The Christie administration remains committed to the so-called "anchor project" model of foreign direct investment (FDI).
Minister of State for Investment Khaalis Rolle told Guardian Business that, despite the problems with some of the high-profile "anchor projects," the model itself is fundamentally a sustainable one.
The model operates like this: An investor agrees to build a resort, supported by a second-home or some other real estate development. The government sells the investor the land, which the investor would then use as collateral together with a heads of agreement from the government to raise capital to build the resort. In many instances, the developer intends to use the money raised from presales on the real estate side to fund the resort development side (Rum Cay Resort Marina, for example, followed this model).
The high-profile collapse of the multibillion-dollar Ginn project in West Grand Bahama and the struggles Baha Mar experienced following the global recession in 2008 raise questions about the fragility of anchor projects as an economic model. Emerald Bay, the Rum Cay Resort Marina, the I-Group project in Mayaguana and other anchor projects have all experienced difficulty in performing to expectations.
Still, Rolle said the administration is confident in the system.
"I believe that [the anchor project] is a sustainable model, and I'll tell you why," he said. "If you look at [it], during the recession, many of these properties that didn't perform well, didn't perform well because they were leveraged in the first instance, but the funding source globally dried up.
"During the recession, Baker's Bay was heralded throughout the Caribbean and the United States as one of the most successful developments in the Caribbean. They were recession-proof."
He said the Albany development in southwest New Providence has the same model and is as successful as Baker's Bay.
"They carry no bank debt on the business," he said. "The development has been financed by the developers. And if you use it as an indicator of success, they are now onto phase two. They've broken ground. They've started construction on phase two."
"So I don't believe that there are fundamental challenges with that model. With any model you will have some challenges, and you're not going to find success with every individual property."
He also pointed to Exuma, where Sandals took over development of the former Four Seasons at Emerald Bay resort. In 2012, Sandals Founder Butch Stewart acknowledged that high operating costs, including high utility costs, a shortage of trained workers on Exuma and limited airlift nearly forced the resort to close its doors.
Rolle said the resort is now "doing extremely well".
"So well that they are now looking at developing a new airport" he added.
"So the [anchor project] philosophy is correct."

Click here to read more at The Nassau Guardian