SOURCE: Meritage Hospitality Group Inc.

February 28, 2008 16:32 ET

Meritage Announces International Development Venture With the Related Group -- America's Pre-Eminent Developer

GRAND RAPIDS, MI--(Marketwire - February 28, 2008) - Meritage Hospitality Group Inc. (PINKSHEETS: MHGU), one of the nation's premier franchise operators, announced that it has entered into a strategic partnership with The Related Group in a joint venture called TRG-Meritage Bahamas, LLC. The joint venture will develop an 884-acre ultra-luxury destination resort community on the island of Eleuthera, The Bahamas. The development has received approval in principal from the Bahamian government's National Economic Council.

Robert E. Schermer, Jr., CEO of Meritage Hospitality Group stated, "The Related Group, owned by Jorge Perez and Stephen M. Ross, is the preeminent developer in North America. In addition to their large United States and South American development portfolios, the two principals were former stakeholders in Atlantis on Paradise Island in The Bahamas, operated by hospitality icon Sol Kerzner."

Under the joint venture, Meritage and The Related Group are planning to co-develop an ultra-luxury destination resort community on South Eleuthera Island. The project is intended to be one of the world's leading, low-density, low-rise, environmentally sensitive resort communities. In addition, Meritage and Related will jointly oversee the sales and marketing services, and provide co-development services. Rockford Construction of Grand Rapids will provide owners representation services and also provide co-development services for the project. The Related Group will function as the lead developer for the new high-end golf course and marine oriented community. Mr. Schermer added, "We are honored that one of the world's finest developers is joining our quest to fulfill the dream envisioned by the original land owner, George Baker, legendary Bahamian businessman and former member of the Bahamian House of Assembly. Mr. Baker has been the faithful steward of this crown jewel for the past fifty years and I know Jorge Perez shares Mr. Baker's vision for this site. We look forward to working with the entire Related team to make this project a reality."

In addition to participating in the sales and marketing and development fees related to the overall project, Meritage holds a 23.75% stake in the entity that holds the property interest in the 884-acre oceanfront property. Meritage's interest in the joint venture entity will be half of this percentage, and will be subject to future dilution related to financing requirements or new equity partners. Mr. Schermer stated, "Related is currently finalizing the master plan and development schedules. Once this is completed, a project launch should follow the sub-division permits which traditionally take twelve months after land closing to engineer and process. This development effort is a watershed event for our Company as well as the citizens of South Eleuthera."

About The Related Group:

The Related Group is the nation's finest developer and manager of premier real estate properties. The combined Related companies have developed over $25 billion worth of real estate developments. This level of activity sets Related apart from its competitors and its developments set the standard for excellence within the real estate industry. A combination of passion for quality, forward thinking, experience, imagination and the skill to build market-leading properties has made them a world-renowned development company. New projects include large-scale, multi-family developments as well as luxury high-rise and innovative mixed-use buildings. In addition to its North American and Bahamas projects, Related Group is developing projects in Argentina, Colombia, Costa Rica, Mexico, Panama and Uruguay.

SAFE HARBOR STATEMENT

Certain information in this new release, particularly information regarding future economic performance and finances, and plans, expectations and objectives of management, constitutes forward-looking statements. Factors set forth in our Safe Harbor Statement, in addition to other possible factors not listed, could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. Please review the Company's Safe Harbor Statement at http://www.meritagehospitality.com.

Contact Information

  • CONTACT:
    Robert E. Schermer, Jr.
    Chief Executive Officer
    Meritage Hospitality Group Inc.
    616/776-2600