The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Concerned Grand Bahama Port Authority (GBPA) licensees have hired a well-known QC to research potential legal remedies over the controversial Freeport Light Industrial Park (FLIP).

Wayne Munroe QC confirmed yesterday to Tribune Business that he had been engaged to study the “fairness” of the joint venture arrangement between the GBPA and FLIP’s developer, Gold Rock Corporation.

He disclosed that his research will seek to determine whether Gold Rock Corporation and its owner, the Florida-based Del Zotto family, have the necessary permits and approvals to carry out the project.

And Mr Munroe also revealed that he will seek to meet with Khaalis Rolle, minister of state for investments, over his clients’ FLIP concerns when he returns to the Bahamas.

“I’ve been approached by some of the licensees of the Port, because the Port have advanced the FLIP,” the QC told Tribune Business.

“While the concept may not be objectionable, in terms of the industrial park, it is how it is being advanced. I’m not sure, for want of a better word, about the legitimacy of that.”

The Freeport-based retailer/wholesaler, Dolly Madison, is understood to be among the GBPA licensees who have hired Mr Munroe.

Tribune Business previously revealed how GBPA licensees fear FLIP will create “an uneven playing field” for Bahamian-owned businesses, and give Gold Rock an unfair competitive advantage over rival Freeport retailers.

A list of concerns drawn up by the Grand Bahama Chamber of Commerce, which was seen by this newspaper, said FLIP threatened to “create an extraordinary (and inequitable) competitive situation”, given the bonuses and incentives offered to Gold Rock for on-time completion of the industrial park.

And, while the GBPA will be the landowner and the regulator, Gold Rock is FLIP’s developer and contractor.

“Part of the research is to see what approvals they have to do what the Port represents they will do,” Mr Munroe said of Gold Rock, adding that one of the concerns was whether Bahamian contractors would be excluded from work at FLIP.

“Even if they do have these approvals, it seems unfair in an economically depressed place like Freeport to give that business to a foreign concern, when you have licensees of the Port with the requisite skills.”

Mr Munroe said his clients were also concerned that FLIP and its tenants, and Gold Rock, would receive preferential incentives and treatment compared to their own businesses.

“The ‘one-stop shop’ concept gives the impression that people setting up residence there [FLIP] will be treated preferentially compared to someone coming to another licensee’s premises,” he added.

“The other troubling part is talk of lower utility rates [for FLIP tenants] . Ultimately, those paying full rates will be subsidising those people. That could create circumstances where I’m subsidising my competitor’s utility bills, and that can’t be fair.”

Mr Munroe continued: “It’s a matter of researching that and whether that can be legitimately done....

“The people that came to me said the concept being proposed, in its manner of execution, did not appear to be fair. When Bahamians feel something is unfair, they seek out counsel. They want me to look at it, and see if the manner of execution can be done fairly. Is there anything that can be done legitimately to stop it, period, or stop it being done in a manner that is unfair.”

Mr Munroe said his research into the issue was unlikely to take long, and added: “The Bahamas government needs to be concerned if approvals have been given.”

The GBPA’s Bahamian-owned licensees are especially worried that the incentives and benefits flowing from the FLIP deal will aid Gold Rock and its owners, the Florida-based Del Zotto family, in their ambitions to dominate Freeport’s hardware retailing market.

This newspaper revealed last month how Gold Rock is constructing a 130,000 square foot store under construction at the 300-acre FLIP park, which it will develop as part of its joint venture with the GBPA.

Apart from the potential “inequity” created by the FLIP deal, Tribune Business was told that Freeport-based rivals are questioning whether the new Gold Rock mega store is “feasible”, given that its primary market is just 50,000-60,000 strong.

With numerous Bahamian-owned retailers already in this space, the fear is that the market is not big enough for all, and the Del Zottos - with businesses in four US states - will exploit their financial muscle and the natural competitive advantages enjoyed by foreigners to squeeze existing Bahamian businesses out of the hardware/retail sector.

Henry St George, the GBPA’s vice-president, unveiled FLIP at the Grand Bahama Business Outlook earlier this year.

FLIP’s 300-acre site, which runs directly west along the highway from Grand Bahama International Airport’s domestic terminal, was selected because Gold Rock’s existing businesses can serve as ‘anchor’ tenants.

Mr St George explained that the FLIP project was designed to smooth the entry of international businesses to Freeport, adding that there had already been interest from potential tenants.

FLIP tenants will be provided with sites ranging from three to 11 acres, with a “customisable turnkey business headquarters” then built for them by Gold Rock.

Mr St George said there would be a $7.5 million investment in FLIP’s infrastructure, with phase one vertical investments totalling $18 million.

“The site has been divided into four phases, and the transaction has been structured so that the development of 75 per cent of Phase 1 has huge economic benefits to the developer if it is completed within the targeted three-year window,” he added, in reference to Gold Rock.