THE COVE ELEUTHERA ISLAND THE BAHAMAS - · PDF file ·...

THE COVE

ELEUTHERA ISLAND, THE BAHAMAS

TRAVELS THAT CONNECT YOU.

UP SOUTH RESORTS & HOTELS - THE COVE ELEUTHERA 2UPSOUTHRESORTS.COM

Up South Resorts & Hotels1521 Alton Road #278Miami Beach, Florida, USA 33139

Flying Teeth Boutique Sustainable HospitalityP.O. Box 12762 #385 West Bay Shopping CenterNassau, The Bahamas

Mike Hartman305 586 9742 242 357 8458 [email protected]

www.upsouthresorts.comwww.flyingteeth.com

mailto:[email protected]


http://www.upsouthresorts.com


http://www.flyingteeth.com


Confidentiality

This summary packet is being provided on a confidential basis and is intended strictly for use by a limited number of interested parties for the sole purpose of determining potential interest in pursuing a transaction with Flying Teeth Corp (hereinafter the “company”). By accepting this summary packet, recipients agree to keep confidential the information contained herein or made available in connection with any further investigation of the company. each recipient agrees to treat it in a confidential manner and not directly or indirectly to disclose or to permit its advisors, agents, or affiliates to disclose any such information without the prior express written consent of the company.

This summary packet has been prepared on the basis of information furnished by the management of the company.the company and its personnel expressly disclaim any liability for damages, direct, special or consequential, arising out of or related to this summary packet or omissions there from, or any other information provided in writing, orally or otherwise regarding a potential transaction.any party considering a transaction with the company agrees to look solely to its own due diligence and any representations, warranties and/or covenants set forth in a fully executed, definitive written agreement with the company relative to the transaction.

Any estimate, forecast or projections as to the future events are based upon the assumptions stated herein and the judgment of the management of the company are believed to be reasonable as of the date of the documents. however, no assurance can be made as to the achievement of these estimates, forecasts and projections. statements made in the summary packet are made as of the date hereof, unless stated otherwise, and neither the delivery of this summary packet at any time, nor any subsequent investment in the company, can under any circumstances create an implication that the information contained herein is correct as of any subsequent time.

By receipt of this summary packet, prospective investors agree to the terms and limitations set forth herein and recognize and accept the need to conduct their own thorough investigation and due diligence Before considering an investment in the company. recipients should not construe the contents of this summary packet or any prior or subsequent communications from the company as legal, investment or tax advice. each investor should consult his/her own competent counsel, accountants or business advisors as to legal and related issues concerning his/her purchase or investment. neither this summary packet nor its delivery to any party constitutes an offer to sell or the solicitation of an offer to buy any securities.the company reserves the right to negotiate with one or more prospective investors at any time and to enter into a definitive agreement with an investor without prior notice to other prospective investors.

Disclaimer

This is a conceptual offering only. All information is prepared for preliminary business and land & asset planning purposes.



The Cove Eleuthera - Financial Features Summary - Most Likely ScenarioStabilization Year Summary & Ten Year Exit Summation - Projected

Acquisition Price (estimated to include taxes)Acquisition Price (estimated to include taxes)Acquisition Price (estimated to include taxes) $ 2,262,000

Development Capital Needed (projected) $ 2,741,675

Total $ 5,003,675

Financing: Debt $ 0

Financing: Equity - Cash $ 5,000,000

Operating Scenario Summary Stabilization Year

(Year Four) Exit Year (Ten Year Totals & Averages)

Rooms Operating 25 25

Average Annual Occupancy 65.4% 66.3%

Revenue Per Available Room $ 305 $ 326

Average Daily Rate $ 312 $ 315

Total Revenue $ 2,783,388 $ 29,337,121

Total Cost of Sales $ 493,301 $ 5,416,663

Gross Profit $ 2,290,087 $ 23,920,458

Total Operating Expenses $ 1,193,098 $ 12,867,305

Operating Profit $ 1,096,990 $ 11,053,153

Margin of Profit 39.4% 34.8%

Free Cash Flow (Accrued) $ 1,139,888 $ 7,783,731

Projected Earnings After Year Ten Asset Sale $ 17,894,824

Projected Annual Ten Year Internal Rate of ReturnProjected Annual Ten Year Internal Rate of ReturnProjected Annual Ten Year Internal Rate of Return 36%

