The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent realtor yesterday argued that The Bahamas must craft a robust “exit strategy” for when major foreign direct investment (FDI) projects “go south”, adding: “Surely we’ve learned from our mistakes?”

Mario Carey, the Better Homes and Gardens Real Estate MCR Group Bahamas principal, welcomed the numerous Heads of Agreement signed recently between the Davis administration and overseas investors but questioned whether these deals provide sufficient protection for the public’s interests such as Crown Land assets.

Citing Crown Land as an example, given that it is often leased or sold to investors to facilitate real estate-based projects, he told Tribune Business that the law may have to be reformed to enable the Government to quickly recover such assets should the development fail.

Otherwise land that belongs to the Bahamian people could be lost for years, becoming tied up in litigation or creditor/lender proceedings as investors seek to recover loans extended to a developer. And Mr Carey said there needed to be greater transparency and disclosure around these Heads of Agreement so that Bahamians can understand what these deals mean to them.

While developers frequently commit to creating a specific number of construction jobs, as well as hotel industry posts if it is a resort, the Better Homes chief suggested there should be obligations requiring them to “elevate Bahamians into higher roles” on the project and commitments to empower locals through professional development.

Mr Carey added that this would help ease the “brain drain”, where The Bahamas loses too many of its talented, university and college-educated graduates to jobs abroad. And he also called on the Government to stop approving work permits for foreign real estate salespersons brought in by developers to specifically work on their projects, arguing that there were more than enough qualified Bahamians to perform this role.

Asserting that The Bahamas is still “a third world country,” Mr Carey said there also needed to be more robust obligations imposed on developers to financially support in social infrastructure and other projects that benefit the communities which support them.

“It’s good to see all these Heads of Agreement signed, but what does it mean?” he queried to Tribune Business. “These Heads of Agreement bring jobs, construction jobs, but where are the high level jobs and obligation to elevate Bahamians into a higher role or become entrepreneurs in this space?

“I still don’t know how it is we have developers come into this country, and hire foreigners to sell and market their projects. We have over 1,000 licensed and qualified agents. Hiring expatriates doesn’t make sense to me. We approve the development, but how is it they get work permits to sell real estate when we have Bahamians who can do those jobs? Work permits are supposed to be for the jobs Bahamians can’t do. It’s a question that needs to be asked.”

Sticking with this theme, Mr Carey added: “How many of these projects empower Bahamians to get to the next level of professionalism, and how does that impact our brain drain and allow educated Bahamians to come back home?... The Government always seem to negotiate from a position of weakness.”

The Davis administration has signed multiple Heads of Agreement since taking office in September 2021, including the most recent deal last week with Penske Media Real Estate (PMR Bahamas) for the $170m Torch Cay development on southern Exuma. Other signings have involved a $250m cruise port for Long Island, the revival of the Cotton Bay project by Colombian billionaire, Luis Carlos Sarmiento, and the multi-million dollar Kakona project for south Abaco.

None of these investment deals, though, have been disclosed to the Bahamian public through being tabled in the House of Assembly. As a result, the terms are unknown, including what the Government will have foregone in duty, VAT, real property tax and other taxes and fees as part of the incentives package granted to investors.

“When the Government signs these Heads of Agreement, what is the exit strategy if they don’t perform, tie up land, Crown Land, and make promises that they don’t keep. What recourse does the Government have?” asked Mr Carey. “What we’ve seen over and over from foreign developers is the come in, get these deals, get these contracts and things go south.

“There’s no fast track for solving it. If the Government gives them all these concessions, if they don’t perform they can be taken back by the Government.” However, when it came to Crown Land and more immobile public assets granted to developers, he argued that legal amendments may be necessary to give the Government “fast track” powers to take possession or impose a lien over the property.

Noting that major Family Island projects often altered the character of those location through having to import a workforce from Nassau and elsewhere, Mr Carey said: “What happens if the development goes sideways and we’ve sacrificed all that? “

Calling on the Government to tighten requirements for developers to help finance school and hospital construction, and other public assets, he added: “We’re giving away duty, real property and other taxes. We’re giving developers the right to bring in foreigners, taking away jobs from Bahamians who are qualified, and not making them obligated to invest in social needs.

“We never get a full read of these Heads of Agreement and understand them. What do they mean? We want jobs. A $300m investment and 50 construction jobs, then what? What happens? When are we going to stop? Surely we’ve learned from our mistakes.

“It’s good that The Bahamas continues to attract the world. We have so many things going in our favour - location, weather, legislation. Behind all that are always the social problems and the need for a third world country to grow. We are a third world country. How are those being addressed?”