Home News Local news YACHT HAVEN TO CHANGE OWNERSHIP AGAIN

YACHT HAVEN TO CHANGE OWNERSHIP AGAIN

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March 5, 2003 – The derelict Yacht Haven Hotel and Marina, thrice sold in the last six years, is on the verge of another transfer of ownership. But the change, a corporate acquisition of the parent company of the current owners, won't affect plans for rebuilding and expanding the property, say executives of company that now owns it.
Andrew Farkas, chief executive officer of Insignia Nautica, the current owner, said in a Wednesday release that Insignia Financial Group Inc. on Feb. 18 "entered into a definitive agreement to be acquired by CB Richard Ellis, a Los Angeles company, in a transaction valued at $415 million." Insignia Financial Group is the parent company of Insignia Nautica.
Elie Finegold, executive vice president of the New York-based Insignia Nautica and chief executive of Insignia Financial Group, said Wednesday afternoon that the proposed sale "in no way affects plans for the Yacht Haven development."
Farkas said the agreement is subject to several conditions, including government approvals, CB Richard Ellis's finalization of financing, and the approval of Insignia's shareholders. "If all goes as planned, the transaction is expected to be completed in June," he said.
Insignia Nautica's plans for a new hotel/office complex, marina and public park at the site of the old Yacht Haven Hotel and on adjacent property received praise from an environmental watchdog group Monday night at a St. Thomas Coastal Zone Management Committee public hearing. The CZM committee will decide on the three necessary permits at a March 13 meeting. (See "Yacht Haven environmental report wins praise".)
Insignia Nautica acquired major interest in the Yacht Haven property last July from the Chicago-based PRM Realty Group. PRM, which retained a minority interest, had purchased it from Malaysian investor Tan Kay Hock in 2000 for $8.5 million. Tan had bought it from the Bank of Nova Scotia in 1997 for about $5.5 million in a bankruptcy sale two years after the property, a onetime Sheraton hotel, was devastated by Hurricane Marilyn.
In February 2002, 18 months after PRM bought the hotel-marina property, its subsidiary PRM Caribbean signed a lease with The West Indian Co. for the adjacent seven acres of Long Bay land. WICO said at the time said that PRM's plans were for a "mega-yacht marina, hospitality and retail establishments" and a "public promenade," along with "the beautification of the adjacent Housing Parks and Recreation property for the creation of a public park."
According to a Feb. 18 release from CB Richard Ellis announcing the planned acquisition of Insignia Financial Group, "Upon completion, the transaction would create a real estate services company with revenues exceeding $1.8 billion, 16,000 employees in 47 countries and market leadership positions in … New York, Chicago, Los Angeles, London, Paris and Hong Kong."
The acquisition would make CB Richard Ellis the world's largest commercial property manager with a combined portfolio of nearly 850 million square feet. Based on 2001 activity, it would generate $90 billion in annual sales and leasing transactions, and conduct $32 billion in capital markets transactions, including property sales and mortgage banking.
To finance the transaction, CB Richard Ellis will receive a cash contribution of up to $145 million from Blum Capital Partners, the Wednesday release states. The company has also received a commitment from Credit Suisse First Boston for necessary debt financing.
Richard Blum, chair of Blum Capital Partners, said: "This management team continues to deliver strong performance — which we know will be further enhanced by the combined enterprise. Blum Capital is pleased to provide the equity capital for the next stage of growth for CB Richard Ellis."
Ryan Chittum, writing in The Wall Street Journal on Feb. 19, cautioned that the proposed acquisition may face problems. "Some analysts said the companies could face pitfalls that may make the deal less attractive," he said. He quoted Will Marks, an analyst with JMP Securities in San Francisco, as saying that "merging two brokerage offices in any one city is very difficult, and there is bound to be fallout." Marks wondered whether "one plus one will equal two, or whether there will be a flood of broker departures."
Farkas said in the Feb. 18 release that the transaction will be a winning one "for Insignia's shareholders, clients and employees." Farkas will shepherd the transition as CEO through the June closing.

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