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An interview with Don Robison

28 February 2011

NASSAU, Bahamas -- Don Robinson was named President of Baha Mar Resorts in early 2006, and is tasked with making Baha Mar the largest destination resort in the Caribbean. In his five years as Baha Mar president, he has seen the project go through some amazing ups and downs. The former Disney executive sat down with Casino City's Dan Igo after the historic groundbreaking to discuss the past, present and future of Baha Mar.

You joined this project in 2006. What drew you into this project?
Don Robinson was named President of Baha Mar Resorts in early 2006

Don Robinson was named President of Baha Mar Resorts in early 2006 (photo by The Zimmerman Agency)

I had worked for Disney for 33 years and I had just finished the Hong Kong Disney project. And (after a project like that) you do some soul-searching about what you want to do in the next chapter of your career. At the same time I was contacted about this project and the vision behind it. It felt a lot like the kind of Disney archive stuff. Walt believed, Walt did this. It had the same sense of vision versus this is just a development we're going to sell and flip. So there was some of that emotional attachment to it and it sounded like a good place to try and see if you could make a difference.

When Harrah's pulled out in 2008, were you worried that this project might have to be abandoned?

I think everyone was worried about the impact of a strong company, like Harrah's was, making the decision they made. So it was a little bit of a time of retrenching. What are our options? What can we do? Out of that came strategies and that led to this one with the Chinese. It kind of ended up being the best route to follow. So two years later, here we are.

So looking back on it, do you think it was a good thing Harrah's pulled out in 2008?

If we had known about the economic crisis, we (still wouldn't) know what condition the project would have been in, regardless if Harrah's was in or not. They obviously were taken over by several private equity groups. You just don't know what would have happened at the time. But the way the project has evolved, some of it luck and some of it by plan, we've got full financing. At that time we were going to start the project with just Harrah's equity contribution and then were going to get financing later to finish the project. In this case we don't have to worry about that stuff, which is a nice thing to say.

When did the two Chinese companies (China State Construction and Export-Import Bank of China) contact you about investing in this project?

Even before Harrah's had withdrawn we had gone out to bid the project in a variety of subcontracts. One of the subcontracts we were looking for was the super-structure, the core shell, the concrete steel. China State had bid on it and won the package based on their ability to do that work. Once we had to start figuring out our options China State came to us and said "if you're interested in us becoming the general contractor, we believe we can bring a financing partner to the table." And that option is what we explored. The China Ex-Im Bank came and visited the site. We started doing presentations. It was two and a half years of us going to Beijing and Beijing coming to us (and) China State helping and being involved in it (and) deciding to contribute $150 million in the project also. Each step kind of evolved into a stronger relationship that we have today.

What have been the challenges of working with a state-run corporation as opposed to working with a private company?

I'm not sure I'd break it between state and private as much as I would Eastern and Western. Working with an Asian or Chinese company is different. The negotiations are different. The style of the negotiations and the time, the relationship-building take much more importance in a Chinese negotiation than they do in a Western negotiation. Western negotiations are "get to the numbers." Chinese negotiations are "let me decide if I like you before I get to the numbers." (laughs).

What has been the local reaction here in the Bahamas over the fact you will be bringing in Chinese construction workers?
Baha Mar

Baha Mar's casino is estimated to be 100,000 square feet. (photo by The Zimmerman Agency)

I think initially… there was a lot of suspicion and a lot of discussion in the Bahamas about why, and how come, and why can't you use all Bahamian construction? Last summer we did probably 40 or 50 specific sessions with a variety of influential business leaders and explained the sheer magnitude of the construction of the project -- because most people didn't know that (or) the amount of commitments we had to Bahamian labor already. Even if we wanted to have all Bahamian construction labor, there is no workforce that's qualified to deliver this project. We made a decision along with the government to reserve about $400 million of the project's construction cost for Bahamians. And (to) specifically carve out pieces of the contract that were suitable for local Bahamian contractors that they had the skills to be able to do. And the more complicated things that they didn't have to capabilities to do haven't been bid out yet. Anyone can bid on anything. But you would predominantly believe these would be either more U.S., Chinese, European or South American contractors coming and bidding on things like mechanical, plumbing, etc.

Now onto the actual project itself. Why do you think the Bahamas can sustain two resort-type destinations? Atlantis is only a few miles down the road.

