June 2000: Musing on business in the Caribbean
A common sight in the Caribbean is the evidence of large-scale business
investments that have failed. Some of these, such as the ubiquitous
sugar mill ruins in St. Croix and the salinas or salt ponds throughout
the southern Bahamas, reflect changing times and markets. But others
simply appear to be projects that never made it, or that made it for
awhile, and then inexplicably died. In many cases, the infrastructure
costs appear to have been appreciable, and it seems likely that many
investors didn't even recoup their capital outlay.
In George Town, Exumas, for example, there is a beautiful little resort
just north of town on the main road. It has the standard tiki bar,
a beautiful beach, tennis courts, and what appear to be very nice
accommodations. It also seems to have survived all the hurricanes,
tropical storms, and winter gales in reasonable shape. It is closed,
and we couldn't get a consistent answer as to why. It can't be that
there is no market for resorts in George Town, as several established
businesses are doing quite well, and new resorts are being constructed.
The vague explanations we got for the failure of this particular venture
involved drugs, uncertain ownership rights, and poor management, but
we're not at all sure what the real story is.
Also in George Town, there's a cut through the 50-foot high limestone
cliffs south of the harbor, forming a little lagoon inland. There
is nothing in this lagoon, yet the expense of blasting through the
cliffs to form it must have been enormous. Nobody seems to know why
this was done.
But the most remarkable example we saw was the resort of Cape Eleuthera,
where we stayed in the marina for three nights. The marina itself
boasts a large basin completely walled in by concrete breakwaters
and featuring concrete finger piers. The resort has perhaps 40 individual
cottages as well as a bar/restaurant, tennis courts, and (ready for
this?) an Arnold Palmer-designed golf course. Like many places in
the Bahamas, it has its own air strip; this one was once capable of
landing private jets. All of this is abandoned and overgrown. None
of the cottages are livable, and most of their roofs have been missing
since hurricane Floyd came through. The marina is the only continuing
part of the enterprise, and its office is in a non-air conditioned
shed with no telephone. The water pressure is intermittent, as the
pump has to be coaxed back into operation every few hours. The concrete
posts on the docks are showing stretches of exposed rebar. A Bahamian
told us that you "can still see where the greens were" on the golf
We talked with some local Bahamians, and they regaled us with stories
of what the resort was like 20 years ago. In addition to the fabulous
golf course, there was a tennis school, with Chris Evert as the pro.
On a Saturday night during the season, there would be no fewer than
three bands playing, with hundreds of people dancing. Many were people
you'd recognize from show business and high finance. Cape E was the
"in" place of the entire Caribbean.
So what happened? The local Eleutherans we talked to just shrugged
in response to that question. A white fishing captain based at the
marina claims that the first "Black Bahamian government," as he calls
it, was corrupt and venal, and basically the place got bribed out
of existence. Whether this explanation reflects the truth or the captain's
bigotry is unclear.*
The resort is owned by some Americans who are seeking financial backing
to reopen Cape E Resort. They've cut away the underbrush around the
cabins, and even promised air conditioning and a phone to the dock
master at the marina. The same outfit also owns Princess Resort at
the very southern tip of the island. This is a day stopover for the
Princess Lines cruise ships, and features lots of beach, water-sport
toys such as Sunfish sailboats and pedal boats, and little else. There's
nobody there now, because there are no cruises during hurricane season,
but during the winter it's quite busy. The ships' crews man the food
and bar facilities, so there's not much work for the local folks there.
Nothing like what Cape E once provided, in any case.
By the way, the nearby Robert Trent Jones golf course is said to be
in excellent condition, though it's not clear where the customers
come from. .