Of Note:One of many reasons why we buy gold stocks.___________________________________________________________________________________________
Barrick’s Munk to triple Soviet-Era port’s capacity as resort
The marina at Porto Montenegro.Bloomberg · Thursday, Aug. 19, 2010Peter Munk
, the chairman of gold producer Barrick Gold Corp.
, wants to triple the number of berths at a former Soviet-era naval port on the Adriatic Sea as he converts the marina into a resort for the world’s wealthiest.
The 82-year-old billionaire
has already invested more than 100-million euros ($128-million) to clean up the “environmental mess” left by Warsaw Pact warships that berthed for decades in Montenegro’s Kotor Bay
. His Porto Montenegro marina development
for “super-yachts” and luxury condos will also have two hotels, golf courses, shops and restaurants.
“I was toying with the idea for 20 years and when I saw the Kotor Bay, I thought it was a unique opportunity, difficult to find again,” said M4. Munk in an Aug. 15 interview on his 400-foot yacht in the harbor.
"There’s nothing like it in the Adriatic, possibly in the entire Mediterranean.”
The Adriatic Sea coastline of the former Yugoslavia, which disintegrated in the 1990s during the worst fighting since World War II, is drawing more tourists to its blue waters and green harbors as investment raises standards and services. The Hvar island in Croatia to the north, which the government bills as a San Tropez of the east, is already the haunt of celebrities including Microsoft Co.’s Bill Gates and Paris Hilton
With 183 berths and 29 luxury condos, Porto Montenegro
will eventually have 630 berths, including 130 for supersized yachts, as well as two boutique hotels, Mr. Munk said. The Montenegrin government recently allocated 80 hectares of nearby land to turn them into golf courses.Natural Harbor
Mr. Munk said he was lured to the beauty of the deep Kotor Bay
on the Montenegrin coast, a natural harbor. His co-investors in the project include Lord Jacob Rothschild, Nathaniel Rothschild, Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton SA, and Russian billionaire Oleg Deripaska, the owner of United Co. Rusal.
The aim is to develop a large, deep-water marina to handle the increasing volume of “super-yachts
” of more than 100 meters (328 feet) in length, Mr. Munk said.
Other marinas such as Portofino
in Italy or those on the French Riviera were built before such vessels became popular and can dock only a very limited number of them, Mr. Munk said.
“The location is so spectacular and the growth of yachts is so unstoppable,” he said. “If you project into the future, for more wealthy Kazakhs, Ukrainians, Russians, Arabs and Qataris or Chinese . . . who buy these monsters, I mean, they have to go someplace.”
Peter Munk is creating a super-yacht haven, complete with condos, in Montenegro
Peter Munk sailing the Adriatic.
Photograph by: Photo courtesy of Porto Montenegro, National Post
It was once the stylish playground of Hollywood icons Elizabeth Taylor, Sophia Loren and Kirk Douglas. Now, 40 years later, Canadian businessman Peter Munk is betting millions that the yachts of the rich and famous will once again return to Montenegro’s pristine coastline and bask in his new marina village and super-yacht port.
"Monte Carlo, Antibe, Caprera, Nice and Cannes — they’ve been there for years, and that’s really my generation," says Munk, the 82-year-old native Hungarian who came to Canada at age 20 and went on to build an empire
. "But for the younger generation, (the current leisure ports are) way overbuilt, way overcrowded, way over-restauranted, way overdeveloped. This is more . . . in tune to larger boats of today than those ports that were built a generation ago."
Munk, chairman of Toronto-based Barrick Gold Corp.
, the world’s largest gold mining company, is the visionary and chief investor behind the new Porto Montenegro
, which he promises will be the Mediterranean’s most comprehensive nautical facility. The 24-hectare property is located near the city of Tivat
in the fiord-like Bay of Kotor
, a UNESCO World Heritage Site and the deepest natural harbour in southern Europe. Because Porto Montenegro sits on the site of a former Austro-Hungarian naval base, the water depth can accommodate today’s super-yachts (more than 24 metres in length)
— the ones that boast helicopter pads, cinemas and discotheques.
Once complete, Porto Montenegro will feature 500 regular berths and another 150 for super-yachts, with residences, luxury hotels, bars, art galleries, a nautical museum and a waterfront promenade all in the works.
To Munk’s delight, the first 85 berths for yachts up to 100 metres opened for business last summer and were fully booked within three weeks, even without a residence in sight.
The first 29 residences — studios to four-bedroom duplexes priced from 185,000 euros ($264,000) to 1.5 million euros ($2.14 million) — sold immediately and are scheduled for occupancy this June. Many have outdoor terraces, private pools and are situated on a kilometre of west-facing waterfront. Another 45 residences in two new buildings will be ready by spring 2011. By the end of next year, two more will be completed, for a total of five buildings in Phase 1.Buyers have first choice of long-term berth licences and are offered a 75 percent discount on them for the first three years while the project is under construction.
All properties will be sold with a secure freehold title, with no regulations on resale or berths once the owner becomes a titleholder. The development’s website, portomontenegro.com, provides comprehensive videos on the history of the area and future plans for the port.
