Defaulted Anguillan resort thrown a lifeline

THE VALLEY, Anguilla, Wednesday December 15, 2010 – The 275-acre Temenos Anguilla, which went into receivership in February, has found a new financial backer to bail it out.

According to reports from Bloomberg, Cypress Equities Inc., the private- equity firm tied to Dallas Cowboys star Roger Staubach, plans to take over the unfinished resort after developers including Robert Sillerman, founder of American Idol owner CKX Inc., defaulted on their loans. 

Cypress has reportedly signed a binding accord to acquire Temenos Anguilla out of receivership by purchasing its debt at a discount. The Credit Suisse Group AG had arranged US$180 million of loans, according to a 2006 statement. When the resort went into receivership in February it reportedly needed another US$125 million to finance its completion 

The luxury property, which was to feature a 32-room hotel, 78 villas, beachfront views of St. Martin and Anguilla’s only golf course, would be the latest troubled resort on the island to go to a private-equity firm as lenders unload distressed debt. 

Barry Sternlicht’s Starwood Capital Group planned to take control of the Viceroy Anguilla, a 35-acre resort with 3,200 feet of beachfront and an 8,000 square-foot spa, after purchasing that development’s loans in October. 

“Lenders who are now in control don’t have the appetite to manage or finish building these large resorts,” said Ben Thypin, an analyst at Real Capital Analytics Inc. in New York, adding that values for hotels and resorts may have bottomed out. “Private-equity firms are willing to get their hands dirty as long as they get in at a low price,” he said. 

Completion of the Temenos deal is subject to government negotiations to revise the development plans, according to Jeff Woolson, a managing director of CB Richard Ellis Inc.’s Golf & Resort Group who is handling the sale. The Mediterranean-style whitewashed resort has 4,500 feet of beachfront along Anguilla’s southwest shore. 

Temenos’s original developers, including Sillerman, 62, completed its Greg Norman-designed golf course and clubhouse and built most of 59 residential units before defaulting in 2008. The rest of the resort is unfinished or not started, including a 32-unit condominium-hotel and spa, 45 planned villas and estate homes and 14 acres of additional land. 

“This is a challenging project in a difficult time,” Sillerman said in an e-mailed message, adding that he invested more than $200 million in the development. “I hope, for everyone’s sake, that the government of Anguilla recognizes the obstacles Cypress faces, and that Cypress maintains their enthusiasm for the project.” 

The island’s government prefers more hotel accommodation and fewer residences than the original development plan agreed with Flag Luxury Properties (Anguilla) LLC, according to Woolson, who is lead broker selling the property with Dominic Murray at Smiths Gore BVI, according to the website listing. Several residential buyers have already acquired separate titles and are completing their vacation homes, Woolson said. 

“The biggest thing that needs to be accomplished is the negotiation of the memorandum of understanding with the government of Anguilla, which is going on right now,” he said. 

Cypress Equities, an affiliate of SRS Real Estate Partners, is developing more than $2 billion in property, according to its website. Royal Island, a private island in the Bahamas with 15 miles of coastline featuring an 18-hole Jack Nicklaus Signature golf course, is among the firm’s developments. 

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