The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A top Freeport realtor is voicing hope that the ITM/Royal Caribbean project will reverse the city’s unhappy recent history of “always being the bridesmaid, never the bride”.

James Sarles, principal at Coldwell Banker James Sarles Realty, told Tribune Business that the joint venture’s impending purchase of the Grand Lucayan, and combining its redevelopment with Freeport Harbour, had already sparked “a tremendous amount of hope and confidence in the marketplace”.

While acknowledging that the deal has yet to close, and that both ITM/Royal Caribbean and the government have to undertake the necessary due diligence and negotiations, Mr Sarles said the parties’ signing of a letter of intent (LoI) had within hours sparked a flurry of inquiries about Freeport real estate.

Praising the government for “luring a major player”, he added that the Mexican port developer and cruise line, together with the separate $100m port proposed by the latter’s rival, Carnival, “will open up a form of tourism we’ve never had”.

Mr Sarles admitted that many previous investments promised for Freeport had failed to materialise, but said the involvement of the world’s two largest multi-billion dollar cruise lines had given residents and businesses extra comfort that the current projects were for real.

“We’re doing great now,” he told Tribune Business of the ITM/Royal Caribbean LOI signing. “Without a doubt it’s going to have a drastic impact on the real estate market. And it already has.

“Based on the announcement we sent out, the press release we sent out right away, people made contact and said: ‘We’re interested in looking at the properties we looked at in the past. Can we visit that ocean-front lot? Are those units at the Bell Channel still available?’

“It’s really created a tremendous amount of excitement. We’ve been waiting for this announcement. Even though it’s just an LOI, it’s created an amazing amount of hope and confidence in the marketplace, and people are looking at business opportunities. It’ll be something to hang our hats on.”

The LOI triggers exclusive negotiations between the Government and ITM/Royal Caribbean for the Grand Lucayan’s sale, along with negotiations over a Heads of Agreement for the resort’s rebirth, creation of water-based adventure theme parks at Port Lucaya and Freeport Harbour, additional cruise berths and transportation links between the two sites.

The ITM Group/Royal Caribbean consortium is proposing to invest $195m in phase one of its project alone, a figure that includes the $65m resort purchase price, over a 24-month period. Around 2,000 jobs will be created as a result of an extra two million cruise passenger visitors to Freeport annually, attracted by its transformation into a “world-class destination”.

Mr Sarles said the increased jobs and activity will yield an economic “trickle down” effect that impacts every aspect of Freeport’s economy, including real estate. Employees will need increased rental and other housing options, boosting both demand and rates for landlords/property developers.

“We’re a diamond in the rough, and if we get through everything it will be a game changer for Freeport,” he told Tribune Business. “It’s going to affect every aspect of real estate - everything from low income to high-end beach front. And people are looking at commercial opportunities.

“For the last year or two I’ve been sitting across from a closed casino in my office in the former Memories property. I’m very excited about the growth in foot traffic, impacting Port Lucaya across the way. I’m hoping it will stimulate interest in derelict land and buildings, and people will come to town.

“We’ve lost a lot of population in the last few years,” Mr Sarles continued. “People have gone off to Nassau and the Family Islands, and I’m sure a lot of them want to come back with our infrastructure.

“It’s not a done deal. It’s an LOI. There’s a due diligence period, but Carnival, Royal Caribbean and the Western Atlantic University Medical School, which I also understand is coming on stream, that’s really what we need to have a prosperous island. We’ve always been the bridesmaid, never the bride, and I’m hoping it’s Freeport’s time now.”

Mr Sarles expressed hope that ITM/Royal Caribbean’s Grand Lucayan investment will also draw increased airlift to Grand Bahama, which he described as “something we’ve always lacked”.

He was particularly enthused about suggestions Royal Caribbean might use Freeport as a “home port”, with passengers flying into Grand Bahama to join the ship there and staying overnight in the hotel. Dionisio D’Aguilar, minister of tourism and aviation, last week tempered such expectations given The Bahamas’ proximity to the major Florida home ports.

Still, Mr Sarles said it had “always been key” for Grand Bahama’s stopover tourism industry to attract direct airlift from major North American hubs such as New York, Toronto and Boston rather than forcing visitors to connect via Miami.

“Carnival and Royal Caribbean will bring a lot of bodies to the island on ship,” he added. “It’s going to open up a form of tourism we’ve not had.” Besides the jobs and entrepreneurial spin-offs created in sectors such as retail, restaurants and shore excursions/attraction providers, Mr Sarles said the extra activity may end the “wait and see” among potential real estate buyers.

“In the real estate market we feel things before anything else,” he explained. “This may be the missing element to drive the real estate market. A lot of amenities will pop up and change the quality of life.

“Right now we’re a buyer’s market, but things could easily shift to be a seller’s market as there’s not much inventor. When things take off it will create demand and stimulate development to build condos on the beach like in Nassau, which we’ve not had.

“We’ve had a lot of things not happen, but it feels like these are solid companies. I think we’ve got the right players in position.”