If you're considering the tourism market as it exists today it can't. But the way I look at it is, you've got another project here that's new in the market. New rooms, new product, new amenities. Guests choosing a Caribbean vacation will take another look at the Bahamas where they might have not considered it before. There is a variety of things to choose from. There are a lot of options they can pick. Our job, with the amount of destination marketing we'll do alongside with what the Minister of Tourism does, is (to create) more voices in the marketplace about coming to the Bahamas. You need to lift the tourism base in the Bahamas to make both successful. We've done that in several ways because of the brands we're choosing. Rosewood owns that luxury Caribbean niche. They have a strong loyalty program. They have their market. Morgans, with their brands, have that lifestyle, luxury, entertainment segment. And then Hyatt, with its convention business-type segment. They're going to run the convention space and they really own that convention market, which is very, very good in the U.S. This will be the largest convention center in the Caribbean. They're excited about the fact that they have the ability to bring in their corporate clients that normally stay in the Hyatt system, they just move city-to-city. This is another option for their clients, whether they're pharmaceutical companies, medical companies or whoever they do business with. Here's a great location in the Bahamas you can go to that you never had the option to do before. That's all built-in demand that doesn't exist today. They all bid on the boxes that they were selected for. They all did formal works. They know what they have to do. Two of the companies are publically traded. They have to do their own due diligence and get approval from credit committees. I think they're excited and we expect the casino operator to do the same type of work and come to the Bahamas and Baha Mar now that they know who their partners will be.

That leads to my next question. When are you hoping to get a casino contract in place?

There's a certain amount of history that we have to overcome, but the message right now is we are funded, construction has started and we have our hotel partners. Now we're in the process of going out (for casino partners). We're open to any casino operator that has an interest. Obviously it's a large casino, a 100,000 square foot casino and 1,000 hotel rooms too. Anybody who wants to be a part of this project (needs to) understand the destination, (needs to) understands that they're going to need to integrate this big resort with the other hotel partners. And if they believe this is part of their strategy, we'll talk to anyone. We're just now starting the process. We're open to anything. We have no preconceived notions. We've had some people contact us recently and said we'd like to talk to you when you're ready to talk to us. And that's just now starting.
The Baha Mar development is currently budgeted at $3.4 billion.

The Baha Mar development is currently budgeted at $3.4 billion. (photo by The Zimmerman Agency)

Do you know what is going to be offered at the casino? The Atlantis doesn't have poker. The casino here (Crystal Palace Casino) has a sportsbook. Would you guys want to have poker, sportsbook, the whole shebang?

It was originally designed to do that. The casino went through a design process with the former JV partner. The casino was designed to be really flexible. So depending on the percentage, you can do Asian gaming, you can do poker. There's a variety of flexibility the casino has in terms of slots versus table games. We have the ability to move that around. Essentially what we're asking our brand partner to do is kind of live it within the box. But within the box, there's tremendous flexibility with what the brand can do. However they manage their database, their loyal customers, their mix of games, etc.

The biggest casino project in the U.S. was CityCenter. It was budgeted at $4 billion and ended up being $11 billion after it was completed. Is it inevitable that mega-construction projects like this will run over budget, and if not, what steps will you take to ensure it won't happen as severely as it did out in Las Vegas?

I wouldn't say inevitable, but it's risky. These are very big, very complicated projects. We've done our own internal budgeting with our construction. China State has come in and done and independent review of the budgets, because obviously they have to build it. And China Ex-Im has hired their own third-party kind of audit process that has been reviewed by an independent quantity service firm. We all know we can do it. We all know it is possible. Is there a risk? Absolutely. But everyone's committed to opening this within budget and within time. It remains to be seen, but I'd like this project to be the first of this magnitude to be able to do it.

Fast forward three years from now. The project is all done and completed. If you're talking to a tourist who can go anywhere in the world, why should he or she come to Baha Mar?

The best way, for someone who has never been here, is you get to come to a Caribbean destination with great airlift, so you can probably take a non-stop flight down here. You can go in a resort that essentially is a mega-destination that allows you to customize your own vacation and you own interest levels. You can play golf, you can go to the casino. You've seen the water and you've seen the beach. We're pretty much going to have something for everybody here. And you get the ability, especially if you're from the United States where 30 percent of the population has a passport, (to get) a little bit of a sense of adventure and travel outside the U.S.. And this is a perfect destination to do so. Get that first stamp on your passport and say you're a worldly traveler. And also one of the things we're really focused on is when people travel, especially to the Caribbean, they like to know a little bit about the country -- about the art, about the people, about the culture. And that's what we're really going to try to promote from the architecture side. The artwork within the lobbies and the hotel rooms will be Bahamian art. A lot of the costumes and uniforms of the employees will have Bahamian prints. You actually feel like you've had an authentic Bahamian experience at the same time you're had the choices to do whatever you wanted on your vacation.