By Craig Karmin From The Wall Street Journal

Nation Needs $350 Million to Develop 16-Mile Stretch

The Haitian government is seeking partners for a seemingly daunting task: building a world-class resort destination in one of the world’s poorest countries.

This nation of 10 million people has chosen a 16-mile stretch of largely unoccupied beachfront on the country’s southern coast, known as Côté de Fer, on which to build. Haiti’s Ministry of Tourism estimates it will need up to $350 million in private investment to develop the area, including infrastructure such as utilities, a sewer system and roads.

The plan calls for a new international airport, an 18-hole golf course and 4,000 new hotel rooms, which would be a 50% increase from the island’s current room count.

The government is aiming for the first phase of the plan, which includes four hotels and the airport with its own passport station, to open by 2017.

Côté de Fer would represent Haiti’s most ambitious hotel and real-estate project in 30 years. But the challenges the country faces in raising money show how hard it can be to lure investors to a natural tourism destination racked with poverty and crime.

Tourism minister Stephanie Villedrouin Balmir has been traveling the U.S. and Europe trying to line up investors as well as hotel operators to run the properties. Her pitch: a 15-year tax-free investment period and the chance to get in on the ground floor.

“We are telling them that this is an amazing opportunity to create a new destination in the Caribbean,” she says.

There has been some interest but few solid commitments. Grupo PuntaCana, a Dominican Republic-based airport operator, has agreed to build and manage the airport and to make an investment for an undisclosed amount, Ms. Villedrouin Balmir says.

A spokeswoman for Grupo PuntaCana said the company is working with the Haitian government and “has invested in the planning, designs and studies necessary for the development of this new destination.”

The Inter-American Development Bank, an organization that supports development projects in Latin America and the Caribbean, has agreed to spend $36 million to upgrade waterfalls, caves and other points of nature in neighboring villages. Côté de Fer is located between the beach and a mountain range, apart from the rest of the island.

Rick Newton, founding partner of the travel-advisory firm Resort Capital Partners LLC, sees reason for skepticism that it can succeed. Besides raising the money, Haiti needs to convince airlines to add flights to Côté de Fer. It also has to train thousands of workers. Haiti would be years behind competing Caribbean destinations like Mexico and the Bahamas.

Still, he says, the Dominican Republic pulled off something similar decades ago with the once-idle Punta Cana resort area. That country had about 4.7 million visitors in 2013, according to its tourism ministry, nearly five times Haiti’s total. Most of the Haiti tourists were day visitors from cruises.

Haiti was a popular tourist destination in the 1960s and 1970s, when François “Papa Doc” Duvalier was president, followed by his son, Jean-Claude “Baby Doc” Duvalier. The island nation was known for its natural surroundings, the historic stone citadel in the north and its thriving night life.

Baby Doc was forced from office in 1986, starting a long cycle of political instability. Periods of military rule triggered U.S. sanctions that devastated the tourism industry and the broader economy. A powerful 2010 earthquake provided another devastating blow.

While crime, poverty and corruption remain a problem—the government says about a quarter of the population is in “extreme poverty”—international assistance has helped normalize the country after the earthquake. More than 90% of the 1.5 million displaced people who were living in temporary camps have found alternative housing, according to the U.S. State Department.

“The perception is that we are still in the rubble,” says Ms. Villedrouin Balmir. “We have to fight this image every day.

To some, the message may be getting through. Alejandro Zozaya, chief executive officer of hospitality company Apple Leisure Group, says he would like to open one of the hotels during the first phase of the project. His hotel subsidiary operates 40 upscale resorts in Mexico and the Caribbean.

Apple Leisure’s affiliated real-estate fund is looking for partners to invest alongside it in a Côté de Fer hotel. “It has all the ingredients for success,” says Mr. Zozaya, citing the proximity to the U.S., natural beauty and a hardworking population.

Spain’s Melia Hotels International MEL.MC -0.79% and Riu Hotels & Resorts also have held discussions with the Ministry of Tourism, Ms. Villedrouin Balmir said. She added that the first phase of the development would create about 10,000 direct or indirect jobs and would target both North American and European tourists.

IMAGES:

A rendering of the proposed resort development at Côté de Fer, Haiti. Ministry of Tourism of Haiti

Tourism minister Stephanie Villedrouin Balmir is courting investors. Keith Bedford for the Wall Street Journal

For more on this story go to: http://online.wsj.com/articles/haiti-pitches-a-ritzy-oasis-on-an-island-of-misfortune-1412098840