Executive Summary & Quick Fact Sheet

The Cove Mission Statement: To consistently, profitably and sustainably deliver an authentically Bahamian vaca-tion experience that positively reflects the culture and environment in which it is developed and operated.

Just beyond The Bahama Banks’ infinite stretches of gin clear water and white and pink sand beaches lies The Cove – what will be an authentic 25 room hotel to be redesigned to fit both the environment and culture of this highly sought out Bahamian isle. This timeless boutique hotel, nestled within the idyllic Eleutheran set-tlement called Gregory Town, will offer a transformative vacation experience through service and culture within accommodations providing comfort and style. As part of the Up South Resorts & Hotels collection, The Cove will be the group’s first and flagship property and will house a full-service food and beverage facil-ity designed and operated with corresponding levels of sophistication, sustainability and authenticity.

Location: Gregory Town, Eleuthera Island in The Bahamas

25°23'58.35"N by 76°34'26.45"W

Total Acreage: +/- 28 Acres (22 Acres remain undeveloped with significant ocean views)

Total Waterfront: Over 1,500 feet with a private 250 foot beach.

Airlift: A 20 to 25 minute drive from North Eleuthera Airport (ELH)

Existing Unit Count: 25 Keys

Current Room Pricing: $245/n to $995/n

Current Property Description: “The perfect intersection of Bahamian style and American comfort, The Cove’s 25 units are built with style with coral accent walls, vaulted ceilings, luxurious bed linens, white tile floors, and ocean views, but no phones or TVs. Glass cube shower stalls add a quirky touch. The accommodations scatter down a hillside that slides into the ocean at a toasty sand beach suitable for swimming, kayaking, and sipping rum at the new tiki bar. The main house, restaurant and pool overlook the beach and the one on the other side of the rocky hill, more secluded and better for snorkeling.” – The Bahamas : A Great Destination by C. Walton

Current Website: www.thecoveeleuthera.com

Existing Accommodations: • Twelve One-Bedroom Rooms (positioned within 3 different garden view buildings) • Nine One-Bedroom Suites (positioned within 5 different ocean view buildings) • Four Two-Bedroom Suites (positioned within 3 different ocean view buildings)

Existing Amenities: • Full Service Restaurant & Bar • White & Pink Sand Beaches • Outdoor Pool & Tiki Bar • Bicycles • Tennis Courts • Fitness Center • Kayaks • Snorkel Gear

Existing & Potential Activities: • Queen’s Baths • Surfer’s Beach • Elvina’s Nightclub • The Caves • Preacher’s Caves • Snorkeling, Diving & Kayaking


http://www.thecoveeleuthera.com

http://www.thecoveeleuthera.com

Google Earth Photo: Florida / The Bahamas


Google Earth Photo: Nassau / Eleuthera Island


Google Earth Photo: The Cove - Near the Settlement of Gregory Town Eleuthera


Gregory Town

Good Earth Photo: The Cove - Property Outline (rough)


Aerial Photograph of The Cove - Building Layout (rough)


Sunset at The Cove Eleuthera - A daily event

The Cove - Eleuthera: Project Synopsis

Island breezes.

Azure waters.

White and pink sand beaches.

Funky seaside village rhythms.

Wave -lapping tranquility lightly punctuated with a Bahamian vibe.

This is Eleuthera – The Isle of Freedom .

Welcome to The Cove.


