|The Bahamas Investor Magazine
July 27, 2016
July 27, 2016
He is the mastermind behind the newly re- imagined, private island oasis, Deep Water Cay, but don’t call him a developer.
“I was just a regular person, a homeowner, who fell in love with the people, the place, the resource,” says Texas native Paul R Vahldiek Jr, speaking of the upscale fishing retreat and mixed-use community, a short flight from Miami, which he now part owns.
A pristine paradise, the island is a five-minute ferry ride from East End, Grand Bahama.
Some might call it a hidden gem, but anglers have been getting their endorphin high here since the late 1950s, with top Bahamian guides by their side. But a few years ago, the island retreat was close to collapse, with the then owners struggling to make the business model work.
“When I saw that it was going to go under, I wanted to save it. My [business] partner and I care about wild places, people and sustainability and thought we’d do our best to give Deep Water Cay a future,” says Vahldiek.
In December 2009, the Texan purchased the two-mile long cay from DPS Sporting Club Development Co and promised the then Hubert Ingraham-led government he would spend at least $5 million on development.
“We spent $35 million in the purchase, operations, upgrade and operational losses,” he says.
“When I bought this place the pool had crabs in it. The air conditioners weren’t working. No money had been spent. It was in terrible condition. We kind of started almost from zero. They tried to make it a private club, but I think the economy showed by and large, give or take a few notable examples, that private clubs just don’t work.”
Now the revamped ecotouristic, water sports paradise serves not only anglers, but more soft adventure travellers who are coming for its peace and tranquillity, undiscovered white-sand beaches and fresh caught seafood.
“What I was seeking when I came here was a getaway. Now I’ve done something that draws me in,” says Vahldiek. “Is life play, or is life about values and goals and things achieved and things you’re proud of? I don’t regret any of it at all.”
A self-described “flip-flop and shorts guy,” the Texan lived in a world of cufflinks, ties and three-piece suits, from 1980 to 2010, as a successful civil trial lawyer in Houston.
A fly fishing enthusiast, Vahldiek first visited the island getaway in early 2000 as a guest of one of the owners. At the time, Deep Water Cay was a fishing retreat, with a residential component for those interested in purchasing a home there. Vahldiek fell in love with the place and subsequently he built a four-bedroom/four-bath home and purchased membership in Deep Water Cay, then a private members’ club. This would be his third home, with Houston as is his primary residence and a second property in Colorado.
“Many folks around the world might be blessed with money but what they don’t have is time, so I think the accessibility was important,” says Vahldiek.
The butcher’s son was also attracted to the warmth and genuine friendliness of the Bahamian people. Plus, having grown up waterskiing in Galveston, Texas, he possessed an affinity for the marine environment.
Despite all the attractions, the house sat completed and empty for nearly two years before Vahldiek was able to visit due to his busy professional life.
Vahldiek is the chairman, president and CEO of The High Lonesome Ranch (HLR) in DeBeque, Colorado. Back in 1994, the attorney began acquiring ranches. The end result is the 400 sq miles HLR uses for ranching, recreation and ecological research. It is roughly the size of the Rocky Mountain National Park.
His work as head of the ownership group and his involvement with numerous conservation boards was all-consuming and kept him away from his Bahamas retreat. Vahldiek’s first visit to his Deep Water Cay as a homeowner gave him pause for thought–“Now why haven’t I been here before now?”
One of his favourite places on the island is a gorgeous body of water reminiscent of something out of the 1980 romantic adventure film, The Blue Lagoon, starring Brooke Shields. “This shows my age, but I keep thinking she is going to be here,” he says.
It’s stunning scenery such as this that the conservationist wants to preserve. A firm believer in leaving a landscape better than when he found it for the benefit of future generations, it wasn’t difficult for the attorney’s interest to be piqued when approached about purchasing Deep Water Cay.
