The Tribune

By NEIL HARTNELL

and FAY SIMMONS

Tribune Business Reporters

nhartnell@tribunemedia.net

Royal Caribbean Cruise Lines yesterday confirmed it “continues to explore future projects” with its interest in acquiring Freeport’s Xanadu hotel hailed as a move that can attract other investors.

The cruise giant, in a statement, neither confirmed nor denied Tribune Business’ exclusive story that it is exploring the purchase of the long-shuttered resort and four adjoining tracts of land owned by Harcourt Developments to its west for development of a beachfront resort, water park or associated amenities.

“We are always assessing our portfolio and continue to explore future projects to offer the best vacation experiences for our guests and drive economic growth in the communities we visit,” a Royal Caribbean spokesperson said.

Royal Caribbean’s interest in what is estimated to be a total 40-50 acre site, should it acquire all the targeted land parcels, is a signal that it must have reached - or be close to sealing - a deal for Freeport Harbour’s transformation. It has been locked in negotiations with Freeport Harbour Company, which is 50/50 owned by Hutchison Whampoa and the GBPA’s Port Group Ltd affiliate, for several years.

James Carey, Grand Bahama Chamber of Commerce president, described the Royal Caribbean interest as “good news” for Freeport’s continued economic revival. He added that the only concern might be continued public access to the beach at that site for, while not designated as public, it has been regularly used by locals ever since the hotel’s closure.

“It appears that it might be something that’s in the works,” Mr Carey said of the cruise giant’s plans. “I’ve tried to reach out to Mr [Mario] Donato (Xanadu’s current owner) to see, as I know him well, and find out if there’s anything more substantial.

“I hope it goes well. I know the hotel is just sitting there, as it has been for a number of years, and ultimately nature will take its way if it’s not recovered and renovated in due time. The fact Royal Caribbean has an interest is good news. Royal Caribbean is a good company, and I believe if it is reopened it speaks to a lot of employment all the way through, probably a few hundred people.”

The GB Chamber chief warned, though, that the issue of beach access may have to be handled sensitively. “The beach there is very popular,” he added. “Although not a public beach it’s been treated as such, and with the acquisition of the available land I know there will be an outcry. It’s a beautiful tract of land, a great area and I hope it does go well.

“Particularly now there is a new air of confidence in Freeport. From my perspective I feel as if Freeport’s getting better. There’s more investment. Persons on the ground are anticipating things are moving ahead. I don’t think it will change overnight, there’s anticipation that things are looking up.

“Some might come from the season we are in, but there are definitely positive signs here, and that’s a good news for our economic recovery..... There are people who are positive, upbeat, and have indicated they know of other persons looking at Freeport. What Royal Caribbean is doing is a positive step that will encourage other people to invest.”

Mr Carey, though, urged the Government to address the “lingering questions” over the status of Grand Bahama International Airport’s $200m redevelopment and the Grand Lucayan’s sale sooner rather than later. “I saw where the Prime Minister was supposed to make a statement,” he added.

“Why wait? There are rumours about that the prior agreement [for the airport] may have come to an end. We’ve been waiting since March. I don’t understand why we go through this process when the public needs to know what’s happening.”

Magnus Alnebeck, Pelican Bay’s general manager, told Tribune Business that a developer of Royal Caribbean’s calibre will help to attract other investors to Grand Bahama. “Any economic activity in Freeport would be positive,” he said. “The reality is that the Xanadu has been closed since 2011, 2012. Then it was really running on its last legs since 2004.

“Of course, that was when the Princess - the Royal Oasis - closed. If we can get some economic activity in that part of Freeport it would be great. They [Royal Caribbean] are solid people. I think that property [the Xanadu] is a tear down and really a land sale to get rid of a derelict, rotting building. This the best way to attract investment as investors tend to follow other investors.”

Tribune Business had previously been told that Royal Caribbean was seeking a more tourist-friendly location for the water park it had initially planned to locate at Freeport Harbour, which has a more industrial feel, hence its interest in the Xanadu.

Should the cruise line’s plans come to fruition, this newspaper was told that ITM Group, its Mexican partner on the aborted Grand Lucayan venture, and their Holistica joint venture will ultimately operate the proposed amenities and attractions.

Another source, also aware of developments, said they understood that the Xanadu and Harcourt tracts are just one of multiple Grand Bahama locations that Royal Caribbean is exploring to see if they meet its needs and an appropriate deal can be worked out.

“It would augment the cruise offering of Bahamas Ports Investments in the harbour,” they added, referring to the Royal Caribbean group’s name. “It would combine a world-class cruise port with a world-class beach resort.” The source added that they were also familiar with Colliers’ involvement in marketing the Harcourt properties.

Built in 1968 by US shipping tycoon, D. K. Ludwig, the Xanadu established itself as a venue for the so-called “Rat Pack” - the likes of Frank Sinatra, Sammy Davis Jnr, Cary Grant and Dean Martin - as well as accommodating reclusive billionaire Howard Hughes, who once lived in its 13th storey penthouse.

The 184-room property was acquired by Mr Donato in 1987, but it ultimately closed in 2011. The Xanadu is listed for a $25m asking price on Bahama Islands Properties’ website, which says: “The 184 rooms has it all.

“Set on a world class beach, it also boasts a 75-slip marina with incredible potential, and in addition more than 20-plus acres strategically located near downtown and the airport. It is perfect for aggressive rooms and amenities expansion or adding condominiums.” Another realtor, James Sarles Realty, has the resort listed for $35m.