Such a shame that so many great projects are gathering dust on the shelves of so many Developers and Landowners who are losing hope of them ever moving forward. IMG_3115

Billions of dollars of financeable projects sitting there waiting to be financed in various stages of completion and not going anywhere while the solutions are visible to the naked, experienced eye in a matter of hours.

We know because our eyes are naked and experienced and we conduct triages on resort developments.

They are not ‘sick’ or ‘injured’ due to malicious or wicked intentions, they are more often projects for which sequencing was not taken into account. Sequencing is not necessarily the phasing of the project although that is eventually an important factor. It is more about the sequencing of the planning that ultimately leads to financing. Too often, brains have been blown out by spending too much on the wrong things until the financing is in place.

They are almost dead in the mind of the developers because they have exhausted every avenue available to either find a partner or a lender without any luck. Some of the interested parties have encouraged the developer to spend additional monies to support the investment or loan only to go silent when the proof is not conclusive. They are injured in the minds of the investors or lenders because the details finalized do not line up with the aspirations of the project.

There are thousands of details that go into Resort Development and the enthusiastic developer without experience may rush into the project surrounded by experts who approach the project with the best of intentions but without the development experience that would have rationed the consultants input only to the actual requirements for financing. The details should be dealt with in a sequence that includes the complete financing of the development’s planning, execution and opening and, as a rule of thumb, not a penny should be spent that is not directly connected to financing.

Here are some of the more interesting but fairly frequent causes of sickness or injury in a resort project,

  1. Land. Elaborate plans developed on land that is not yet owned.
  2. Development Company ‘team’ made up of outside consultants only.
  3. Single minded, inexperienced Developer with no capacity for listening.
  4. Full design detail architectural plans developed without brand involvement or previous brand experience.
  5. Budget for hard & soft costs only……. but none for development, financing or other expenses.
  6. No plans for financing (equity & debt, sources and detailed uses……. and detailed timing of phases.
  7. Feasibility or Valuation Study done by a local consultant unknown to the lending community.
  8. Inexperienced team with limited or no experience in similar projects.
  9. Business Plan completed by a specialist for another industry.
  10. Glowing letters of worthless support from government officials.

As one of the Doctors in our Emergency Room at Axis Hospitality, this is typically how we ‘triage the project’ usually precipitated by a short e-mail call for assistance.

  1. Telephone conversation about the project with the Principal Developer, elaborating on its status, their achievements and their perceived needs.
  2. A review of all the available documentation (eg. plans, development company details, plans, budgets, operators etc)
  3. Analysis of the actual status and determination of their immediate Planning needs.
  4. Calculate the missing parts of the plan, determine the likelihood of success and the timing.
  5. Discussion on recommendations and agreement on way forward.

Most resort developments that have either been injured or are comatose, can be resuscitated and most will not need to dilute the equity of the existing shareholders.

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