10/25/07

By VERNON CLEMENT JONES, Senior Business Reporter

vernon@nasguard.com

The developer behind the controversial Baker's Bay project is attributing an increase in the number of "For Sale" signs in the neighboring settlement to price speculation and not residents worried about environmental fallout.

"We drive through the community and have seen the number of For Sale signs," said Steve Adelson, senior VP for Discovery Land Company. "We believe that our development will substantially improve property values here.

"People see us coming and see the opportunity to capitalize on it."

That may well be.

Guana Cay residents as well as realtors working the small Abaco island are all taking note of a growing number of houses being placed on the market. Where a difference of opinion emerges is on possible reasons for that increase.

Adelson argues that Discovery's other developments — for the most part strung across the U.S. — have spurred property value hikes of anywhere from 15- to 150-percent in their respective resort communities.

Large-scale developments across the Bahamas have, themselves, encouraged spikes in property values as both workers move in to service the resorts and second-home buyers rush to scope up nearby properties. Their goal is to piggy back off the slew of amenities and infrastructure upgrades that come part and parcel with the projects. Not far behind that madding crowd — and often ahead of it — are property speculators hoping to buy low and sell high to another wave of developers looking to move into the expanding economy. The Four Season in Exuma has perhaps led to the most striking example of this phenomenon.

But Guana Cay is a different situation, argue opponents of the mixed-use Baker's Bay project.

"Many of the people who I represent are so disgusted they are selling up," said Fred Smith, attorney for the Save Guana Cay Reef Association. That protest test group is leading the charge against Adelson's development, although has been unable to keep it from obtaining all the requisite government approvals needed to see Baker's Bay through to its scheduled completion in five to seven years. "They (residents) are leaving because the very thing that Baker's Bay is claiming to promote is being destroyed."

Smith points to, among other things, the island's mangrove swamps and the surrounding barrier reef system just off its shores.

Adelson and, indeed, the government's own investigators beg to differ, charging that they have moved to protect the fragile ecosystem at the same time working to deepen the local economy with more than a hundred new jobs.

Smith, himself, is prepared to acknowledge that the Discovery Land development will ultimately lift home values across the small community, but is quick to discount any suggestion that residents are now moving to cash in on that unfolding prosperity.

"It doesn't make sense to sell now," said the activist attorney. "If they were really selling to capitalize on rising property values wouldn't they wait until the development is completed, until prices rise (even further)?

At a news conference Wednesday, Adelson laid out the timeline to bring the project to fruition. While work on the marina, and the necessary dredging, is due to wrap up next year, final build-out of the complex, including its marina village, inn and residential lots, won't conclude for another five to seven years.

The large window affords both Smith and Adelson plenty of time to test their duelling theories.Just how quickly those houses coming onto the market are picked up may indicate into whose camp the buying public falls.