The Tribune

• DNP co-chair: ‘You never see a Hilton shut in a city’

• Shows how ‘deep and difficult’ it is to revive Bay St.

• Gov’t, private sector need rethink over downtown

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Downtown Nassau Partnership’s (DNP) co-chair yesterday said the British Colonial’s closure shows the destination “is not functioning”, and added: “You never see a Hilton shut in a city”.

Charles Klonaris told Tribune Business that the resort’s plight highlights the wider ills still gripping downtown Nassau as he urged both the Government and private sector to rethink plans for reviving Bay Street and the wider city area.

Asserting that all retail, restaurant and attraction operators “should be concerned” by the situation, he argued that the British Colonial’s fate went beyond just the immediate impact on them. “It’s more than just myself and other retailers,” Mr Klonaris told this newspaper.

“It’s indicative of how deep and difficult it is to revive the city. Obviously there have been some improvements thus far, but for the Hilton to close it’s an indication that the city is not functioning properly. The Government needs to look at the city itself. As it stands, it is not functioning properly.”

While the Nassau Cruise Port’s near-$300m transformation is intended to act as a catalyst for the city’s revival, and spur both landlords and businesses to enhance their properties and product offerings, Mr Klonaris added that “the locals are not benefiting from that right now”.

“It’s a sign that the city has more serious problems than what you see on the surface,” the DNP co-chair reiterated of the British Colonial’s looming “indefinite” closure in just under one month’s time. “It’s very seldom you see a Hilton close in a city. It’s never heard of.

“It shows how serious the problem is for them to say they have not been doing well. It’s really indicative of the state of the city of Nassau. It’s more than just the Hilton. The Hilton is really the result of a city that is not functioning. The Government and private sector has to sit down and determine how we go forward.”

Successive administrations have targeted the city’s transformation as a policy priority over the past two decades, but progress has been painfully slow - due primarily to the difficulty of unifying a large number of property owners and businesses, with varied and sometimes competing interests, on the direction change should take.

Some momentum has been provided by the harbourfront boardwalk project; Pompey Square; and efforts to upgrade downtown’s appearance and cleanliness, but many observers would likely argue that change has been painfully slow. Efforts, for example, to establish the city of Nassau as a Business Improvement District have yet to come to fruition.

In the meantime, the area east of East Street has become a so-called ‘twilight zone’ of abandoned and derelict buildings, and minimal economic activity, every since the shipping companies departed for Arawak Cay in 2012. And law firms, financial services providers and other high-margin, high-end businesses have continued to relocate to western New Providence in the meantime.

A solution for the city’s long-standing parking problems has also yet to be implemented, with many believing that its long-term revival lies in making it a ‘living’ destination by creating residential accommodation that will encourage Bahamians to return from the suburbs and make the area their home.

Mr Klonaris described the British Colonial Hilton’s closure as “a shame because it’s been a landmark for ever. It was the anchor going way back to when it was known as the British Colonial Hotel. It has a very rich history, and it’s sad to see it closing.

“The closure will have a serious impact on some of the small outlets in the surrounding area. Hopefully, the Margaritaville might take up some of the slack but you never recover when something as large as a Hilton operation closes down”.

Michael Maura, the Nassau Cruise Port’s chief executive, said that while the British Colonial Hilton’s history meant the closure would have an emotional impact for some, good may yet come out of it if new investment in the property is the ultimate result.

“There is an expression that ‘nothing is so bad that it’s not good for something’,” he added. “I look at it as creating an opportunity for downtown from the perspective of a visionary investor that sees the British Colonial property, which anchors the western end of Bay Street, and who comes down and does a material renovation of that property.

“That is required because that property has aged, and you have a brand new Margaritaville next door, the relatively new Baha Mar, and Atlantis undertaking a renovation with Pharrell Williams and his partner, creating a brand new resort over there. So I think it requires that the British Colonial property undergoes a major overhaul.”

It is unclear, though, if the resort’s owner, China Construction America (CCA), the Beijing-owned contractor that is thought to have relatively deep pockets, would be interested in selling a resort it acquired in 2014 for between $50m-$60m. There was speculation last year, though, that CCA was exploring the potential sale of both the British Colonial Hilton and The Pointe.

Robert Farquharson, the Government’s director of labour, and Darrin Woods, the Bahamas Hotel, Catering and Allied Workers Union’s (BHCAWU) president, both told Tribune Business they had been informed that the British Colonial Hilton’s closure was sparked by the hotel’s relatively poor performance and absence of any signs this will improve short-term.

The British Colonial Hilton is likely to have been hit hardest than many hotels by the COVID-19 pandemic because it catered primarily to business travellers - the market segment that has suffered most.

The 291-room property was focused heavily on the groups, meetings, conventions and conferences market that is among the last to rebound from the pandemic’s clutches. This was not just foreign groups, which continue to be impacted by US health advisories, but the local corporate market that now relies on Zoom calls as opposed to face-to-face meetings.

Mr Klonaris yesterday agreed that the City of Nassau Revitalisation Act tax breaks were not a cure-all for downtown’s ills by themselves, and conceded that “off-hand, I don’t have the answer right now” on how Bay Street and wider downtown’s revival can be achieved.

“The incentives by themselves are not the sole answer to the revival of the city of Nassau. That is not the total answer for the revitalisation of the city. It’s much more than that. It’s a serious problem. The Government, retailers, restaurants and developers should sit down to determine going forward how we revitalise the city.”

The incentives referred to by Mr Klonaris are those import duty, Excise Tax, VAT and real property tax breaks granted to downtown property owners and businesses by the City of Nassau Revitalisation Act if they invest in improving their assets. Yet, while the likes of Graycliff have taken advantage of these, there has not been a wholesale take-up across downtown.

Michael Pintard, the Opposition’s leader, last night urged that “every attempt should be made to delay or avoid closure”. He said in a statement: “In the event that the discussions with the owners confirm that closure is unavoidable and time sensitive, then the Government should agitate for a phased approach to closure while efforts are made to assist workers as they transition into other roles elsewhere.

“Every effort should be made to explore ways of helping the owners to ensure that such closure would be short-term.” Suggest that the closure move had “caught many off-guard”, Mr Pintard questioned if CCA had requested government assistance to keep the resort open and whether the Davis administration was still negotiating on this.