Baha Mar Resorts, Harrah's Entertainment and Starwood Hotels Finalize Joint Venture and Management Agreements to Develop Baha Mar, a $2+ Billion Destination Resort in The Bahamas

Unprecedented Resort Development to Include the First Caribbean Caesars

Resort Hotel & Casino, and Prestigious Collection of Four of Starwood's


Jan 16, 2007, 00:00 ET from Baha Mar Resorts Ltd.

    NASSAU, Bahamas, Jan. 16 /PRNewswire-FirstCall/ -- Today, Baha Mar
 Resorts Ltd. announced that it has signed a joint venture agreement with
 the world's best-known gaming and hospitality company -- a subsidiary of
 Harrah's Entertainment, Inc. (NYSE:   HET) -- to create and develop Baha Mar,
 the Caribbean's largest single-phase destination resort. The joint venture
 partners have also signed management agreements with Starwood Hotels &
 Resorts Worldwide, Inc. (NYSE:   HOT). Establishing a new blueprint for
 resort development, Baha Mar represents the largest, single hospitality
 investment in the region and a one-of-a-kind destination resort experience
 with a range of top-shelf accommodations, services and amenities, and
 true-to-The Bahamas setting and design.
     According to the joint venture agreement, Baha Mar Resorts and a
 subsidiary of Harrah's Entertainment will jointly own the previously
 announced Baha Mar -- a mixed-use project to be located in Nassau, Bahamas
 on a 1,000- acre site -- making it the largest destination resort in the
 Caribbean. Baha Mar represents a unique structure for the hospitality and
 gaming industries and calls for a phase one investment of more than $2
 billion. The joint venture will be 57% owned by Baha Mar Resorts Ltd. and
 43% by a subsidiary of Harrah's Entertainment and will become effective
 upon confirmation by the Bahamian Government of certain required approvals
 and concessions. The joint venture partners have also signed management and
 related agreements, in which Starwood has committed to operate hotels under
 its W, St. Regis, Westin and Sheraton brands at Baha Mar, and to invest $40
 million in mezzanine bonds, subject to certain terms and conditions, to be
 issued at the time of project financing (expected in 2008). Baha Mar
 Resorts will serve as the developer for the resort.
     "The signing of these agreements marks the beginning of a new tourism
 era for The Bahamas with the coming together of the most prestigious and
 successful companies in lodging, gaming and leisure, most notably,
 Harrah's, our preferred gaming partner for this endeavor from the moment
 the project was first conceived," said Sarkis Izmirlian, chairman and chief
 executive officer of Baha Mar Resorts Ltd. "With a shared vision and the
 combined strength of each partner's respective brands, together with what
 we believe is the finest location in the Caribbean -- Nassau, Bahamas, we
 look forward to achieving our goal to create one of the world's leading
 resort destinations."
     "Caesars Resort Hotel at Baha Mar is an important step in our global
 development strategy as well as a true milestone," said Gary W. Loveman,
 chairman, chief executive officer and president of Harrah's Entertainment.
 "This one-of-a-kind, warm-weather destination resort will not only be a
 wonderful addition to our current collection of properties worldwide, but
 also give us entree into new markets, while providing our customers with a
 place to enjoy the Caesars experience in a truly world-class setting in the
 Caribbean's most desirable destination."
     "A development of this scale and scope aligns perfectly with Starwood's
 strategy to grow its brands in premier locations around the world," said
 Steven J. Heyer, chief executive officer, Starwood Hotels & Resorts
 Worldwide, Inc. "This unprecedented project will offer travelers to the
 Caribbean a destination and an experience unlike any other."
     Baha Mar represents a quantum leap forward in the continued tourism
 growth and success of The Bahamas, ushering in a new era for Nassau's Cable
 Beach area of New Providence Island. A recent study conducted by Global
 Insight, one of the world's leading companies for economic and financial
 analysis and forecasting, revealed that upon completion of the resort, Baha
 Mar is expected to directly and indirectly sustain over 7,000 jobs,
 generate more than $4.7 billion in incremental tax revenues, and contribute
 $11.2 billion to The Bahamas' Gross Domestic Product over the next 20
     Resort Features
     In keeping with the goal to create a dynamic resort experience that
 captures the true spirit of The Bahamas, Baha Mar design plans call for
 lush, natural landscapes and waterscapes and Caribbean-inspired
 architectural elements that evoke the area's Colonial, European and African
 influences. Baha Mar will captivate guests from the moment they arrive on
 site as they proceed along an expansive water boulevard and 50-foot-high
 circular waterfall before entering the resort's grand porte-cochere.
     Baha Mar will offer approximately 3,000 guest rooms, with Harrah's
 Entertainment operating a new Caesars Resort Hotel at Baha Mar with more
 than 1,000 guest rooms and a nearly 100,000-square foot casino -- the
 largest in the Caribbean.
     The remaining guest rooms at Baha Mar will be offered at the first and
 only collection of four Starwood brands at a single resort, consisting of a
 W Baha Mar, St. Regis Baha Mar, Westin Baha Mar, and the Sheraton Cable
 Beach Resort. The W, St. Regis and Westin are anticipated to include
