The Tribune

The Bahamian entrepreneur with a rival claim to Paradise Island crown land sought by Royal Caribbean yesterday said he was “totally flabbergasted” by the lease terms granted to the cruise giant.

Toby Smith, who is seeking a Supreme Court declaration that he has a valid, binding lease to two acres of Crown Land also wanted by Royal Caribbean, told Tribune Business he had only been offered one renewal term compared to the minimum of five given to the cruise line.

The Paradise Island Lighthouse & Beach Club principal, speaking after this newspaper revealed details of the deal signed by the former Minnis administration with Royal Caribbean on May 25, 2021, said his terms provided for an initial 21-year lease with just one extension.

Royal Caribbean, though, in addition to its original 25-year lease, has been granted an initial option to renew for the same duration and “no less than four additional options” - all for a 25-year period.

In effect, provided it wants to maintain its Royal Beach Club, complies with the lease terms and meets the deadline to send notice of its wish to extend the lease three months before it expires, Royal Caribbean can maintain use of those seven Crown Land acres for up to 150 years.

Arguing that the lease terms “demonstrate Minnis’ favouritism towards foreigners, Mr Smith told this newspaper of the cruise line’s lease: “This is a revelation to me. I’m absolutely astounded at not only the audacity of the past prime minister, but also the audacity of Royal Caribbean in being so coy in releasing the full details of what they’re trying to do.”

That was a reference to remarks by James Boink, Royal Caribbean’s vice-president of private destinations, who told a virtual meeting held by the Department of Environmental Planning and Protection (DEPP) earlier this year that the seven-acre Crown Land parcel would be returned to the Bahamian people’s ownership eventually but did not state this might take up to 150 years.

Responding to a question from Ricardo Miller, he replied: “Our Crown Land lease is for 25 years with rights to renew and, yes, the land does revert back to The Bahamas.”

Suggesting that Royal Caribbean “finish what they have started at the Grand Lucayan”, and “either walk away or put their money where their mouth is” before focusing on Paradise Island, Mr Smith also queried whether Town Planning Committee approval for the Royal Beach Club had been “rushed through by Minnis”.

He added: “Paradise Island Lighthouse & Beach Club is pushing ahead with all-Bahamian plans to restore the lighthouse, which will be funded by revenues from our beach club. We’re absolutely flabbergasted that Minnis provided a minimum150-year lease to Royal Caribbean while myself, as a Bahamian project, was only offered a 21-year lease with a one-term rollover.”

This was confirmed by a November 14, 2018, memorandum written by now-Cabinet secretary, Nicole Campbell, to Richard Hardy, acting director at the Department of Lands and Surveys. “The minister responsible for lands agreed to negotiate a 21-year Crown Land lease agreement with Paradise Island Lighthouse and Beach Club for five acres of Crown Land in the vicinity of the Paradise Island Lighthouse and Colonial Beach,” she wrote.

Mr Smith, who is alleging that his rival lease became valid and binding upon the Government some 16 months before it signed the rival document with Royal Caribbean, again accused the former administration of “double dealing” Crown Land that is held in trust for the Bahamian people’s benefits.

Challenging whether the previous administration should have signed an agreement involving land it knew was tied-up in litigation, the entrepreneur added: “I remain confident in this new day government. Bahamians have been challenged to be brave, and in this David versus Goliath battle I sincerely hope that I am demonstrating that I am being brave.

“I wish to extend my gratitude to Bahamians who stand with me directly and indirectly to support an all-Bahamian project. We shall be victorious.”

Meanwhile, a prominent Bahamian realtor yesterday voiced surprise that the Royal Caribbean lease’s rental rate was not indexed, or linked, to inflation. Mike Lightbourn, Coldwell Banker Lightbourn Realty’s president, told Tribune Business that long-term leases were typically tied to the cost of living so that rental rates rose in line with this.

“I don’t see any long-term leases without the cost of living tied into it,” he explained. “There should be a cost of living increase in that. Every long-term lease we do that.” As revealed by this newspaper, the lease commits Royal Caribbean to paying a flat annual $140,000 rent to the Government annually for the seven acres.

Over a 25-year lease, this amounts to $3.5m in total rental income with VAT at 10 percent contributing a further $350,000 to the Public Treasury. These sums pale when set aside the extra $26m in annual visitor spending that the Royal Beach Club is projected to generate, a figure that rises to $650m when extended over the initial 25-year lease term.

Joe Darville, Save the Bays chairman, yesterday slammed the lease terms negotiated by the Minnis administration as “a pittance” and “deplorable”. He told this newspaper: “I cannot believe the previous administration gave them [Royal Caribbean] a lease of 150 years. That’s two lifetimes for anyone who grows as old as 70.

“It’s deplorable. I don’t understand it. For God’s sake, we don’t need them that bad, and it’s an absolute pittance we are going to get for it. It’s ridiculous. I’m really dismayed that those who represent our best interests in the country can make a secret deal with a foreign entity. That aches at my heart.”

Mr Darville, calling on the Davis administration to reject the Royal Beach Club, said the area targeted by Royal Caribbean could not support a project of that nature. And he also warned Mr Smith to be careful about the environmental impact from his ambitions.

Royal Caribbean has steadily amassed around 13.5 acres on Paradise Island’s western end by buying out private landowners in the area, but its efforts to lease the extra seven Crown Land acres have brought it into conflict with Mr Smith.

He is seeking himself to lease two Crown Land parcels at Paradise Island’s western end, one of which involves two acres around the lighthouse and another three acres for the “beach break” element of his own $2m project. Two of the acres sought by Mr Smith are included in Royal Caribbean’s Crown Land lease.

Mr Smith’s court action is alleging that he was granted a valid Crown Land lease over both parcels, including the lighthouse and the area at Colonial Beach for his “beach break” destination, which is now legally binding. This was denied by the Minnis administration.

The case is based on a January 7, 2020, letter from Richard Hardy, acting director of Lands and Surveys, that was headlined “approval for crown land lease” over the two tracts he wanted. This lease was agreed before Dr Minnis signed off on Royal Caribbean’s deal.