The Tribune

• Says Royal Caribbean ‘scaling back’ Crown Land

• Move would be ‘win for me and all Bahamians’

• Gov’t talking to cruise line; no word on reduction

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian entrepreneur has voiced renewed optimism that Royal Caribbean may be halting its “invasion” of his leased Crown Land after it purportedly submitted a revised proposal for its $110m Paradise Island project.

Toby Smith, the principal behind the $3m Paradise Island Lighthouse & Beach Club project, told Tribune Business it would represent “a win” not only for himself but “all Bahamians” if the cruise giant retreated from his development’s boundaries and scaled down its plans.

Multiple sources, speaking on condition of anonymity, also told this newspaper they understood Royal Caribbean had supplied the Davis administration with a revised project proposal that reduced the seven acres of Crown Land it had secured from its Minnis predecessor via an effective 150-year lease.

However, the Government neither confirmed nor denied that Royal Caribbean had submitted such revisions although it said talks over the latter’s Royal Beach Club destination were continuing. Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, told this newspaper in a statement: “Government is in ongoing dialogue with Royal Caribbean in relation to its proposed development on Paradise Island.

“This does not include any discussion in relation to land that is in dispute. The matter with Toby Smith remains before the court and we are not at liberty to speak to it.” That refers to the Supreme Court action Mr Smith launched against the Government, in which he is arguing that his two Crown Land leases on Paradise Island are legally binding and should be enforced.  

However, the Bahamian entrepreneur revealed that despite the ongoing litigation he remains in discussions with the Davis administration to move his project forward. Taking encouragement from recent reports, he told Tribune Business: “I understand through reliable sources that Royal Caribbean have presented a proposal to the Government on a reduced footprint of land that possibly does not continue their invasion of my land boundaries.

“That, in essence, would be a win for Paradise Island Lighthouse & Beach Club, and a win for all Bahamians that I am fighting for.” However, efforts to obtain confirmation of such a scaling down from Russell Benford, Royal Caribbean’s vice-president of government relations for the Americas, and other spokespersons for the cruise giant have proven fruitless despite multiple attempts being made.

“They were supposed to have a more toned down version of their plans that they were going to submit to the Government,” another source, speaking on condition of anonymity, said of Royal Caribbean’s Paradise Island ambitions. “They had approached the Government with a plan where they were going to decrease their footprint and ask for less Crown Land to do their development. The problem they’re having is that I understand the Government is not minded to do that.”

The source said the difficulty arose because Prime Minister Philip Davis KC, while in Opposition, had pledged that he would cancel any Crown Land lease in favour of Royal Caribbean. This promise came when Mr Smith asserted that he secured his deal before the cruise giant, and that the former Minnis administration sought to ditch his project to make way for Royal Caribbean after realising its mistake. 

Some of the seven-acre tract leased to Royal Caribbean is included among one of the two Crown Land parcels that Mr Smith says he holds a valid lease for, thus meaning the Government allegedly dealt the same land assets near Colonial Beach on Paradise Island’s western end to two separate investors within the space of a year.

Meanwhile, Mr Smith, backing Mr Cooper’s call for greater Bahamian participation in major investment projects, said he was continuing to speak with the Davis administration about his own plans. “I continue a healthy dialogue with the Government, and it’s a matter we’re discussing politely as professionals,” he told Tribune Business.

“I’m very grateful to the Bahamian public for their support, which suggests that in the court of public opinion that my project is way ahead of the game over Royal Caribbean. Even Minnis didn’t like the lease he gave to Royal Caribbean because he already wants to reduce the terms from a 150-year minimum.”

Warning the cruise giant it could be in “contempt of court” if it is negotiating for Crown Land tied-up in his legal battle with the Government, Mr Smith added: “You’d better believe that if Royal Caribbean are negotiating land that is in litigation before the Supreme Court of The Bahamas, it’s a snub to The Bahamas, the Bahamian people and the Supreme Court, and potentially could put them in contempt of court.”

The entrepreneur again called for a detailed breakdown of cruise passenger spending, and the industry’s economic benefits to The Bahamas, once payments by local retailers and tour/excursion providers for marketing their businesses, and directing visitors to them, are subtracted.

“I read with interest the comments by Michael Maura, the chief executive of Nassau Cruise Port, that the offerings of excursions in The Bahamas are dismal,” Mr Smith said. “I agree with Mike, and I also endorse any entity, including Nassau Cruise Port, that supports Bahamian-owned and operated excursions. 

“While the number of cruise passengers is hitting new records, I would like to see a detailed breakdown of the spending of those cruise passengers so that Bahamians can see that, after the cruise lines have taken their commissions from local excursions and Bay Street retailers - after all these subtractions are made - net net what ends up in the pockets of Bahamians.”

Royal Caribbean’s Paradise Island plans attracted renewed attention over the weekend after several Internet blog posts surfaced talking about the Royal Beach Club and showcasing artists impressions of what it will look like once constructed. One of these appeared on www.royalcaribbeanblog.com, although it includes a disclaimer that it is not directly affiliated with the cruise giant.

However, the appearance of these articles has reignited concern among Bahamian industries that rely on the cruise industry - Bay Street merchants, restaurants, tour and excursion providers, straw vendors, taxi drivers and others - that thousands of potential tourist customers will be sucked away to Royal Caribbean’s private Paradise Island destination to the detriment of their earnings. They will cross the harbour via water ferry without touching Bay Street.

The cruise line, though, has repeatedly said that the Royal Beach Club does not have space to accommodate all its Nassau visitors and it has no intention of keeping them there for the day. It added that they will be able to circulate freely in Nassau and Mr Maura, the cruise port chief, last week made the point that with 20,0000-plus passengers arriving in Nassau daily his facility and its attractions can only accommodate between 5,000-7,000 at any one time.

The Royal Beach Club is forecast to generate $26m in extra annual visitor spending, a figure that rises to $650m when extended over the initial 25-year lease term. Royal Caribbean previously said its $110m Paradise Island investment will boost overall visitor spending by $1bn over a ten-year period, although it is uncertain where this impact falls.

The blog postings suggested that the Royal Beach Club and other investments remain on the table, although Royal Caribbean has yet to determine a timeline for when they will start as it waits to put in place the necessary financing as it recovers from the COVID-19 pandemic’s fall-out.’

Royal Caribbean has amassed around 13.5 acres on Paradise Island’s western end by buying out private landowners in the area, or taking options on their properties, but its efforts to lease the extra seven Crown Land acres have brought it into conflict with Mr Smith.

He is seeking himself to lease two Crown Land parcels at Paradise Island’s western end, one of which involves two acres around the lighthouse and another three acres for the “beach break” element of his own project. Two of the acres sought by Mr Smith are included in Royal Caribbean’s Crown Land lease.

Mr Smith’s court action is alleging that he was granted a valid Crown Land lease over both parcels, including the lighthouse and the area at Colonial Beach for his “beach break” destination, which is now legally binding. The case is based on a January 7, 2020, letter from Richard Hardy, acting director of Lands and Surveys, that was headlined “approval for crown land lease” over the two tracts he wanted. This lease was agreed over a year before Royal Caribbean’s deal.