Kerzner plans $600 million Paradise Island expansion

Jun 3, 2003 6:41 AM

Sol Kerzner, the South African gaming mogul who founded Kerzner International Inc., formerly known as Sun International Inc. (SII), believes in building on a good thing. His company announced last week that it would spend $600 million to expand its Atlantis Resort/Casino on Paradise Island in the Bahamas.

The move will add 1,200 rooms to the existing 2,300 rooms and will increase the total investment of the company to $1.7 billion. Work on the expansion is expected to begin before year-end, the company said.

In addition to the rooms, the project includes adding 20,000 square feet of new retail space, 50,000 square feet of convention facilities, four new restaurants, an expanded water park with a new swim-with-dolphins attraction and 120 new timeshare suites along Nassau Harbor.

Planning for the expansion comes at a time when the company is struggling to win back some of the business lost following the terrorist attacks of two years ago. However, Butch Kerzner, company president, said that "booking patterns have now returned to normal levels following the end of this war."

Part of the motivation for the expansion, Kerzner explained, was the recent agreement with the Bahamas government to extend casino tax concessions that the company now enjoys for the next 11 years.

In addition to the revenues from its gaming and hotel properties, Kerzner International also benefits as a participant in Trader Cove Partners, the developer of the Mohegan Sun casino that shares in the property’s revenues.

Following the announcement of the company’s expansion plans, Standard & Poor’s Ratings Services announced that the expense will not affect the company’s ratings or outlook.