The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government was yesterday “right in the middle” of negotiations to reverse the Memories hotel closure, which has been branded as “Freeport’s Baha Mar” moment.

Dr Michael Darville, minister for Grand Bahama, told Tribune Business that the Government would have “clearer insight” on the fate of the island’s key hotel product by either this weekend or early next week.

Declining to go into detail on the discussions, Dr Darville indicated that talks between the Government and Memories’ landlord, Hutchison Whampoa, had been interrupted by Chinese New Year celebrations.

The Minister acknowledged the “edginess” of Memories now-former 300-500 staff, who face the prospect of being made redundant, but promised the Christie administration was working to “get the best deal we can possibly get” for Grand Bahama.

His comments came as FNM deputy leader, K P Turnquest, urged the Government to devote the same level of attention and resources to the Memories situation as was deployed in ‘resolving’ the Baha Mar impasse.

“This is our Baha Mar,” Mr Turnquest told Tribune Business. “It may not be on a $3 billion-plus scale, but the effect on our economy is the same, if not more.

“We hope the Government makes every effort to Memories back online, and get it [the Grand Lucayan] sold to a purchaser that is willing to reinvent and repair the property.”

Mr Turnquest said Grand Bahamians, including his constituents in east Grand Bahama, were yesterday expressing concern over jobs and the island’s employment prospects in the wake of Memories confirming its withdrawal.

“I did see a printing company suggest it was having to cut employee hours down to 20 hours per week,” the MP added, although it was unclear whether this move had any connection to developments involving Memories.

Taking a swipe at the Government, Mr Turnquest said: “It’s very disappointing, following a [PLP] convention that was all glitz and glamour, that we’ve had this drop on us when the two ministers [Dr Darville and Obie Wilchcombe, minister of tourism] got up on stage and said how great things were in Grand Bahama.”

Suggesting that the Government “ought to have been able to sit down with Hutchison and work out a reasonable arrangement” to complete repairs to both Memories and the Grand Lucayan, Mr Turnquest said the Hong Kong-based conglomerate’s actions to-date “fly in the face” of the 20-year tax breaks extension it received last year.

“For the Grand Bahama economy and residents here, it does appear that the Government is letting us down, comparing what is happening here to Baha Mar,” Mr Turnquest added.

Dr Darville declined to provide specifics on the Government’s continuing efforts to both reverse the Memories closure, plus resolve the fate of that property and the Hutchison-owned Grand Lucayan.

With just 200 rooms at the latter open, the closure of both properties is currently depriving Freeport’s hotel product of some 1,500 rooms.

“We have negotiations taking place, but it falls right at the time of Chinese New Year, so some of the key people we have to speak to, we’re having difficulty getting hold of them,” Dr Darville told Tribune Business.

“We have ongoing discussions, so for me to give a final conclusion will be a bit premature. We will have a clearer insight as to what’s happening and where we stand early next week or by the weekend.”

Having effectively confirmed that the Government is still talking to Hutchison Whampoa, Dr Darville indicated that it was also seeking to reverse Memories’ pull-out, and that the matter was closed.

“We see exactly what Sunwing has said, but I want to make it clear that the Government is still at the table negotiating,” the Minister reiterated.

Memories was billed by the Christie administration as Grand Bahama’s flagship resort property when it opened, the Prime Minister admitting recently at a PLP candidates’ ratification that the Government had “bragged” about the brand’s involvement.

Its pull-out is somewhat embarrassing for the Government, given that both Mr Christie and Mr Wilchcombe confirmed within the last two weeks that the Government had advanced $2.5 million in taxpayer monies to accelerate post-Hurricane Matthew repairs at Memories.

But Sunwing, the latter’s parent, is blaming Hutchison’s obstruction for sparking the pull-out, meaning the Government has much work to do in bridging the gap between the two sides.

Apart from enticing Memories back, the Government is also likely to be working to facilitate a possible Hutchison Whampoa exit at the Grand Lucayan.

Hutchison Whampoa’s property arm, Cheung Kong Property Holdings, and its HVS Capital Corporation adviser, have been trying to sell the resort via a sealed bid auction that was launched in early summer 2016.

Tribune Business revealed last month that Memories was part of a consortium, together with Hard Rock and the Wynn Group, a Canadian-based real estate developer, that was preparing to offer $110 million to acquire the Grand Lucayan.

Sources familiar with developments told this newspaper yesterday that the Memories-related bid was still alive, although Dr Darville declined to comment, citing the sensitivity of ongoing talks.

“The offer for the hotel is still on, and they were expecting to hear back from Hutchison yesterday,” one contact said. “I think Memories are still in the deal to buy, but they will not stay around if Hutchison is the landlord.”

Dr Darville acknowledged the increasing nervousness of Memories employees and all Grand Bahama residents, saying: “We’ve been hit badly by Hurricane Matthew, people are getting edgy, and negotiations have been ongoing for some time.”

He added that the talks were being led by the Prime Minister’s Office, in the shape of senior policy adviser, Sir Baltron Bethel, and Mr Wilchcombe.

Accusing the Government’s opponents of seeking to exploit the Memories situation for political gain, Dr Darville said: “It’s political season, and everyone wants to add music to the chorus and create the impression that Grand Bahama’s economy is in dire straits.

“But all of us are at the table, working diligently to ensure we get the best we can possibly get for Grand Bahama... We’re working diligently to ensure we keep what we have, and are working to grow the tourism sector and recover from Hurricane Matthew.”