Strengths and Attributes

The settlement of Gregory Town on Eleuthera Island in The Bahamas provides a significant opportunity for an effectively operated boutique hotel property. Attributes that make this an ideal location for a full-service hotel operation include:

1. Access & AirliftThe North Eleuthera Airport, a brief twenty-five minute taxi ride from The Cove and the same air-port which serves the popular Harbour Island, is serviced by three international carriers providing direct flights daily from the U.S. (Miami & Fort Lauderdale), as well as three domestic carriers provid-ing eight flights daily from the nation’s capital city of Nassau. Additionally, Eleuthera Island has two other international airports should the abundance of flights into North Eleuthera be insufficient.

2. Trained and Skilled LabourA significant portion of the labour pool for the famed and star-studded Harbour Island with its myriad of upscale boutique hotels, restaurants and rental homes resides in North Eleuthera.Because they must travel by ferry each day to get to work, we are confident that a majority of these persons would gladly accept positions with The Cove and remain “on island” if provided with a competitive salary and working conditions (which we will not only provide but surpass).

3. Seizing Market Share - Harbour IslandNo matter how well we garner international attention for our sustainable methods, our transforma-tive travel experiences or our breathtaking location, given the current challenges facing the tourism industry worldwide, we would be hard-pressed to convince anyone that we can exclusively “create” market share. However, we are confident in our ability to “seize”some market share within the exist-ing Harbour Island / Eleuthera market. The given price points and challenges created by the growth and demand of this world-famous destination provide us an extremely lucrative opportunity. With proper marketing and presentation, we can offer an exceptionally appealing vacation experience with a plethora of upsides at a far more competitive price.

4. Location, Location, LocationThe Cove’s location in Gregory Town, Central Eleuthera has it all – white and pink sand beaches, az-ure waters, quaint architecture and culture, a rich history and an abundance of activities including snorkeling, diving, bone-fishing, deep sea fishing, island tours, cave exploration, surfing, biking and beach combing among others. Furthermore, it is serviced by numerous cargo ships arriving daily from both Nassau and the U.S. and has all utilities available including high speed cable. While this is a fairly remote island operation with unique challenges not traditionally of concern in places such as the U.S. or Europe, it is still by far one of the easier destinations available and suitable for a full-service hotel op-eration within The Bahamas.


The Destination

The Islands of The Bahamas

Declared by astronauts as containing the most stunning patterns and colors of water on planet Earth, the Bahamian archipelago of some 700 islands lies just sixty miles beyond Florida’s southern shores. Amassing an aquatic area larger than the Caribbean Lesser Antilles, this idyllic island nation of just 350,000 people is home to some of the most beautiful natural and cultural treasures in the world.

Like the very tides that wash its shores and dictate much of its daily schedule, The Bahamas tell its past in terms of ebb and flow, boom and bust, serenity and turbulence. So close to American mainland shores yet so isolated as a result of their vast dispersal and limited resources, the islands have a history of welcoming refugees, rebels and transients.

A difficult culture to define due to the influences which have swept through as effortlessly as the tides, The Bahamas often gets lumped with the Caribbean, mainly because the two regions share a rich, African-based heritage. The Bahamas, which lies north of the Caribbean, differs from Caribbean islands in its makeup and extreme internal diversity. Like no other place on Earth, The Islands of The Bahamas is comprised of four-teen major islands and each has a unique story of its own.


The pool at The Cove

Eleuthera Island

From the pink sand beaches of Harbour Island to the eclectic arts scene in Gregory Town to the renaissance of the Cape in Powell Pointe, one could spend weeks in Eleuthera and still miss out on all of the natural beauty available to explore, let alone visit each of the island’s different beaches.

This slender island – only two miles wide and 110 miles long – is laden with miles of pink and white sand beaches, infinite stretches of turquoise-tinted, gin-clear water and high cliffs that fringe its eastern side. How-ever, Eleuthera Island is so much more than sand and water. Fishing, diving, snorkeling, surfing, caving, dancing, music-making and taking it easy are favorite pastimes of locals and visitors alike. Known especially for its pineapple plantations, architecture and friendly people, Eleuthera is the perfect destination for travelers seek-ing symmetry between relaxation and island entertainment.

