The Tribune

• Growing anxiety over February Point future
• Concerns Gov’t may seek retroactive taxes
• No developer sales since acquired in 2014

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A sale is being explored for a development described as “the crown jewel of Great Exuma” but which has “stagnated” over the past decade and failed to live up to its promise.

Multiple sources, none of whom wanted to speak publicly, have informed Tribune Business that February Point’s developer is in the initial stages of selecting a realtor to market the project and its remaining 89 acres amid concerns that the expiry of its Hotels Encouragement Act agreement could result in the Government demanding significant retroactive tax payments.

Hopes were high when Florida-based investor, John McGarvey, teamed with a group of existing homeowners to acquire February Point from the Hart family for $8.2m in 2014. The new owners, in their application for Bahamas Investment Authority approval, pledged to make a $40m capital investment and “immediately create approximately 130 permanent construction jobs for Bahamians”.

Condominiums, town homes and fractional development was also promised, along with a “hilltop boutique five-star branded hotel and beach club”, but this newspaper was told that none of this has materialised with the developer/ownership not selling a single new home or lot during their decade in charge.

Now, with the project’s last five-year Hotels Encouragement Act agreement having expired on March 31, 2024, there are fears that the Government may demand the retroactive payment of Customs/import tariffs and real property taxes by homeowners on the basis that the developer has failed to live up to its Heads of Agreement commitments.

“If the Government doesn’t renew that Hotels Encouragement Act, they’re going to retroactively say you didn’t live up to your agreement and demand the Customs duties owed by you as the developer and real property taxes,” one source, speaking on condition of anonymity, said. The now-expired Hotels Encouragement Act agreement provided for tax breaks and exemptions on $255.834m worth of imports.

February Point’s woes were detailed in a missive, which appears to have been a circular to the project’s homeowners dated January 6, 2023, that was leaked to the media. Following multiple checks, Tribune Business sources confirmed the contents were “pretty accurate if over-exaggerated”, with the Hotels Encouragement Act agreement, its expiry, and whether the project has met its commitments among the issues.

“It is unclear that February Point actually is in good standing with the Government and can allow others to benefit from the tax relief afforded by the Hotels Encouragement Act,” it said. “Homeowners are at risk if compliance was not in effect, and they filed and took relief for the years that coverage had possibly lapsed.

“We have been told by home owners that recently sold their home that they had to pay back taxes to clear their title for sale...... We have uncovered that the issue that persists is that February Point has not done enough development through the years since the original approval, and now has fallen into oversight by the Government.

“The [Department of] Inland Revenue has taken exception and will not recognise that February Point complies under the Hotels Encouragement Act. This causes all kinds of issues for new buyers and existing homeowners trying to sell and have been taking relief of taxes under the Hotels Encouragement Act.”

Mr McGarvey did not respond to Tribune Business requests seeking comment. When this newspaper called his Florida offices, and informed the lay who answered of its identity and the nature of its inquiries, she replied: “He’s not available but I’ll let him know you called.”

She immediately put the phone down without taking this newspaper’s number so that Mr McGarvey could return the call, and appeared to be protecting and shielding him. An e-mail sent to Mr McGarvey’s personal work address, which did not rebound, was not replied to. Representatives for the minority homeowner investor group also failed to respond to this newspaper’s inquiries.

However, one source close to February Point homeowners, speaking on condition of anonymity, said of the leaked circular: “February Point is not falling apart, it’s not going to hell, but for the vast majority of individuals it’s not doing what it should be doing.

“It’s the finest you’ll find in George Town. You walk in here and look at Elizabeth Harbour and look at the location of February Point and there’s no reason in the world why this can’t be a thriving community but it’s stagnant.”

They confirmed that the circular’s assertion that no new home has been built in February Point for the past ten years since the present developer group took over is “fairly accurate”. The source added: “The reason for that is February Point does not enjoy the best reputation for being a harmonious residential community. There was no transparency for a very long time.

“People are not happy, and that’s why there are no sales. They’ve not sold one lot; absolutely nothing since they took over from the Harts. It doesn’t inspire confidence in the future.” This was echoed by another contact familiar with February Point, who asserted that all property sales occurring within the development since 2014 have involved pre-existing homes.

“No sales from the developer to a single person,” they added. “No new home has been built and not a single lot has been sold from the inventory of the developer. It has to change ownership, and even that is difficult because they cannot agree on a price in the first place.”

While Mr McGarvey has received the lion’s share of blame for February Point’s ills, Tribune Business sources suggested that he is conveniently - and unfairly - being made a scapegoat because the homeowner investor group that partnered with him to acquire the development are frequently at odds with him.

February Point’s immediate Bahamas-based holding company, FP Associated, is owned 100 percent by a Delaware incorporated entity, FP Management Company. The latter is majority-owned by Mr McGarvey, who holds around 55 percent of the equity, while the homeowner group controls the remaining 45 percent.

This newspaper understands that February Point is effectively paralysed because the two sides “cannot agree on anything” and therefore the project has no direction, strategy or vision guiding its build-out. While many homeowners blame Mr McGarvey because he has majority ownership, others are arguing that the minority group has also not lived up to its side of the bargain.

“February Point is still the crown jewel of Great Exuma,” one source said. “It is the gem of Great Exuma. If that doesn’t move soon people will get worried. It sends the wrong message to external investors.” The development is also unlikely to escape scrutiny given that Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, also happens to be the local MP.

The leaked February Point circular also alleged that the project’s marina is continuing to deteriorate, with parts of the dock allegedly “unsafe” and presenting an “eye sore” that deters potential fresh investment and real estate buyers.

One source, confirming these assertions were “reasonably accurate”, said damage from a prior hurricane - thought to be Matthew - had yet to be rectified. “I’m tied up at a dock slip that survived,” they added. “One dock is completely destroyed, and there’s a couple of slips on the dock I’m tied up at that are unsafe and unusable. To a certain extent that’s accurate...

“The common areas need work. The roads are fine, security still works. The tennis courts need work. Anything that’s related to the common use for the benefit of owners has not been maintained the way they should be. The club, which is privately owned by McGarvey, and the pool area are in pretty good shape.

“If you weren’t familiar with this development and came here, of the big-ticket items the marina is in bad shape, the security as you enter looks OK, but there’s no life. There’s no feeling of improvement. There’s a feeling that there’s no future with this development,” they added.

“The homes, though, are first class. It is special. It occupies a very special point on Elizabeth Harbour, and the architectural features of the homes are very substantial, very impressive. All of the privately-owned homes are in exceptional, first-class shape.”