 residential units. All four properties will be managed by Starwood.
     Under separate agreements between Baha Mar and Starwood, the Sheraton
 Cable Beach Resort is anticipated to open in 2007 following an $80 million
 property-wide renovation and re-flagging of Baha Mar Resort's existing
 Radisson Cable Beach & Golf Resort.
     Together, the Caesars Resort and Starwood hotels will provide guests
 with exceptional choice and flexibility at a variety of price points.
     Other planned amenities at Baha Mar include Starwood's Bliss and Remede
 branded luxury spas at the W and St. Regis, respectively; a third, full-
 service luxury spa facility -- expected to be the largest in the Caribbean;
 an 18-hole Jack Nicklaus Signature Golf Course -- a one-of-a-kind
 championship- quality course in Nassau; a distinctive show-lake experience;
 200,000 square feet of meeting space; a 20-acre beach and pool experience
 with 3,000 feet of continuous beachfront; and a retail village with upscale
 shopping, chef- branded restaurants, and entertainment venues.
     Baha Mar Resorts has also assembled an exceptional design team that
 includes some of the leading firms in the industry, including lead
 architectural design firm and Baha Mar Development subsidiary MHA Studio
 (Los Angeles, CA), led by design principal, Mike Hong (AIA); and Executive
 Architect, Hillier Architecture (Princeton, NJ), among numerous other
 notable design and landscape firms.
     Construction is scheduled to begin in 2007, with an anticipated opening
 in early 2011. Future phases of Baha Mar will include a variety of
 residential offerings, and a second 18-hole championship golf course, among
 other attractions.
     "This is a defining resort project for The Bahamas and the Caribbean,"
 said Rt. Hon. Perry Christie, Prime Minister of The Bahamas. "Harrah's
 Entertainment is by far the largest gaming operator to become involved in
 The Bahamas and the arrangement with Starwood is unprecedented in any
 destination including primary resort areas like Las Vegas and Orlando. My
 government is very pleased to have attracted and encouraged this historic
 and defining development."
     Harrah's Entertainment, Inc. is the world's largest provider of branded
 casino entertainment through operating subsidiaries. Since its beginning in
 Reno, Nevada nearly 70 years ago, Harrah's has grown through development of
 new properties, expansions and acquisitions, and through its subsidiaries
 now owns or manages casinos on four continents. The company's properties
 operate primarily under the Harrah's, Caesars and Horseshoe brand names;
 Harrah's also recently acquired the London Clubs International family of
 casinos. Harrah's Entertainment is focused on building loyalty and value
 with its customers through a unique combination of great service, excellent
 products, unsurpassed distribution, operational excellence and technology
 leadership. More information about Harrah's is available at its Web site --
     Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel
 and leisure companies in the world with approximately 850 properties in
 more than 95 countries and 145,000 employees at its owned and managed
 properties. Starwood(R) Hotels is a fully integrated owner, operator and
 franchisor of hotels and resorts with the following internationally
 renowned brands: St. Regis(R), The Luxury Collection(R), Sheraton(R),
 Westin(R), Four Points(R) by Sheraton, W(R), Le Meridien and the recently
 announced aloft(SM) and Element(SM) Hotels. Starwood Hotels also owns
 Starwood Vacation Ownership, Inc., one of the premier developers and
 operators of high quality vacation interval ownership resorts. For more
 information, please visit
     Baha Mar Resorts Ltd. is the lead partner in the creation and
 development of Baha Mar and serves as the management arm for resort and
 real estate operations. Baha Mar Development Company is a subsidiary of
 Baha Mar Resorts Ltd. and is responsible for the oversight and execution of
 all development- related aspects of the Baha Mar resort project, including
 MHA Studio, which is dedicated to the architectural design and execution of
 Baha Mar. Baha Mar Resorts Ltd.'s other hotel interests include Cable Beach
 Resort & Crystal Palace Casino, which it owns and operates. Baha Mar
 Resorts is headquartered in Nassau. For further information, visit
     (Note: This press release contains forward-looking statements within
 the meaning of federal securities regulations. Forward-looking statements
 are not guarantees of future performance or events and involve risks and
 uncertainties and other factors that may cause actual results or events to
 differ materially from those anticipated at the time the forward-looking
 statements are made. These risks and uncertainties include the risk that
 the transaction itself will not be consummated, that the anticipated
 benefits of the transaction will actually be realized as well as other
 risks and uncertainties presented in detail in our filings with the
 Securities and Exchange Commission. Although we believe the expectations
 reflected in such forward-looking statements are based upon reasonable
 assumptions, we can give no assurance that our expectations will be
 attained or that results and events will not materially differ. We
 undertake no obligation to publicly update or revise any forward- looking
 statement, whether as a result of new information.)

SOURCE Baha Mar Resorts Ltd.