Cap Cana, Roco Ki golf developments in the Dominican Republic face uncertain futures

PUNTA CANA, Dominican Republic – When I first learned I would be visiting Punta Cana in the Dominican Republic, I was geeked to check out the Legacy course at Roco Ki, the oceanfront stunner by Nick Faldo.

Turns out, my excitement was way off-base. After opening to rave reviews in 2008, the course along the cliffs closed earlier this year, and I’m told the construction on the Westin hotel at the site has ground to a standstill.

Turns out, Roco Ki isn’t the only major development on the rocks in this luxurious golf destination in the Caribbean.

A cryptic press release issued Oct. 24 from Cap Cana stated the company was struggling to sell real estate. The release indicated that sales of real estate properties totaled $13 million during the first nine months of 2011 compared to $28.5 million during the same period in 2010. The release ended with this threatening statement:

“The Company intends to continue developing the Resort. However, given the adverse real estate market and operating conditions under which the Company is currently operating, and the uncertainty in the foreseeable future, it cannot guarantee that its future cash flows will be sufficient to cover all of its financial obligations.”

Bernie Morgan has heard it all before. Morgan, the club manager at Punta Espada Golf Course within Cap Cana, a 30,000-acre master-planned luxury resort and real estate community, said he’s been hearing rumors of bankruptcy since he moved to the island 18 months ago.

Morgan, who was brought in by Troon Golf, didn’t seem too concerned when I brought up the issues after my round of golf. Morgan said he left Troon to stay at Punta Espada (which opted out of its Troon contract in January) because he believes in the future of this awesome Jack Nicklaus course. Punta Espada, the host of the Cap Cana Championship, a Champions Tour event in 2008-10, is one of the 10 most beautiful golf courses on the planet with eight holes directly on the ocean (see photo of the 13th).

Morgan said the golf course and the marina separated from Cap Cana’s real estate component in April, moving under the umbrella of Sunsport Services.

Morgan hopes the October opening of The Fishing Lodge Cap Cana, a resort of 302 luxury villas owned by Salamander Hotels & Resorts, will bring more golfers to Cap Cana. Salamander also owns Innisbrook Golf Resort near Tampa Bay and recently signed a management contract with Reunion Resort near Orlando, Fla., and Hammock Beach Resort in Palm Coast, Fla.

“Salamander coming on board will be huge for us with their golf background and their data base (of customers),” Morgan said. “We think we will go to a whole new level of business. Once you experience Punta Espada, everything else (in the Caribbean) is a step down.”

He admitted construction on the Las Iguanas, the second Nicklaus course at Cap Cana, halted after just eight holes were complete. Those will be maintained, but he’s unsure when the course be finished.

“I can’t put a date on it,” he said. “I’ve heard a date too many times. It is one of those, ‘I will believe it when I see it.’ I believe the season here will be incredible. Hopefully the powers that be will recognize we need a second golf course.”

The truth is Cap Cana is too big to fail. Since breaking ground in 2002, Cap Cana has invested approximately $800 million in infrastructure and other improvements and has entered into contracts with aggregate value of approximately $1.5 billion for the sale of approximately 1,500 units of real estate properties. Throughout this period, Cap Cana has delivered more than 700 real estate properties to customers, including retail and developer hotel lots, condominiums and villas.

That would be a lot of angry millionaires if this mammoth development fell apart.