The Grand Lucayan resort.
By RASHAD ROLLE
Tribune Senior Reporter
rrolle@tribunemedia.net
THE agreement between the government and Royal Caribbean Cruise Lines/ITM Group for the acquisition of the Grand Lucayan resort has been cancelled.
Deputy Prime Minister and Minister of Tourism, Investments and Aviation Chester Cooper yesterday cited bad terms negotiated under the Minnis administration and no clarity on how quickly the project will be advanced.
In a statement, Mr Cooper said a Cabinet sub-committee involving himself, Minister of Economic Affairs Michael Halkitis and Attorney General Ryan Pinder examined the deal and concluded “the way it was structured was not in the best interests of the Bahamian people”.
He said on Monday the boards of Lucayan Renewal Holdings Limited and Lucayan Beach Casino Holdings “terminated by mutual consent the 2020 purchase agreement between themselves and the Bahamas Ports Investments Limited, the joint partnership between RCL and ITM Group.”
Mr Cooper said the Minnis administration’s agreement to lend BPI money to renovate and develop the property was a no-go.
He said the ideal candidate would be a company that has experience, significant resources, a vision for the property and a commitment to develop Grand Bahama as a destination.
“The issue,” he said, “of the owner financing for the redevelopment, or the government providing funding for the redevelopment we thought was simply a no-go. It was a $50m loan to RCl and ITM Group in their subsidiary company Bahamas Ports Investments Limited. And then there was not a firm commitment to complete the redevelopment in the shortest possible time frame. We were not satisfied that they were committed with the timelines that the new government would like to see and there were various other elements of the deal that we simply did not find feasible, acceptable for the Bahamian people.”
Mr Cooper said to maintain and operate the Grand Lucayan property, the government will likely continue to expend $1.2m to $1.5m per month, money he said is crucial to maintain the value of the property and the attractiveness of Grand Bahama as a tourism destination.
“We’ve taken the decision as I’ve indicated to keep the property open to maintain value, to maintain the property itself, to provide some employment for the few persons who continue to be employed and to really keep the destination alive,” he said. “But let me say to you that we want to sell the property in the shortest possible time frame. We are committed to doing a deal expeditiously.”
The government has spent more than $150m on the Grand Lucayan resort. Mr Cooper said in choosing a buyer, the Davis administration hopes the government will recover its investment in the project and restore the resort with “significantly more investment”.
Former Tourism Minister Dionisio D’Aguilar blamed the struggling effort to nail down a deal for the resort largely on a “condition precedent” that required RCL to finalise its deal with the Freeport Harbour Company for the port in Grand Bahama.
Mr Cooper said conversations between Royal Caribbean and Hutchison Whampoa for the port are ongoing.
“That, of course, is a private negotiation,” he said. “They’ve indicated that while they’ve made some progress, it didn’t advance as quickly as they would like. It’s a matter for them. The government supports the transaction and should they reach an agreement, the government will expeditiously process the application for approval.”
Mr Cooper said the interest of new investors in the property will likely not depend on the status of the port development. RCL wants to develop the port into a world-class facility.
“I don’t think that one has much to do with the other, quite frankly,” Mr Cooper said. “The more activity there is on the island, naturally the better it will be for a new investor into the property. But one is not contingent upon the other. It was a bad idea to couple them at the very beginning because here you have two private entities negotiating with each other on separate sets of circumstances that impact the deal on the Grand Lucayan resort while we sit and while the property deteriorates and people continue to be unemployed. That was ill-conceived and we took quick steps to decouple the deal so that we could move on with a transaction on the hotel.”
Mr Cooper said the government is open to local and foreign interests in the property.
“The reality of it is we always have a preference for local participation but these are some very serious times in Grand Bahama and therefore we are going to pick the best buyer with vision, significant resources and who is willing and prepared to share in the overall strategic long-term direction for the island of Grand Bahama,” he said.
The Minnis administration purchased the hotel for $65 million in August 2018. Despite criticism over the move, the Minnis administration maintained it only planned to hold on to the hotel to preserve the island’s economy before selling it to a viable developer.
However, the sale to Royal Caribbean/ITM was not finalised before the Minnis administration was voted out of office in September.
Comments
TimesUp 3 years ago
Its my uneducated opinion that the hotel was only leverage or a condition in the sales agreement for the port. Its likely that RCCL never wanted the hotel or at best saw it as a long term hold investment as a freebie for when times are more conducive for investment. If they did anything with it in the next 10 years I suggest it would have been to use as leverage by RCCL against the U.S! those shut downs and threats to move their starting port to Freeport would have had a lot more weight with the hotel in their pocket.
In short if any of this is remotely true it would suggest we get swing then and we get swing now!
I've said it since the hotel closed under the PLP's last reign that no one wants that crumbling 2 star hotel. The Government would have been better spending its money to knock it down and prepare the property to be shown to investors.
KapunkleUp 3 years ago
Picture reminds me of the Holiday Inn on PI in its last couple of years before being knocked down.
sheeprunner12 3 years ago
So, after reading the comments above, what should be the best way forward (not political-speak)?????