Just a ten minute ferry ride from North Eleuthera is the world-famous Harbour Island. Often called the Nantucket of the Caribbean, Harbour Island is a destination revered by many for its pink sand beaches, div-ing opportunities and unique luxury hotels.This tiny world-famous island is a vacation magnet for the rich and famous, savvy travelers and beach seekers alike and we will use this appeal to strengthen the appeal of North Eleuthera and The Cove.

Leave your watch at home and stow your cell phone away. Free yourself from the crowds, cruise ships and casinos.Welcome to Eleuthera – The Isle of Freedom.

The Settlement of Gregory Town

Located in North Eleuthera, the settlement of Gregory Town is that funky, sea-side village you see in vin-tage, hi-fi postcards. Colorful yet filled with nostalgia, it reveals the story of island life and island people.

Originally inhabited by descendants of the Taino Indians followed by European settlers seeking religious freedom, the settlement of Gregory Town (like much of Eleuthera Island) remained largely undeveloped. Besides the bustling demand for pineapples in the early 1800’s (which collapsed when the United States began harvesting the cash crop in its newly-acquired Hawaiian islands), Gregory Town’s economy relied largely upon fishing, sisal and hand crafts. Like many of the islands, Gregory Town never really recovered from that economic shock, although it still celebrates a week of “Pineapple Fest” every year in June when the crop is sweetest.

Now, the small community remains lined with colorful Bahamian style homes and encompasses a slew of charming attractions sure to satiate the desires of discerning gourmets, romantic travelers and adventur-ous backpackers alike. Highlights include Pam’s Island Made Gift Shop (for one-of-a-kind island gems and trinkets), Petagay’s The Laughing Lizard Cafe (for jerked yard bird paninis and fresh limeade), Ida’s Delights (for Sheep’s Tongue Souse), Surfer’s Beach (the Bahamas’ best surfing beach) and the famous Elvina’s (a local bar known for its weekly jam sessions that attract local and foreign musicians alike). Gregory Town is the island destination you’ve always dreamed of – easy, breezy and full of natural island rhythm.

Traveling down the main road, “Queen’s Highway”, the settlement’s spirit continues to evoke that feeling of being remote and truly free.Welcome to Eleuthera – The Isle of Freedom.


The Experience

The operations mantra of Up South Resorts & Hotels is: “We don’t sell rooms, we create experiences.” This core company philosophy will consistently pervade the management and operation, but here we will address two key components that are specific to The Cove, transportation and activities.

Getting Here

As referenced earlier, one of this project’s greatest assets is the amount of airlift into Eleuthera Island. Whether traveling direct from Miami or Fort Lauderdale or transferring via Nassau,one will find the trip to The Cove quite convenient.With three on-island airports – North Eleuthera Airport (ELH), Governor’s Harbour Airport (GHB) and Rock Sound Airport (RSD) – and ferry service daily from Nassau, guests will find the trip to The Cove smart and pleasurable. Round trip airfare starts at $280 from Florida and $140 from Nassau.

From Miami International (MIA) American Airlines (American Eagle) into North Eleuthera (ELH) – daily flights Charter Flights: Miami City Charters among several others

From Fort Lauderdale International (FLL) Continental Airlines into North Eleuthera (ELH) and Governor’s Harbour (GHB) – flights daily Twin Air into North Eleuthera (ELH), Governor’s Harbour (GHB) – flights daily Charter Flights: Yellow Air Taxi, Air Charter Bahamas , Trans Caribbean Air,, Aerbourne Aviation

From Nassau International Airport (NAS) BahamasAir into North Eleuthera (ELH),Governor’s Harbour (GHB) – twice-daily Pineapple Air into into North Eleuthera (ELH),Governor’s Harbour (GHB) – three times daily Southern Air into into North Eleuthera (ELH),Governor’s Harbour (GHB) – three / four times daily Charter Flights: Golden Wings Charter, Southern Air Charters, LeAir Charter, Bimini Island Air

Bahamas Fast Ferries into North Eleuthera & Governor’s Harbour – departures daily


The Main House with the restaurant and bar.

