By NEIL HARTNELL
Tribune Business Editor
The Christie government was yesterday urged to “seize the initiative” and complete a deal to sell its last wholly-owned hotel to Scheck Industries, the Hotel Corporation’s former chairman describing the property’s $500,000 annual losses as “a financial millstone around our national neck”.
Telling Tribune Business that the Ingraham administration had left the potential Lighthouse Club deal with the Bahamas Investment Authority (BIA) for completion, Michael Scott said securing the right agreement with Scheck would “have a tremendous impact” on the north Andros economy.
Calling on the new government, and Hotel Corporation Board, to pick up where he had left off, Mr Scott also urged them to focus on “winding-up” the latter organisation and transforming it into a Tourism Development Corporation.
Scheck’s proposed acquisition and redevelopment of the Lighthouse Club property, the last hotel owned by the Hotel Corporation, has been on the table for several years.
Mr Scott, though, conceded that the deal was “left very much up in the air”, with the Ingraham administration dissatisfied with Scheck’s last proposal, meaning further negotiations were required.
“They had made a proposal which the former government felt involved too much land again, and it was left to the Bahamas Investment Authority (BIA) to complete the terms and negotiations with the Scheck Group,” Mr Scott told Tribune Business. “I don’t know where that’s gotten.
“I certainly hope they [the Christie government] seize the initiative with Scheck and negotiate an arrangement acceptable to both parties, getting rid of this financial drain.”
Mr Scott, a well-known attorney and commercial litigator, said the Lighthouse Club was costing the Government - through the Hotel Corporation - around $500,000 a year to maintain and keep operational.
While those losses are a relatively insignificant sum matched against a projected $550 million fiscal deficit, every saving the Government can find will help.
“I think it’s extremely vital,” Mr Scott said of the need to dispose of the Andros resort, “because the Lighthouse Club is costing the Government, in terms of funding it, about $500,000 a year.
“Getting that millstone removed from our national necks would, in my opinion, be pretty vital..... I hope they will do something with the Lighthouse Club. It’s a huge financial drain on the Government. The annual expenditure on the Lighthouse Club is a loss leader, ranging somewhere between $450,000 to $500,000.”
Under the proposed agreement with the Ingraham administration, land and investment incentives would be released to Scheck in accordance with “timeframes and milestones for development”.
“Their project was phased,” Mr Scott added. “They would have started with a complete overhaul of the existing Lighthouse Club and marina, expanding the marina to 50 slips and adding 10 additional rooms to the Lighthouse Club.”
The existing resort, located in Fresh Creek, has less than 30 rooms. Assessing the effect Scheck’s project would have on the North Andros economy, Mr Scott told Tribune Business: “It would have a tremendous impact.
“It would be a catalyst for other smaller developments, hopefully launched by Androsians, taking place around it, and there would be activities like recreational sports and cottage industries feeding off of the inflow of tourists that come to a development like that.”
The ex-Hotel Corporation chairman added that Scheck had been proposing a $15 million investment in the first phase, and the construction and full-time jobs generated would have been “50-plus”.
He also called on the Government to complete the Hotel Corporation’s winding-up and get the Government “out of the hotel business”, an initiative first embarked on in 1992 when the FNM took office for the inaugural time.
Mr Scott said the attention needed to be “on finding projects for the rest of the land owned by the Hotel Corporation, and focusing on a very narrowed, principled basis, on getting and promoting foreign resort development in the Bahamas. That’s what I would like to see”.
This required the Hotel Corporation’s transformation into a Tourism Development Corporation, a process he had been seeking to start.
Apart from the Lighthouse Club, the Hotel Corporation’s remaining assets include about 3,200 acres of undeveloped land in Eleuthera, in the area of Winding Bay and Half Sound.
“We had a group that originally looked at it, an Italian group, but they never graduated beyond making an initial proposal,” Mr Scott told Tribune Business.