The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Bahama Chamber of Commerce’s president yesterday urged the newly-elected government to make the Grand Lucayan’s sale “a high priority” and get it “across the goal line” as rapidly as possible.

Greg Laroda told Tribune Business he wanted negotiations for the disposal of the last-government owned resort completed “yesterday” so that Grand Bahama’s Dorian and COVID-battered economy would have a chance to “jumpstart”.

“I think that should obviously be one of the high priority items they need to be looking at in addition to others,” Mr Laroda said of the stalled resort sale. “I think that’s something that’s right up there. Definitely, we in Grand Bahama would like to know what the status of that deal is, whether it’s going to materialise or not, and what the Government is going to do to try and bring that situation to a conclusion.

“We look forward to talking to them about it - whatever needs to take place to resume talks, what barriers exist in place to prevent the deal closing need to be a focus. If the deal is not going to close with Royal Caribbean, I’d hate for it to go on for another six to 12 months, so we need to expedite the removal of any barriers to the sale so it can happen.

“In the event it cannot happen, we need to move on to an alternative buyers, or someone to manage it [the hotel] or develop and manage it. We need to do something to get the hotel up and running sooner rather than later.”

Dionisio D’Aguilar, the former minister of tourism and aviation, last month blamed the ITM/Royal Caribbean joint venture’s failure to reach agreement on a separate deal with the Hutchison Whampoa-owned Freeport Harbour Company for delaying the Grand Lucayan’s sale.

He revealed that concluding negotiations over Freeport Harbour’s redevelopment - including the addition of new cruise berths - was a “condition precedent” that must be satisfied before the joint venture will acquire the resort from the Government - a situation that has prevailed through last week’s general election.

“One of the main reasons this deal has not been able to come to a conclusion is there is a condition precedent, and the condition precedent is for Royal Caribbean and Freeport Harbour Company to seal their deal, and that has not happened,” Mr D’Aguilar disclosed then to this newspaper.

“Once that happens that triggers the ability to seal our deal. They want to get their deal done to make sure they have a place to go. It’s extremely frustrating that Freeport Harbour Company and Royal Caribbean have taken this long to seal a deal. It’s obviously impacted our ability to conclude our negotiations with Royal Caribbean. We can negotiate all we want, but this is a condition precedent of theirs.

“They don’t want to purchase the hotel and real estate, and buy into that, and end up not getting a deal at the port. They want to get that done. Clearly it’s frustrating that this has not concluded yet. We wanted it to conclude, but remain optimistic it’s going to happen,” the minister continued.

“I’m advised they’re at the commas and colons stage of concluding their agreement, putting them in the right place. Hopefully it’s imminent. We’re ready to move forward, but are waiting for this condition precedent. We’re waiting for Freeport Harbour Company and Royal Caribbean to finalise their agreement. We’re almost ready to go, but nothing can move forward until we see this agreement.”

Newly-elected prime minister, Philip Davis, and deputy prime minister, Chester Cooper, will now have the task of determining whether to proceed with the ITM/Royal Caribbean deal or pursue alternative buyer options.

The harbour impasse will likely mean they have to get tough with Hutchison Whampoa, although former Grand Lucayan chairman, Michael Scott, had questioned the merits of a deal whose benefits to the Bahamian people he alleged had been watered down.

The sales agreement for the Grand Lucayan was signed just weeks before the COVID-19 pandemic, and its associated lockdowns and restrictions, hit The Bahamas. This, coupled with the cruise industry shutdown, inevitably delayed the deal and resulted in some terms being renegotiated, but the protracted wait since has led many to question whether it will still go through.

Tribune Business understands that the Minnis administration had been hoping for a July 23 closing, but that date came and went, with the Grand Lucayan now looking likely to drain the taxpayer by more than the $3m subsidy allocated in the 2021-2022 Budget. The resort’s $65m purchase, and subsequent subsidies to cover its operating costs, are likely to cost taxpayers will in excess of $100m.

The GB Chamber’s Mr Laroda, when asked about his hopes for the Grand Lucayan sale’s closing, replied: “Yesterday would be good. I think it does have to happen with some sort of urgency. It’s a low hanging fruit that should be able to move across the goal line pretty soon. The players are in place, the negotiations are taking place. Let’s just close it and get it up and running.

“Folks are just waiting to see something happen. You get to the point where you don’t want to hear talk; you want to have something happen and move to the next level. What we have been saying for years is we are lacking the next big investment in Grand Bahama; some large injection that could bring about additional employment even to the extent of getting some folks who have left back to the island to help us. It’s the problem we have with the critical mass being so low.”