Activity Program

The natural and cultural appeals of Eleuthera Island and The Bahamas, as a whole, will be the key selling points for people experiencing The Cove. An emphasis on the environmental and conservation aspects of our activities program will prove significant to both the guest satisfaction and for garnering additional atten-tion. This will be accomplished with personable, competent and experienced guides from within our team and within the community. As detailed later, a critical function of The Cove’s sales goals is achieving an above average length of stay of around five to six nights. This average will aid considerably in achieving a 70% to 80% annual occupancy rate, significantly higher than the 45% annual average typically achieved throughout The Bahamas.

Popular activities will include: Snorkeling and Diving Flats Fishing Deep Sea Fishing Reef Fishing/Bottom Fishing Handline Fishing KayakingSailing Beach Combing Hikes Surfing @ Surfer’s Beach Nature Hikes Cave Tours Queen’s Baths Tours Bush Medicine Tours Bird Watching Hikes Island Bike ToursIsland Car Tours Local Cuisine Elvina’s Famous Open Mic Nights Local Gardening Workshops Architecture / Historical Tours Junkanoo and Rake n’ Scrap Workshops


A room with a view at The Cove

Transition Planning Strategy

Existing Site Conditions

As referenced earlier, Up South is moving to purchase The Cove, a roughly 28 acre site just outside of the settlement of Gregory Town on Eleuthera Island. Positioned facing almost due west, the property has sig-nificant waterfront with a quaint private beach. Its alignment allows for consistent trade-wind breezes pro-viding naturally cooling and bug inhibiting assets. As the property is effectively on the lee of Eleuthera, fac-ing waters of the Exuma Sound as opposed to the Atlantic Ocean, its beach and near shore waters are calm and appealingly shallow.

*It should be noted that while the property encompasses a total of 28 acres, only 6 of those acres are presently developed. Thus significant opportunities for expansion on the remaining 22 acres exist should demand require it.

As it is just outside of the settlement of Gregory Town, paved roads, electricity and water are already in place. There are twenty-five existing units on the property – 12 One-Bedroom Garden Rooms, 9 One-Bedroom Ocean Suites and 4 Two-Bedroom Ocean Suites. It should be noted that the current managers are using two of the One-Bedroom Ocean Suites and two of the One-Bedroom Garden Rooms to house members of the executive team. With an abundance of nearby rental units within the settlement of Gregory Town, Up South will use these rooms instead to accommodate additional guests and in turn, generate addi-tional revenue.

The structures are constructed of both concrete block and timber.

Initial planning shows that the layout of the property allows us to appealingly achieve the renovation of a group of approximately 12 buildings and supporting facilities.They would be comprised of 25 hotel rooms (positioned within 11 different buildings), a full service restaurant and bar, a boutique gift shop, a swimming pool, several back-of-house support buildings and administration offices.


A Repositioning Renovation - Aesthetic, Experience and Infrastructure

An important factor in determining the overall success of this venture is the repositioning renovation of The Cove. Achieving a cost effective, timely and quality renovation that effectively creates an authentic and distinctive experience is the first step in attaining an acceptable return on investment. Consequently, it is imperative that this process be properly designed, planned and executed. Our specific and hands-on ex-perience with both Tiamo and Emerald Palms on South Andros is crucial. We have three main criteria for the renovation of this project – simplicity, authentic style and sustainability.

Simplicity

Additionally, simple yet comfortable and appealing design aids in our guest experience. As noted in the Up South discussion, “we don’t sell room nights – we sell experiences.” The experience of a vacation on Eleuthera Island is first and foremost about the beauty of the place and the people. The design and style needs to consistently align the focus of our guest out to that beauty and position them to garner the most in their experience. Simplicity will also aid in achieving feasible maintenance and operations costs and allows for more efficient upgrades and modifications as the operation evolves.