“I’m really not a developer. I’m somebody trying to do the right thing by a place,” he says. “I was a homeowner who wanted to save an island which wasn’t properly positioned to be saved financially.”
What he has accomplished at The High Lonesome Ranch is akin to what he is attempting to achieve here at Deep Water Cay: to use the land in an environmentally sustainable but profitable fashion.
“If we could have a model that conserves the marine [life], the landscape and the jobs, people and places then I think we’ve done something good. It’s been a longer process than I thought.” Vahldiek says.
Not the typical developer, Vahldiek’s paid a steep price for jumping in head first.
“I didn’t put my business hat on,” he admits. “We started paying the payroll for DPS in June 2009, when we didn’t close the deal until December that year. We didn’t want these residents, who could ill afford it, to go without pay cheques. They were just going to bankrupt it and close it.”
He adds: “Things were hurried and rushed. I don’t think we had the greatest legal representation, which could have made closing and some other issues we’ve dealt with since then easier and better.”
Vahldiek is a man who likes to dream big. He traces it to his days as a youth, one day sitting in the backseat of his grandmother’s Buick 225 looking at the moon which his next door neighbour, astronaut Neil Armstrong, happened to be standing on that night.
“I thought in those days, without real computing power if we could shoot something at the moon, hit it and come back then what’s to limit anybody’s imagination and dreams,” he says.
It’s not surprising that he has big plans for Deep Water Cay. Since taking over from DPS, Vahldiek has constructed Deep Water Cay’s welcome centre, floating docks, the marina (not in wetlands, Vahldiek points out), the boat shed, management staff housing and a couple of homes. Residences range in price from $850,000 to $2 million. Every lot is oceanfront looking at a barrier reef and the western setting sun.
The water treatment system and the reverse osmosis plant were upgraded since they reportedly weren’t as functional as they appeared on paper, and the lodge completely renovated.
The property’s amenities include a lodge with bar and grill, tennis court, fitness centre, infinity pool, private landing strip, onsite customs clearance facilities and a number of water crafts, including 12 premier Hell’s Bay boats. There are also dive masters, a top-notch chef and tour guides on staff.
Veteran news anchor Tom Brokaw, along with Hollywood A-listers Michael Keaton and Liam Neeson, all visited the property during filming of the sixth season of Buccaneers & Bones, an Outdoor Channel series. They provided rave reviews. Brokaw is reportedly a repeat guest; Keaton keeps his paddle board here and the Drake House is Neeson’s preferred accommodation.
Good celebrity reviews aside, the fact still remains that limited room inventory is hampering growth at the moment. Even though the number of new and repeat visitors is growing with the average guest staying five nights or more, the seven bungalows and four rental houses cannot generate sufficient revenue to support the high-end property and its 60-strong staff.
“We need more beds to support this level of staff and management,” says Vahldiek. Recently, the resort laid off about nine workers when management overshot growth.
“We are trying to make better business decisions about managing the expense of being here so that the whole is safe at the end,” says the 61- year-old. “I don’t ever like losing an employee or job but I sure don’t want to manage a business so poorly that it loses everyone’s job.”
The investment needs 50 rooms and beds, according to its owner. Vahldiek and his European business partner hope to join forces with a luxury hotel group to create additional facilities, which would likely include over-the-water bungalows and a luxury spa, among other amenities.
The goal is to group like-minded vacationers together, with fishermen clustered near a fishermen’s village, family at another locale and couples at a third, more romantic location.
“The scope of our vision and the plans, by necessity, dictate that we look at some type of different financial arrangement than we’ve done in the past, whether it’s a new partner or debt equity setup or something of that sort which allows us to complete it,” Vahldiek shares. “This new venture would probably be a larger investment than we’ve already made. Everything we’ve done this far has been with our own cash.”
The resort is still “working through things” and up to press time was awaiting government approvals.
“We are here and we are here to stay. We believe in it,“ says Vahldiek. “We love Deep Water but we want to make sure that we create the best plan for it.”