"This was our largest project to date," McDonald says. "We
wanted to do more than make our money and move on. We wanted to have something
down there, too. We love that market. It is a very up-and-coming area with a
sound government, a good economy and the U.S. dollar as currency." McDonald
refuses to reveal how much he paid for his condominium, which he purchased with
his partner in ProNet. Prices for condominiums at Molasses Reef begin at about
$2.5 million and range up to $5 million.The Molasses Reef site rests on West Caicos, an island the size
of Manhattan that local authorities claim will remain largely undeveloped save
for the resort and its impressive facilities, which include a marina deep enough
to accommodate large yachts. The resort will feature a 125-room boutique hotel,
two restaurants and a full-service spa, plus beachfront condominiums and private
homes. As with many such projects, condominium owners can add their property to
the hotel’s rental pool to generate income. McDonald says that less-experienced investors, such as his
athlete clients, often welcome the opportunity to invest where they can
literally see their money at work. "A lot of investors we have own a couple of
homes and understand real estate is a tangible asset," he says. "They go down
and see the project and like seeing the hotel come out of the ground. It is
really exciting to them and is a learning process for life after football." Sillerman, however, has spent years and dollars learning
firsthand the challenges of Caribbean development. When he first began visiting
Anguilla, the island had no hotels. When a small hotel was finally built, the
general manager and owner clashed. Sillerman joined a handful of hotel regulars
to finance the general manager’s plans to build his own hotel. That property,
Cap Juluca, has become a sold-out hot spot for the Caribbean cognoscenti. But
Sillerman says it turned out to be an unimpressive investment, although he
declines to discuss the details of its performance. BY ANY OTHER NAME
Slated to open in fall 2008, the high-end resort Molasses Reef on West Caicos will be
operated by Ritz-Carlton, although the company will downplay its famous marque.
"The top 1 percent of travelers don’t really patronize the chains," says Andy
Wimsatt, chief development officer of Molasses Reef. "Even the Four Seasons or
Ritz-Carlton is sort of pedestrian in the highest segment." Although travelers
may shun brand names, they often insist on the reliable service associated with
established companies, Wimsatt says. "It creates a feeling of longevity and
consistency that the company is not going to go out of business." —LK |
"It was like the blind leading the blind," Sillerman says,
amused at the recollection. "It never really achieved what it could. It was
undercapitalized and operated by people, including myself, who didn’t know what
they were doing." He moved on to build a trio of white villas he still uses for
family and friends—and sometimes rents out to guests. He never planned to turn his family’s vacation refuge into a
business proposition. But flush with cash from his SFX deal, Sillerman followed
the advice of his financial advisor and looked into investing in high-end
hotels. His existing villas will become part of Temenos. Along with
golf, the resort will feature a boutique hotel, private homes and
condominiums—much more than Sillerman originally planned. Anguilla’s government,
he says, has been careful about protecting its most important asset—the island’s
natural beauty—by controlling growth. When he approached officials with plans
for his golf course, he was told he could build it only if he also developed a
luxury hotel and world-class real estate development with it. Although Sillerman liked the proposition, he had neither the
time nor inclination to manage such a Herculean project, because he was
simultaneously pursuing other business opportunities. In 2005, he acquired a
controlling interest in the estate of Elvis Presley, and last spring he paid
Muhammad Ali $50 million for an 80 percent stake in the famed pugilist’s name,
likeness and image. Sillerman also owns the company that produces the television
show American Idol. So he partnered with an experienced high-end hotel developer, New
York-based Flag Luxury, to design and build the property. He also partnered with
Starwood Hotels & Resorts, which will operate Temenos under its St. Regis
banner. Sillerman owns about 70 percent of the resort. His trio of villas, which
has been highlighted in design magazines, serves as a model for the 286-acre
compound. Even while his resort takes shape, Sillerman is building
elsewhere. He is developing another private estate—on Anguilla, naturally—only a
chip shot away from his new golf course.
Louise Kramer is a freelance writer based in New
York.
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