The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport’s economy will hit “the point of no return” by Christmas unless the Grand Lucayan can be fully re-opened, a prominent attorney has warned.

Terence Gape, the Dupuch & Turnquest law firm’s managing partner, told Tribune Business that resolving the fate of Freeport’s ‘anchor’ resort property is a “pre-emptive first step” that the Minnis administration must accomplish if it is to realise its revival plans for Grand Bahama.

Mr Gape, a long-time Freeport resident, described the city’s tourism market as “dead” and “almost at zero”, with Memories’ post-Matthew departure and the continued Breaker’s Cay closure depriving Grand Bahama of 59 per cent of its hotel room inventory.

He branded Hutchison Whampoa, the Grand Lucayan’s owner, as “a naughty boy”, adding his voice to those blaming the Hong Kong-based conglomerate for the present predicament.

While there had been much talk about Wynn Group and other potential Grand Lucayan purchasers, Mr Gape said it was vital that the new government directly engage Hutchison Whampoa to prevent Grand Bahama’s further economic collapse.

“The immediate number one goal must be to open that hotel, either by Hutchison or a new investor,” he told Tribune Business. “This is so critical that it is not even funny.

“That will not happen unless the Government spurs direct dialogue with Hutchison on this issue. That has to happen. It has to be the Prime Minister, Deputy Prime Minister or the Minister of Tourism; somebody has got to do it.

“Hutchison, as far as I’m concerned, are being a naughty boy with the hotel. Port Lucaya is in very dire straits, and if we lose those 100 Bahamian shopkeepers where the hell are we going to place them and their staff?”

Grand Bahama’s official unemployment rate was pegged at 13.3 per cent by the Department of Statistics in November 2016, but Mr Gape argued that the true rate was nearer 25 per cent.

He added that the island was continuing to lose critical mass and population, estimating that up to 5,000 residents had been forced to seek jobs on other islands following the tourism plant closures.

“I think that by Christmas we’ll be at the point of no return if that place doesn’t get open,” Mr Gape told Tribune Business in reference to the Grand Lucayan. “Our town may not survive.

“From 20-30 restaurants, we’re down to two. Who’s coming to visit when we haven’t got any restaurants? Not even people out there with their own homes, the second home people with families. It’s too dead. There’s no shopping and there’s no restaurants. What the hell have we got?

“The only reason we have airlines servicing us now is not because of tourism; it’s because of BORCO and the Shipyard shifting people, and the cruise ships moving staff. That’s all that’s keeping us alive. There’s no tourism coming here to service the airlines. They’ve let the tourism market go down almost to zero.”

Mr Gape said the Grand Bahama Port Authority (GBPA), as Freeport’s quasi-governmental and development authority, has been especially conspicuous by its near-total silence on the Grand Lucayan situation.

“The Port Authority has not said a word about the hotel and, to me, that’s an acknowledgement they’re not a player,” he told Tribune Business.

“They’ve not said anything about the state of tourism, what steps they’re taking to turn Freeport around, and that seems to me an acknowledgement by them that they’re no longer a player.’

Mr Gape said the GBPA had lacked leadership since the late Edward St George’s death in 2005, and added: “Edward St George would have been jumping up and down, raising holy hell about getting that hotel open, if he was alive. He understood what tourism meant to the viability of this town.

“It means this. It’s up to Bahamians, local investors in Freeport and the Government, to cause Hutchison to do the right thing. I think it could be done, but we have to show Hutchison why.”

Hutchison Whampoa’s failure to repair Matthew-related damage on acceptable terms and timelines was blamed for Memories’ late January 2017 decision to withdraw from Freeport’s hotel sector - a move that also resulted in much-reduced airlift to the island.

The Hong Kong-based conglomerate’s property arm, Cheung Kong Property Holdings, into which the Grand Lucayan and other real estate assets were spun-off, last year initiated a sales process for the resort prior to Matthew.

The Toronto-based real estate developer, Wynn Group, eventually emerged as a potential purchaser, with former prime minister, Perry Christie, announcing that a Letter of Intent (LOI) for the Grand Lucayan’s sale had been signed just prior to the May 10 general election.

However, little subsequent progress towards closing a deal appears to have been made, with Wynn understood to have been seeking capital from other investors and potential joint venture partners.

Many observers believe the Grand Lucayan’s re-opening should be the Minnis administration’s leading national economic priority, given that the situation has the potential to derail its long-term plans for Grand Bahama if it persists much longer.

The new government has placed Grand Bahama at the centre of its economic revival strategy, with plans to market the island to three separate tourism niches, plus attract the film/TV industry and financial services.

This, though, will all be for nought unless the current decline is arrested. Kwasi Thompson, minister of state for finance, last week indicated to Tribune Business that the Government was aware of the urgency and importance required, saying: “The redevelopment and reopening of the Lucayan Strip is a major priority - not just for my office in Grand Bahama, but I believe it is a national priority.

“Grand Bahama needs this hotel to be open, and it needs our people to be employed without question. The closure has had a major effect on our tourism product in Grand Bahama. We have a sense of urgency because we knew before we came to office that Grand Bahamians were suffering. They elected us for this reason.”

Mr Gape, meanwhile, said “dead is the kindest word I can use” to describe Freeport’s economy at present, adding that such a description also applied to its real estate sector.

“There’s been a couple of sales in Ocean View, $700,000 condo units selling for $500,000,” he recalled. “We have ocean front lots, which used to be $800,000, selling for $250,000. Those are luxury lots, luxury apartments. In Nassau, those lots would be selling for $3-$5 million. We’re dead here.”