The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A veteran Freeport businessman believes the Government may have to “strong arm” the Grand Bahama Port Authority (GBPA) and its owners to revive the city’s moribund economy.

Jeffrey Butler, the former Butler’s Food World operator, told Tribune Business that while he was not totally convinced that the Government’s Memorandum of Understanding (MoU) with the GBPA is the best route to take, “something has to be done”.

“A lot of it is fine,” he said of the MoU. “They are strong-arming the Port Authority, but that may be necessary. The Port has been a dead issue for 12-13 years.

“Something has to be done; I don’t know what the most diplomatic avenue is. They wanted the families [the Haywards and St Georges] out.”

Freeport’s economy has generally been moribund since 2004, the year that Hurricanes Frances and Jeanne struck, and the Royal Oasis resort closed.

That was followed by the passing of Edward St George, and the legal battle that erupted within first his estate, and then the wider GBPA ownership interests.

Amid the legal wrangling, investment and new business flows to Freeport slowed to a trickle and, despite pockets of positive news from the city’s major industrial conglomerates, an economic revival has proved elusive.

The Government has now used the leverage provided by Freeport’s expiring real property tax, income and capital gains exemptions to negotiate the MoU with the GBPA, which provides for fundamental reforms to the city’s governance and investment approvals framework.

Generally supportive of the Christie administration’s actions, Mr Butler told Tribune Business: “We need new blood here.

“I don’t like to agree to much with what the PLP does, but in this instance somebody has to do something with this group. The St Georges have turned down numerous reasonable offers.”

With both Mr George and Sir Jack Hayward now departed, Mr Butler said their respective heirs lacked the qualities necessary to revive Freeport and manage the GBPA.

“They’ve never had a handle on the Port Authority. They don’t really have a grip on the Port Authority,” he added of the Haywards and St Georges.

“None of the children from both sides ever had a clue what to do with Freeport. Now they’ve been given a public ultimatum. They don’t have a choice but to respond. It’s how they respond.”

The Government stopped short of trying to force the Haywards and St Georges to sell in the MoU negotiations, although they did commit to using their “best endeavours” to attract new investment into both Freeport and the GBPA.

The Prime Minister said earlier this year that talks between the two GBPA shareholding families and Mediterranean Shipping Company (MSC) for the latter’s purchase of their interests continues, although little progress appears to have been made in recent months.

“We’ve had no growth here, nothing,” Mr Butler told Tribune Business. “I’m not sure if this is exactly the right path the Government is advancing on, but something has to be done.

“The point is they’re [the Government] forcing their hand. If DEVCO has to pay real property tax on all that barren land that’s a big one, a bargaining chip. The Government’s basically saying you’ve got to do something in Freeport or get out.”

The MoU appears to have exempted the Grand Bahama Development Company (DEVCO), which is jointly owned by the GBPA/Port Group Ltd and Hutchison Whampoa’s real estate affiliate, from paying real property tax on its undeveloped 74,000 acres - at least for the moment.

Mr Butler, meanwhile, disputed the Government’s assertion that it runs a ‘deficit’ in Freeport by spending more than it earns in revenue, and said the Hawksbill Creek Agreement Review Committee’s report had “left out a lot of things”.

“When you look at Freeport and Grand Bahama, you can’t combine the two,” he added, “as Freeport always produced positive revenue for the Government.”