So, who is expected to play at Porto Montenegro? Certainly not Canadians or Americans, Munk says. In fact, he has been discouraging his Canadian friends from buying because it’s just too far for them to travel. ("Canadians have been going to the Bahamas for three generations," he says). Instead, he expects the younger generation of European yacht owners to find it most intriguing.
As he explains, tens of thousands of Poles, Czechs, Hungarians and Russians "have reached the top of their professions" and have money to spare and chartered yachts to park. With Porto Montenegro just a two-hour flight from home, it’s their perfect escape.
"It’s going to appeal to everybody who has a yacht but doesn’t want to be in Monte Carlo or Nice or Cannes
because they like nature more, they like ecology more, they like to have the Dalmatian Coast and natural islands, and the different type of geography and topography and much better weather," he gushes.
Munk knows of what he speaks, having chartered yachts in Europe every summer as his five children were growing up. They sailed to Sardinia, Italy, Spain, Greece and other Mediterranean hot spots, and discovered fascinating beaches and ports along the way. But with many of the older ports built decades ago, he says, they cannot accommodate the length and depth of today’s luxury yachts and, on top of that, charge big bucks for mooring, water and power. Porto Montenegro will change that, thanks to its naval base infrastructure, modern facilities and attractive pricing
As an octogenarian, Munk admits he wasn’t looking for another project to get involved in at his age and stage. But as a savvy entrepreneur, he recognized a good business deal when he saw it.
Several years ago, he recalls, someone called him to say Montenegro had just become an independent country and urged him to hop over for a visit to see how the naval base could be developed into a yacht-friendly port.
"I said, ’I have no interest. Why don’t you call my people?’ But they knew my interest in yachts," says Munk, who lives in Toronto but spends a few months a year in Switzerland.
"So I went to see Montenegro. It had the most fantastic shoreline. And it was just between Dubrovnik and Venice, which, after the Dayton Agreement (ending the war in neighbouring Bosnia), became the most exciting European cruising ground when the Dalmatian Coast opened up. It’s much less overbuilt than the Mediterranean Riviera with (its) wall-to-wall villas and hotels."
Once home again, Munk got on the phone and brought in his partners: British investment banker Lord Jacob Rothschild and his son Nathaniel; French businessman Bernard Arnault, CEO of luxury-goods firm LVMH; Russian businessman Oleg Deripaska; Hungarian real-estate tycoon Sandor Demjan; and his eldest son, Anthony Munk, managing director of Onex Corp.
Adriatic Marinas, a Munk company, is the developer. With that kind of backing, plus a wealthy clientele, the economic downturn was not even a blip in the big reveal.
"We really opened up for the first time to customers one year ago at the height of the recession," Munk says. "Thank God we didn’t depend on bank financing — we finance it ourselves.
Maybe 10 percent of yacht owners lost their wealth when the market collapsed, so they sold their yachts for half the price. But the yachts still have to move. They can’t stay on the sea. They’re not going to be sunk. The yachts still have to go to ports and still have to get duty-free fuel and water."
As a token of thanks to the 400,000-strong Montenegro community for welcoming him, Munk has established a scholarship offering financial support to gifted undergraduate students. Porto Montenegro has also made numerous donations to medical, cultural and sporting initiatives, installed free wireless Internet in Tivat
, and offers free English classes for tourism professionals.
"I learned in the mining business that, if you’re a foreign company operating in a new country, you better have corporate social responsibility programs throughout the whole area,
" says Munk, an annual guest lecturer on entrepreneurism at the University of Montenegro. "In this area, there was resentment against us, because we eliminated an old naval shipyard that had been there 100 years and offered employment to people. It was dirty and dying, but it was employment. It was important to create goodwill in the population, and scholarships are a superb way.
Now that sales are in full swing and yachting season is around the corner, Munk cannot contain his passion for Europe’s newest destination. Just as Monte Carlo had its 15 minutes of fame, he says his Porto Montenegro promises to push the luxury boundaries
. "Both countries were carved out from a big entity," says Munk of the Monte Carlo-Montenegro comparison (Montenegro was part of the former Yugoslavia). "Both are tiny, a few hundred thousand in population. Both have their only asset as a spectacular coastline on the Mediterranean. Look what Monte Carlo has done to its own standard of living and prosperity in two generations. I believe Montenegro will do exactly the same, but in a much shortened time frame. And that will be of enormous benefit to the small country."
And undoubtedly a boon to those who bought a condo during Porto Montenegro’s early stages . . . even if they happened to be Canadians.
View from one of the condos at Porto Montenegro.
Photograph by: Image courtesy of Porto Montenegro, National Post
A Predator yacht at berth at Porto Montenegro.
Photograph by: Illustration courtesy of Porto Montenegro, National Post
An artist's rendering of the condos and marina at Porto Montenegro
Photograph by: Illustration courtesy of Porto Montenegro, National Post
The view from one of the planned condos at Porto Montenegro.
Photograph by: Illustration courtesy of Porto Montenegro, National Post____________________________________________________________________________________________________http://www. sail-world. com/photos_2010/Alt_Montenegros%20Bay%20of%20Kotor.jpg__________________________________________________http://upload. wikimedia. org/wikipedia/commons/e/ef/Tivat2.jpg______________________________________________________________________________________________________________________________________________________"To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable." Edgar BronfmanThanks for checking out my page. Red Mars