The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Grand Bahama Chamber of Commerce’s president yesterday urged the Government to be more forthcoming with the status of the $100m Grand Lucayan sale to Electra America Hospitality Group.

James Carey told Tribune Business he was unaware that the initial 60-day due diligence period, the first step towards selling the property, had been extended for a further 15 days to this week as he called for more transparency on the progress of negotiations.

“We would like to know what’s happening with the deal. This is not good, because basically there are a number of things in Grand Bahama that have stalled. They have talked for years about a new hospital and there is no new hospital,” he added. “In more recent times they talked about an airport, and equally we don’t know what’s happening in that regard and, of course, with the Grand Lucayan. I can’t say that the deal has blown up because I don’t know.”

There have been no indications that talks with Electra America have run into difficulties, although much remains to be done to close the transaction, including signing a sales agreement; concluding a Heads of Agreement with the Government; and completing underlying agreements such as that governed by the Hotels Encouragement Act which details the tax breaks/investment incentives that the investor will get.

The Grand Lucayan property was acquired by the former Minnis administration, which paid Hutchison Whampoa’s real estate arm $65m in September 2018. The objective was to secure a rapid exit by finding a private sector buyer, and the then-government thought this goal had been achieved when it signed a sales agreement with the ITM Group/Royal Caribbean Cruise Lines consortium in March 2020.

However, COVID intervened, and the incoming Davis administration agreed with its predecessor’s Grand Lucayan Board that the terms of the ITM/Royal Caribbean deal had been watered down to such an extent that there were insufficient benefits to The Bahamas and its people to allow the deal to proceed. Both sides agreed to mutually part ways, and the Government initiated a new sales process that identified Electra America as the preferred bidder.

Mr Carey said yesterday: “It’s not looking particularly promising at the moment, and we work on the basis that people like to brag and talk about positive things that are happening, but we’re always reluctant to talk about the negative side, so one can presume that the sale is not going as planned, and that’s where we’re at right now.”

The Grand Lucayan resort will require “substantial investment”, with Electra America having pledged to invest some $200m in its upgrade, and its redevelopment will be inextricably linked with the rebuilding of Grand Bahama International Airport (GBIA).

“I understand that the purchasers of the hotel are looking for some definitive timelines on the airport itself, because a hotel of that magnitude needs the airlift and the right promotion for the hotel to be filled and understandably so,” Mr Carey said. “They all go hand in hand. We just can’t see the light at the end of the tunnel right now, but it’s in the power of the authorities to make it happen.

“The airport is important for the island, period, and it is not just for tourism with the hotels, but you also have a preponderance of Airbnbs who are depending on the airport being open to bring people in. So the airport is very critical and, of course, residents love to travel as well, so the airport is a critical component and no city that is worth it’s salt can survive without an airport.”

Chester Cooper, deputy prime minister, said during his Budget presentation said three “credible” investors had expressed interest in redeveloping Grand Bahama International Airport via a public-private partnership (PPP) although he did not name them.

“I am pleased to advise that as a result of the RFP (Request for Proposal) process, we have three credible suitors for the redevelopment of a world-class Grand Bahama International Airport. They’re credible with a track record and their own money so we expect construction to be completed by January 2025,” he added.