TimesUp 3 years ago
It should be knocked down, a known development company (not crooks) should be gifted the property and an agreement should be formed between the owner of port Lucaya and the developers to facilitate the creation of Freeports first real estate multi unit since the 70s. This should be funded partly by the developer and partly by a share option for locals to invest in. The property should focus on average middle to upper middle class Americans and should consist of some air b and b units, a few small boutique hotels, apartments to own, convention center, shopping village, dining and night life.
Have the whole area gated and provide paid parking for locals. Have the marina included to allow boaters. All in all allow a real-estate/tourist Mecca that is fun and diverse that Bahamians can invest in and become a part of while also enjoying themselves!
And not a cruise ship in sight!
sheeprunner12 3 years ago
Well, speak this vision into Cooper's ear
John 3 years ago
BUT WAIT! The hotel has great potential. Maybe it was a mistake to sell it to Royal Caribbean. Remember when the focus was changed in Nassau from hotel guests to cruise ship passengers. And all inclusive visitors? It destroyed Bay Street. Bay Street went from a linen, jewelry and China Mecca to a T Shirt and souvenir junkyard, from eloquently dressed high value visitors to tourists in bathing suits. Grand Bahama needs a Lucaya. They need depth to their tourism market Other than just cruise ships that are intending to move their operations off shore. A reason to keep the lights on after sunset and to have activities going on after dark and when ships are not in port. And the hotel must have a draw that is exclusive. Casinos are proven not to be that particular magnet at this time. And if Freeport is not rebuilt and revitalized, the cruise will eventually pull out again. Bay Street also needs a new lifeline. That will compliment the Ports ReDevelopment. Some talks are that Bay Street will be realigned with major businesses facing the waterfront, and a broad walk constructed from The Bridge in the East to The Pointe in the West. And Condos, Townhomes and upper class apartments will be added to prevent downtown from dying at 5:00 pm
Maximilianotto 3 years ago
The next buyer will pay $1,00 and ask for $100 m government loan. The 6 “interested investors” are wishful thinking, simply don’t exist.
Proguing 3 years ago
Yep they will also ask for tax exemptions, additional land for a golf etc.
tribanon 3 years ago
Bottom line: Royal Caribbean, Hutchison Whampoa; the very evil and crooked Hubert Minnis; the equally crooked and most devious Dionsio D'Aguilar; the even more crooked Michael Scott; the very dishonourable yellow-fingered Davis; the sleasy and slimey as they come Chester Cooper; and the most dishonourable Ryan Pinder, have all royally screwed the Bahamian people because they are in effect "owned" by Royal Caribbean and the CCP.
The Davis led PLP government has effectively given the port in Freeport and the western end of Paradise Island (including sea-bed) to Royal Caribbean for nothing while letting them walk away from purchasing and fixing up the Lucayan Hotel property. And to think our corrupt political elite have also served up Nassau Harbour on a platter to their corrupt cronies. The stench of all the blatant corruption here that robs the dumbed-down ignorant Bahamian people is nothing short of shocking.
Proguing 3 years ago
Surely a total fiasco, and to think that we are presently experiencing a historic surge in visitors to our islands. Unfortunately, Freeport is unable to benefit from it. What a total waste…
tribanon 3 years ago
Cruise ship visitors have very little to contribute to our economy after their pockets have been picked clean by the cruise ship owners and operators. It has been that way for decades now and is the principal reason why most parts of downtown Nassau have been turned into a graveyard.
Meanwhile our corrupt political elite and the cruise line companies have been buying up as much downtown Nassau property as they possibly can, but only at fire sale prices. The game plan is that one day all of downtown Nassau will eventually be owned by a consortium of very greedy cruise line enterprises like Royal Caribbean, Carnival, Disney, etc. and form part of their ruthless, all-inclusive and all-for-them business model with Bahamians being a source of low cost labour for their Nassau empire.
TalRussell 3 years ago
De Uk Colony's out island of Freeport's new minister is now charged with overseeing de sad state of affairs at de Grand Lucayan Resort, which is in dire need of a local catholic priest-exorcists to move-in to confront de ghost of former tourism minister Dionisio James D'Aguilar's which has been encountered walking de corridors Freeport's grand hotel and everything else like this and that might spell a new walkaway from de PopoulacesPurse's $200+ million done dumped down de drains de run-down, hurricane damaged shantytown excuse for a government owned and run hotel, ― Yes?
hrysippus 3 years ago
The corruption smeared Pindling adminstration destriyed Freeport decades ago with that Bend or Break speech. It broke.
BMW 3 years ago
Bingo!!!!
tribanon 2 years, 12 months ago
Why are Minnis, D'Aguilar and Scott still walking around as free men? They each made a small fortune off of their chicanery and shenanigans involving the Lucayan Hotel property that greatly benefitted Royal Caribbean, Hutchison Whampoa and the owners of the Grand Bahama Port Authority. All three of these crooks, Minnis, D'Aguilar and Scott, should now be sharing one prison cell with one slop bucket.
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