Authentic Style

Not coincidentally, achieving a style authentic to the place and experience will be fortified by the simplicity in design just outlined. The settlement of Gregory Town is over one hundred years old and much of the ar-chitecture there is simple and island style in its design. An additional benefit to maintaining a style authentic to The Bahamas and Gregory Town is that these styles are time proven to hold up and withstand the harsh elements of a tropical island. Implementing something outside of that not only negatively impacts the im-pression on the guest experience, but will prove costly to build and maintain.

Sustainability

Again, the previous adherences to simplicity and authenticity further lend themselves to achieving sustain-ability during the renovation and repositioning process. Following are just some of the elements of sustain-ability we will strive to work into the renovation of the structures:

1. Materials: a. Minimal use or reuse through design;b. Local if possible;c. Environmentally friendly or sustainable where feasible.

2. Passive Cooling Techniques implemented including:a. Reflective roof material reduces heat in structures;b. Create effective shading with porches, eaves, window treatments and vegetation;c. Open design for maximizing natural air flow.

3. Natural lighting and efficient lighting systems for reduced energy consumption.4. Low flow showers and sinks for minimized water consumption and waste production. 5. Two-flush, ultra-low flush toilet systems for minimized water consumption and waste production.6. Grey water plant bed systems for shower and sink waste water. 7. World-leading sustainable waste treatment systems - The Living Machine8. Solar hot water heating.9. Rain water run off collection.10. Vintage furnishings where effective quality and aesthetic are achieved.


11. Significant investment in energy efficient appliances and devices. 12. Alternative Energy implemented, specifically solar, to handle most of the energy needs.

The benefits to using these and other techniques during our renovation process are numerous: - Cost savings in both construction and operations are significant.- The aesthetic and its fit with the existing environment are enhanced. - The integrity of the operation and its surrounding environs is solidified insuring long term product

integrity.- The guest experience is enhanced. - Significant attention in the media and elsewhere are created. - The product is differentiated and sought out accordingly as few competitors effectively utilize these

techniques.

Applying these three goals to the renovation of The Cove in a way that authentically fits within the beauty and culture of Eleuthera Island and Gregory Town will ensure that we effectively accomplish the first step in the process of creating a solid return on investment.

Culture & Nature

While the physical aspect of The Cove will be foundation of the experience, it is the living aspects of this experience that will be the definitive difference within the competitive market. Food, drink, music, nature and culture as delivered by The Cove - Up South Team will be the hallmark by which we are measured, lauded, commended and recommended.

Training, leadership and the integration of the guests, the staff and the community will be keystone for the repositioning of a vacation opportunity at The Cove. Consistently capturing the minds, the hearts and the palate of our guests with activity, interaction and culinary experiences is critical to achieving our return on investment goals.


The Cove Eleuthera - Projected Capital Costs Summary Breakdown

Asset Acquisition Immediate 6 - 24 Months6 - 24 Months6 - 24 Months Total Percentage

Purchase Price & Taxes $ 2,147,000 $ 0 $ 2,147,000 42.91%

Outstanding Liabilities $ 75,000 $ 75,000 1.50%

Legal Work $ 40,000 $ 0 $ 40,000 0.80%

$ 2,262,000 $ 0 $ 2,262,000 45.21%Renovations

General Room Aesthetic Upgrades & Potential AdditionGeneral Room Aesthetic Upgrades & Potential Addition$ 650,000 $ 100,000 $ 750,000 14.99%

Great House & Office Upgrades $ 350,000 $ 350,000 6.99%

Food, Beverage & Retail Point-of-Sale System / Office EquipmentFood, Beverage & Retail Point-of-Sale System / Office Equipment$ 45,000 $ 45,000 0.90%

