The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

Royal Caribbean’s top Bahamian executive yesterday pledged the cruise giant will work with a local entrepreneur if the Privy Council upholds his Crown Land lease for an adjacent Paradise Island site.

Philip Simon, president of Royal Caribbean’s Royal Beach Club project, said it was willing to collaborate with Toby Smith to ensure the overall success of Paradise Island if the latter succeeds with his final legal appeal.

Speaking to reporters, Mr Simon said the cruise line is prepared to work with all of its neighbours, Mr Smith, who is heading to the London-based Privy Council in his battle with the Government over the Crown Land lease for a site adjacent to the Royal Beach Club.

“We have to work with our neighbours. So, if he’s successful, then obviously that’s part of the overall plan for the western tip of Paradise Island. We definitely have to work with our neighbours whether to the east side or to the west,” said Mr Simon.

He added that there is “absolutely no overlapping of interest” with Mr Smith’s project as Royal Caribbean requested that the three Crown Land acres that form part of Mr Smith’s dispute be severed from their lease agreement in 2022.

Mr Simon said 13 of the 17 acres being used for the Royal Beach Club were privately acquired and the remaining four obtained from the Government. “This is a 17-acre development project,” he added. “Thirteen of those acres were privately acquired property, and four of those through [an agreement] with the Government.

“Just to make it abundantly clear there was a previous seven-acre plot that would have been amended down in 2022 to remove three acres that were in [Mr Smith’s dispute with the Government]. This would have been even prior to any particular court action. The company decided to amend its lease and convert it to a four-acre lease, and so there is absolutely no overlapping of interest or Crown Land lease agreement.”

The last proposed Royal Beach Club initial public offering (IPO) structure is for the cruise line to have a majority 51 percent ownership interest, with the remaining 49 percent equity stake to be split between the Government and Bahamian retail and institutional investors. The size of the Government’s interest was to be based on the value of the four Crown Land acres it was contributing to the project’s total 17 acres.

Once the value of this land was appraised, the size and value of the collective equity raise from Bahamian investors was to be determined. It was thought the IPO would take a similar form to the Nassau Cruise Port offering, where investors acquired shares in an investment/mutual fund that will own the collective local interest in the Royal Beach Club.

Mr Simon said Royal Caribbean is still aiming to open the Royal Beach Club to paying passengers by December 2025. He added that construction work should be completed by November, with nearly 300 construction workers on-site daily. Foundations have been laid for the majority of the structures.

“We’re going to be opening in December of this year. We are just about finished with most of the foundational work. I think 13 or 15 structures’ foundations have been laid. They’re starting to come up out of the ground. The pools have been just about completed in terms of pouring,” said Mr Simon.

He said the IPO will likely be delayed due to the need to complete all the necessary regulatory processes. “There’s a process that we’re going through with the Government. There was a supplemental Heads of Agreement that spoke specifically to the financial terms and the partnership with the Government that we would have completed earlier this year,” said Mr Simon.

“Now we’re in the shareholders’ agreement process. That’s a negotiation as well, to get all the terms right as we dot the ‘i’s’ and cross the ‘t’s’ in that regard. And then you have to go, obviously, through the Bahamian Securities Exchange and all of the regulators, Attorney General’s Office.

“So that’s a process that we’re moving as quickly as we can on that. But yes, that is probably slipped into the third quarter, end of the second quarter, in terms of making that available to the market.”

Mr Simon said Royal Caribbean has extended the deadline to submit requests for proposals (RFPs) for Bahamian companies, and have been “very excited” about the submissions thus far.

“We wanted to ensure that everybody had an opportunity, those that would have been interested. We wanted to make sure that the word got out for the entrepreneurs, for the artisans. There’s a tremendous list there,” said Mr Simon.

“We’re talking about pest control, laundry, food, beverage elements, talking about beach activities, the list goes on and on, and you can see them all on the site. The intent was to extend the deadline, take in as many applications and proposals as possible. And we’ve been very excited about what we’ve seen coming thus far.”

Mr Simon said an announcement on which firms were contracted to provide water taxi and other services will be made in the coming weeks, and a number of Bahamian companies are already actively working on the project.

“We haven’t announced yet, and they will come over the upcoming weeks, but we’ve identified partners in several of those areas. Whether it’s food, beverage, whether it’s the operations of the water taxi, etc,” said Mr Simon.

“The companies that are currently under contract for construction. ISD (Island Site Development), Bahamas Environmental Group (BEG), there’s some other subs there. We have the security company here, WEMCO, from almost the very beginning, the environmental firm JSS, who was managing and caring for the trees and plants, etc, that would have come off of the property. And then there’s also SCB, and of course, we’ve been working with Bahamian architects, etc, in the overall design.”