it's failure with regards to Anguillian mega-projects, temporary as it might be. - Scotty
ReplyDeleteThe money that has been flowing into Anguilla for the last few years has given everybody a false sense of security. Car and building loans taken out, more taxis and rental cars bought (most seem to sit idle in lots), and of course, two banks just had to open huge branches in the west end.
ReplyDeleteBut all parties do come to an end.
One need only look at other parts of the island to see that even some years ago, not all was well.
The beach bar at Limestone Bay never was a sucess, the mega-mansions at Limestone still not sold.
And the prices at the restaurants kept going up because it was thought the tourist would pay anything. Already last year some of the good restaurants were not doing well. We stopped going.
But back to the golf course. It was never meant to turn a profit but rather to be an "anchor" for the development-another reason to buy a villa there.
This project was a proxy for all development in Anguilla. Its demise does not bode well for the future.
Why doesn't the owner(s) make a statement about the state of affairs of this property. This is the largest project in Anguilla, and a huge reason for so many recent changes here and they haven't made a public statement? This "thing" could blow up in "our" faces, and no one is demanding a response from the developer's. This guy in "New Jersey" writing his blog, and he can't cross the river or make phone to find out from the owner(s). Read his bio "My ultimate goal?"
ReplyDelete"To work with the hotel development team at Starwood Capital or Starwood Hotels & Resorts. Both companies are truly ground breaking firms in regards to how actions they take seem to reverberate through the industry and usually are picked up and replicated by the rest of the hotel industry. I want to put my talents and passion toward real estate, hotels and hotel development to use to continue to make those companies the best in the business. I believe in the brands that Starwood Hotel has, and I believe in the brands that Starwood Capital is creating - they are all unique and fit their own niche.
Why am I interested in Starwood Capital & Starwood Hotels & Resorts? Both firms were started by Barry Sternlicht, probably one of the biggest influences into how you see the hotel industry today. I would love the opportunity to work under him at Starwood Capital, but I would be just as happy working with Starwood Hotels - as his influence is still able to be seen today."
Question his motives!
I just had a long walk about the property, and was amazed at what I saw. First, the scale of the project is so gigantic it is hard to imagine that it will be completely abandoned. It is also much denser than it seemed in the sales pitch and at initial phases of construction. It's a small city. And it is a LONG WAY from finished. The villas were mosty glassed, but the interiors are 100% raw, with only some plumbing and electrical rough done.
ReplyDeleteIn retrospect, Temenos was a huge departure from the ethos of "old Anguilla" which valued simplicity, elegance and privacy. It is nothing less than a megaresort. Seeing all the vilas shelled, and the main hotel maybe 25% built, the beach area seems awfully small for so many people, and is going to need a lot of cleanup - it's covered with busted coral and churned up rocks.
The golf course looks as though it is being reasonably maintained, and I heard tell that Sillerman,evidently the man behind the project, and some of the "owners" who bought units, are playing golf over the Christmas/New Year's weeks.
Looking at the project now, It's got to be $500 million+ basic cost to complete, and even at $1 million a room, how profitable it could ever be is in doubt. Add in the costs of the hurricane (which perhaps could being used as a post-facto method of getting some insurance proceeds) and the gigantic carrying costs with zero revenues, and those purchase deposits could be paying interest and not construction costs.
Aside from that, a major local figure told me his bookings away from Christmas week this year are "a disaster" and he "may not make it through the year."
So, the question becomes, even if they can finish the project, is it viable for a major five-star hotel operator in this economy? What happens to the purchase contracts which probably required the hotel be run by such a company? If it becomes a Hyatt or some other second-tier resort, what happens to the values? And, where do the workers come from and where do they live (it takes 5-star rates to pay a decent wage and housing costs) and then, how do people get to Anguilla? It's not so easy now... what about if/when Viceroy and Temenos and even Fairmont open up??
Temenos and Anguilla are a beautiful idea, but lets hope they didn't simply plan too big. Why not build the first 100-200 units, and o from there? They went for all 500-600 at once - that's a big project for an isolated island!