Water System Upgrades $ 25,000 $ 0 $ 25,000 0.50%

Laundry Room Upgrades $ 40,000 $ 0 $ 40,000 0.80%

Septic System Repairs / ReplacementSeptic System Repairs / Replacement $ 75,000 $ 75,000 1.50%

Kitchen Refrigeration Upgrades $ 50,000 $ 0 $ 50,000 1.00%

Recreational Equipment & Vehicles $ 100,000 $ 0 $ 100,000 2.00%

Additional Guest Pool $ 75,000 $ 0 $ 75,000 1.50%

Landscaping $ 100,000

Energy Efficiency Upgrades & Alter-native Energy Implementation

$ 275,000 $ 0$ 275,000 5.50%

$ 1,785,000 $ 100,000 $ 1,885,000 37.67%

General & Administrative

Professional Fees $ 125,000 $ 0 $ 125,000 2.50%

Transition Marketing $ 85,000 $ 25,000 $ 110,000 2.20%

Food & Beverage Inventories $ 50,000 $ 0 $ 50,000 1.00%

Training Expenses $ 10,000 $ 5,000 $ 15,000 0.30%

Transition Period Travel & Shipping $ 55,000 $ 30,000 $ 85,000 1.70%

Transition Management Fee $ 180,000 $ 0 $ 180,000 3.60%

Contingency $ 200,000 $ 0 $ 200,000 4.00%

Operating Losses (Years 1-2) $ 39,738 $ 51,937 $ 91,675 1.83%$ 744,738 $ 111,937 $ 856,675 17.12%

Total $ 4,791,738 $ 211,937 $ 5,003,675 100.00%


Working in The Bahamas

The Government of The Bahamas and The Economy

The Commonwealth of The Bahamas, to use its formal name, is one of the most politically stable countries in the world. Its constitution is based upon the Westminster Model: Her Majesty Queen Elizabeth II, The Ex-ecutive Branch,The Legislative Branch and The Judicial Branch.

The Bahamas is a member of The Commonwealth of Nations and recognizes Her Majesty Queen Elizabeth II as its Head of State. Her Majesty’s representative is the Governor-General. Comprised of at least nine Min-isters inclusive of the Prime Minister and Attorney General, the Cabinet constitutes The Executive Branch and has control over Government. Parliament constitutes The Legislative Branch, which is made up of a Sen-ate and a House of Assembly. Subject to the provision of the Constitution, Parliament may make laws for peace, order and good government.

The Bahamian economy is driven by tourism and financial services. Tourism and tourism-related construction and manufacturing provide an estimated 60% of the gross domestic product (GDP). Tourism directly and indirectly employs about half the Bahamian work force. In 2008, 4.6 million tourists visited The Bahamas with 85% coming from the United States. This was a 4.5% annual decrease from 2007. There are about 110 U.S.-affiliated businesses operating in The Bahamas, and most are associated with tourism and banking.The Bahamian economy, due to its heavy dependence on U.S. tourism and trade, is deeply affected by U.S. eco-nomic performance.

Doing Business in The Bahamas

After fifteen years with Tiamo Resort and three years with The Emerald Palms, Mike Hartman’s experi-ences working with The Government of The Bahamas have made him quite familiar with the nuances as-sociated with every level of the system.Additionally,he is a Permanent Resident of The Bahamas with the right to work and has established trusted relationships with a wide variety of governmental and non-governmental persons and entities. His overall experiences have been extremely positive and his broad portfolio of relationships in The Bahamas is a significant asset to this endeavor.

Combining FlyingTeeth’s experience and knowledge with The Bahamas’ incredibly investor-friendly policies (i.e. significant incentives and protections for foreign investors that are both deeply entrenched and rea-sonably navigable) set the risk level for The Cove at acceptable if not appealing.Additionally,there are no capital gains taxes and this venture will be exempt from typical import duties and real properties taxes under the Hotels Encouragement Act.

