The Atlantis resort on Paradise Island is a symbol of economic prosperity, growth and wealth for The Bahamas. The luxury resort, which opened its doors in the early 1990s, came at a time when the country was struggling financially and needed a beacon of hope to guide it to economic stability.
When Sol Kerzner, hotel mogul and chairman of Kerzner International, opened the hotel in 1994, the country was in recession and experiencing a low point in its tourism performance. He was almost single-handedly responsible for the revitalization and expansion of the tourism sector.
The Bahamas owes a great debt of gratitude to Kerzner. However, current anxieties over the future of Atlantis are due to the fact that the nation had ignored the wisdom of its grandparents - don't put all your eggs in one basket.
Nearly two decades after Kerzner bought the Paradise Island property, and several expansions later, the future of the mega-resort is unclear. Kerzner recently defaulted on a $2.5 billion loan held by creditors overseas. The Atlantis resort, One&Only Ocean Club and Kerzner's Mexican holdings were collateral for the loan.
A group of senior lenders who are owed $112 million out of $2.5 billion went to court in Delaware and argued that minority lender Brookfield Asset Management was getting an unfair advantage, in regards to the debt-for-equity deal.
Brookfield pulled out of the deal just over a week ago after Judge Donald Parsons granted the lenders a temporary restraining order and questioned why the Toronto-based asset manager, as the most junior of the seven creditors, should be the only one to benefit from equity ownership of the "uniquely valuable" Paradise Island resorts.
The collapse of the Brookfield deal compounded fear and speculation of possible job losses and foreclosure at Atlantis.
However, at a recent press conference last Wednesday, Prime Minister Hubert Ingraham reminded reporters that when he came to office in 1992 Resorts International on Paradise Island was in bankruptcy.
"We did not panic in The Bahamas at that time. When Kerzner came in he bought it out of bankruptcy," he said.
Atlantis has five percent of The Bahamas labor force on its payroll.
It's a frightening number when you take into account that if it were not for the impending opening of the Baha Mar resort on Cable Beach, there would be no other entity, government or private, that could support these jobs.
This is a fact that never sat well with many people.
"First of all, I was always concerned about Atlantis being there and hiring up to 7,000 to 8,000 at one time in any country," said Leon Griffin, president of the Bahamas Taxi Cab Union.
One private employer holding the fate of all those employees in its hands is a recipe for disaster, Griffin said. "That is certainly dangerous what could happen or might happen. That has been my fear all the while [with] Atlantis and Baha Mar. I [have said] to government to be very cautious. I would prefer that kind of investment divided into four or five sections around The Bahamas.
"It's very scary because it's our leading destination - I'm hoping for the best," Griffin said.
He added that Atlantis accounts for at least one third of taxi drivers' business. "The airport is considered an important area, then Atlantis/Paradise Island, then downtown and Cable Beach. If they close down, we might as well forget it. I hope every Bahamian, even if he doesn't work in Atlantis, will pray that things go well," he said.
For each of the 8,000 direct jobs at Kerzner there are an additional 1.25 to 1.5 indirect jobs in the economy. This means 18,000 to 20,000 jobs or 15 percent of all jobs in our economy, are related directly to the operations of Kerzner International in The Bahamas.
In addition to the jobs it supports, Atlantis' additional contributions to the Bahamian economy from Kerzner's operations include:
Local purchases of goods and services - $190 million annually; Electricity consumption of the order of $47 million paid annually to BEC; Business license fees - nearly $27 million annually (inclusive of resort hotel license fees and licenses for joint venture time share and condominium operations); Room occupancy tax - $20 million annually.
As far as The Bahamas is concerned, Atlantis is too big to fail.  Ingraham has said that at the moment there is no need for concern as a foreclosure would not be in the best interest of Kerzner or his creditors.
"The lenders themselves would like to collect their money back. In order for them to collect their money back, it is important for Kerzner's property on Paradise Island to be successful," he said.
It is hard to shake the feeling that some of this wound is self-inflicted.
Ingraham said he believes that responsibility for this current predicament rests with the former Christie administration.
Kerzner International now has a loan for $2.5 billion and the security for the loan is the properties on Paradise Island. Much of the loan was spent outside The Bahamas.
"It was inappropriate and wrong for the Government of The Bahamas (Christie administration) to agree for the properties on Paradise Island to be put up as a security for a loan where the proceeds of the loan were going to be spent outside The Bahamas.  That was a big, big mistake," Ingraham said.
The whole situation also raises the question of whether The Bahamas has sufficient laws and regulations to protect itself against the failure of a major employer.
Raymond Winder, managing partner of Deloitte and Touche Bahamas, said that because of the lack of bankruptcy laws and regulations similar to the U.S., any creditor could put Kerzner into receivership.
"We don't have a situation that would allow an organization in financial distress to be able to ward off creditors and others who would seek to take advantage of the organization and allow it to go through a process of reorganization," he said.
However, Winder said he remains optimistic that a few months from now things will not be as dire as they are now.
"I don't anticipate that it's going to be protracted because clearly Kerzner in order to continue [to] meet its obligation and being able to present a positive face to the international community needs to have this resolved," he said.
While the future may, for the moment, be cloudy, there is still a bit of hope on the horizon.
Kerzner officials and the government have said bookings are getting better and Ingraham has said the government does not expect there to be job losses at the Paradise Island property.
Winder agrees.
"If they say bookings are strong and looking up, then you would know the odds of there being significant reduction of employees are slim in the short term," he said. "Obviously one can't speak of a year from now when one looks at Florida maybe granting full licenses to casinos. In the short and medium term Kerzner appears to have no reason to lay off staff.
"I also do not believe Atlantis has a considerable [number] of non-productive employees that any investor has to get rid of.  In any business operation, clearly if there's a significant decline in revenue then a business will have to make an adjustment," Winder said.
However, President of the Bahamas Chamber of Commerce Winston Rolle said while Atlantis reports that bookings are up, Bahamians should be concerned about Atlantis' debt crisis.
"One of the things we also need to be mindful of, we talk about bookings but what are the rates? [We are] already subsidizing air travel to get people here, so are we booking rooms at reduced rates to get the numbers up? We have to look at booking quality not just quantity," Rolle said.
"The magnitude of Kerzner going into a recession impacts all of us, impacts all we do, the amount of government revenue through casino tax, NIB, import tax on goods they bring in, departure tax from tourists that affects government's revenue and if that goes down the government has to look at what social program to cut back on. It's very widespread."
Despite all of the assurances and prognostication, no one knows precisely what these seven lenders are going to agree to. At the moment, the property is still owned by Kerzner and no jobs have been lost.

Click here to read more at The Nassau Guardian