By NEIL HARTNELL
Tribune Business Editor
DOWNTOWN Nassau's revival is being "stunted" by regulatory confusion that is deterring potential developers and financiers, a senior realtor warned yesterday.
Charles Christie, C. A. Christie Real Estate's president, said zoning restrictions - especially on how high developers could build - were combining with already-high property values to make any redevelopment 'east of East Street' commercially "unfeasible".
Potential developers were thus being put-off by an unfavourable risk/reward analysis, Charles Christie warned, unable to determine whether their proposed projects would yield the desired returns. And the same uncertainty was also driving away financiers of such redevelopment.
Pointing out that 95 per cent of Bay Street buildings between East Street and the Sir Sidney Poitier Bridge were in a "shameful state", Charles Christie said the Bahamas' failure to maximise downtown's potential as an economic and tourist mecca was deepening.
"The fundamental problem is one of economics," he said in a statement. "The high land values, particularly on the waterfront side, coupled with the restrictive zoning make any land redevelopment proposals almost impossible to make feasible for financing.
"Considering the maximum square footage that can be accommodated under the present zoning, investment proposals are unlikely to meet the feasibility requirements for institutional financing. To turn around the situation and increase development immediately, new height restrictions (between 12 to 20 storeys) must be adopted to create more developable square footage."
Gavin Christie, C. A. Christie's managing partner, yesterday told Tribune Business that there was "a lot of confusion" surrounding existing height restrictions in the downtown area - to the point that no one is sure what the limits are.
He added that, "generally speaking", persons seeking to redevelop downtown Nassau properties were limited to three-four storeys high for properties zoned either residential or commercial, and said: "There's so much uncertainty."
Urging the Minnis administration to rapidly clarify the regulatory regime, Gavin Christie added: "As Charles said, with the uncertainty and limitations it's kind of stunting the growth of downtown.
"It's making it very tough, and almost unfeasible, for any developer to come in and take a look at it because of the cost of the land site. When a developer starts to run the numbers, it doesn't make sense because you are so limited.
"A developer, investor or broker has to be 100 per cent sure as to what they are getting into, and what are the restrictions and issues. If I own or purchase this land today, what can I do? What is feasible?" continued Gavin Christie.
"It's a bit challenging. If somebody wanted to build a 15-storey, mixed-use building, at this point it's not allowed. If you spend $8 million, $9 million, $10 million, $12 million for prime property in downtown, the question is: Can you reap your investment? That's the big question mark."
The Christies' calls are not the first time that zoning, especially height, restrictions in downtown Nassau have been raised as an issue. Larry Roberts, Bahamas Realty's long-time principal, warned that uncertainty surrounding the issue was impeding the area's redevelopment several years ago.
The concerns were also echoed by now-Cabinet minister, Brent Symonette, whose family has extensive real estate holdings in the downtown/Bay Street area. He also complained to this newspaper that the then-Christie administration had failed to establish 'the rules of the game' for the area's revival.
There is little developers/investors hate more than regulatory uncertainty, and this often puts a freeze on all capital outlays and new projects. It is currently preventing the Bahamas from fully exploiting the uniqueness of having waterfront property in what should be its commercial heart - the downtown area of its capital city.
"To me, that's where the value of Bay Street is: it's east of Bay Street," Gavin Christie told Tribune Business. "There's so much untapped potential, and it's crucial to the redevelopment of downtown.
"West Bay Street is pretty much developed, has activity, has foot traffic and retail sites opening and closing, and east Bay Street is a graveyard. Hopefully, someone can look at this [zoning restrictions] and review it.
"It's time to diversify our product to keep the Bahamas thriving. We need a thriving downtown. We have to bring more activity into downtown, and to do that we need to transform the east of Bay Street."
Gavin Christie added that it was tough to place a dollar value on east Bay Street real estate, due to the fact that minimal sales in the area in recent years meant comparisons were difficult.
This was not how it was supposed to be when the former Ingraham administration secured the movement of the shipping companies from Bay Street to Arawak Cay, the idea being it would make downtown Nassau less congested and free-up prime waterfront land for tourist and residential real estate development.
This has yet to happen more than five years later, with the restrictions cited by the Christies likely to have played a part. The area 'east of East Street' has continued to deteriorate, becoming effectively a 'Twilight Zone' where economic activity has - in many cases - ceased to exist.
Charles Christie pointed out that downtown Nassau's revival would bring benefits for all, not least property owners, who would see the value of their real estate holdings appreciate to the extent of "creating a number of new millionaires".
"The entire area will become extremely attractive for investment, as the resultant increase in developable square footage will vastly increase the feasibility of proposals and the potential for return on investment," Charles Christie said. "Further, the change will facilitate the rejuvenation of the area into a modern city of Nassau within a decade.
"The charm and historic importance of the area extending west of East Street, from Government House to the British Colonial Hilton, should be preserved as 'Old Town Nassau' with the current zoning restrictions maintained. However, east of East Street would become a new, modern city centre, a perfectly feasible endeavour given the absence of any historic buildings in this area.
"What is needed is a way forward in this modern age to enliven the city of Nassau, bolster new development, increase land values and inspire commercial, recreational and residential development in the desirable waterfront area," Charles Christie continued.
"It is time to reclaim the beauty and charm of the city centre, and rekindle the spirit of adventure, art, life and prosperity that has been allowed to decay for too long."
Contrasting this vision with east Bay Street's current state, Charles Christie said it was "a stark reminder of the consequences of neglect".
He added: "The area has steadily declined over the past 30 years to its current shameful state. Nintey-five per cent of the of the buildings are unkempt and shuttered, with degraded exteriors adorned with a kaleidoscope of peeling paint and rotting wood.
"A significant segment of our key commercial centre and main tourism focal point remains under-utliised. It is no surprise that we have failed to maximise
"e the potential of the millions of cruise passengers who visit our shores annually. Instead of restaurants, shopping, art galleries and other creative outlets for locals and visitors to congregate and find entertainment, the deplorable state of the area screams - decay. No wonder our cruise passengers are opting to remain onboard, and even when onshore significantly underspending in our destination compared to some of our neighbours in the region."