While seemingly obvious, we must stress that The Bahamas is a foreign country and while there are sig-nificant similarities to both North American and European (more specifically U.S. and Britain) business and legal processes, respect and diligence must still be implemented. Consequently, Flying-Teeth and The Cove have retained the services of one of the oldest and most respected law firms in The Bahamas, Graham Thompson Chambers. Given the number of firms FlyingTeeth has previously worked with in The Bahamas, we can confidently attest to the quality, efficiency and effectiveness of this firm.

*Please note that foreign partners in this venture must verify their specific commitments to their home countries in regards to repatriation of earnings and/or requirements for declaration of investment in for-eign business.


Risks and Challenges

The Bahamas is climatically and geologically situated in one of the more docile and temperate locations on earth. However, there are several considerations that must be addressed when discussing the renova-tion design process and ongoing operations:

1. Salt Aira. Wear and tear on buildings and equipment occur at an accelerated rate due to the consistent ocean

breezes permeated with humidity and salt.To combat this salt air, maintenance programs have been formulated and costs have been adjusted to insure that we are in a proactive position to offset and outpace these potential impacts.

2. Termitesa. The tropical climate of The Bahamas lends itself to the rather persistent and impressive infestation of

termites. While seemingly minimal in the overall scheme of things, these tiny insects can have colossal impacts if neglected in the planning and construction. To combat termites,all lumber (including roof sheeting,wall sheeting,etc.) used in any new construction and subsequent maintenance will utilize high grade pressure-treated or termite-resistant materials. Through consistent application and ongoing monitoring, we will effectively eliminate this collectively powerful potential threat.

3. Hurricanesa. These impressive meteorological phenomena constitute one of the bigger risks for any project in The

Bahamas, the Caribbean and much of the coastal Southeastern United States. Subsequently, the plan-ning and development of The Cove must factor the impact and risk associated with the possibility of a hurricane. Design and an effective insurance policy are the two major mitigation points we will use.

4. Designa. Most damage to physical structures in a hurricane occurs from water intrusion or surge. All materials

used in the structures will be water resistant, preventing significant impacts due to potential flooding. In order to counteract wind force damage, all buildings will be engineered to Florida Hurricane Code Standards.

5. Insurance a. As most of the world knows, catastrophic events do occur and an effective plan (covering both dam-

age and loss of business) for preparation including design and insurance will offset the potential risk of the overall project. As with hurricanes, the backing of an effective insurance policy will be crucial in mitigating any potential calamity against the overall project.

6. Firea. Here again is a risk that can be minimized to an adequate level with the implementation of a solid

insurance policy and effective planning. 7. Planning

a. Material choices and a regularly maintained fire fighting system are two planning factors critical in achieving acceptable risk loads. The use of materials like Hardi-Board in key areas such as the kitchen will dramatically reduce the risk of fire. Moreover, on an island where municipal services are limit-ed,our internal,self-sustaining fire prevention and fire fighting system will prove critical.



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2323

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2325

2525

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2536

536

536

536

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536

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536

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583

9583

9583

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9591

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46%

50%

60%

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4,19

83,

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4,16

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5,96

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6,80

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6,80

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$167

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$192

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$305

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$338

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$387

.69

$393

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$399

.41

$405

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$411

.48

$326

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$234

.33

$317

.45

$266

.68

$267

.57

$298

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$311

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$327

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$326

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$331

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35,4

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91,3

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73,9

96$!2

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53,4

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UP SOUTH RESORTS & HOTELS

THE COVE ELEUTHERA FACT SHEET & PROJECT SYNOPSIS

SEPTEMBER 2011

Up South Resorts & Hotels1521 Alton Road #278Miami Beach, Florida, USA 33139

Flying Teeth Boutique Sustainable HospitalityP.O. Box 12762 #385 West Bay Shopping CenterNassau, The Bahamas

Mike Hartman305 586 9742 242 357 8458 [email protected]

www.upsouthresorts.comwww.flyingteeth.com












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