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Regulatory Uncertainty 'Stunts' Bay Street Revival

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

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."

Comments

Dawes 7 months, 3 weeks ago

If the fundamental problem is one of economics and in particular the high land values, then a very simple fix is for the land to be valued at a value it can sell for, which is considerably lower then what it is now. What the Christies really mean is the owners will only accept a certain amount for their land, and do not care if it sits there unused until they get that, as they can afford it.

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Well_mudda_take_sic 7 months, 3 weeks ago

The arsehole Charlie Christie is a fine one to talk about certain properties being in a "shameful state" when he owns an apartment property on the harbourside of Paradise Island, known as 'Flamingo House', that a senior vice president of Atlantis recently described at a posh cocktail party as a deplorable dump that should be razed to the ground.

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MonkeeDoo 7 months, 3 weeks ago

WOW Mudda ..... Foolin da public like ee couzan !

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Reality_Check 7 months, 3 weeks ago

Yep, you could say Charlie Christie and that scoundrel George Smith (former MP for Exuma under the Pindling administration) are cut from the same cloth - basically two peas in a pod.

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OldFort2012 7 months, 3 weeks ago

Dawes is absolutely right. If there was a truly free market, the properties east of Bay Street would have almost no value. In fact, most of Downtown would have almost no value. That is because all financial services are shifting west and all that will be downtown will be the Courts and the shops servicing the cruise ships. All in all, enough demand for Bay Street shops and 3-4 office buildings containing law firms. The rest will be slowly abandoned. The only way to prevent this is through tax policy. Squeeze the owners so much with yearly property taxes that they either go bankrupt or are forced to sell, at true market price. Only then can the rejuvenation of Nassau take place. But that is still decades away, in the best case.

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bogart 7 months, 3 weeks ago

The owners of the fallen down, decriped, eyesore properties east of East st are likely waiting on the govt to use borrowed funds to be repaid by the rest of the nation to build a boardwalk along the warerfront stretching from Ptrince George to the old Pan Am landing. Currently they should be fprced to renovate or govt reclaim by eminent domson because it is an abominnation for tourists to pass through this corrodor too get to PI or do business woth owners of busonesses further east who maintain their proprrties law firms ,banking..showpieces of our Bahamian services. Govt spends millions to market internationally and these run down properties should not be allowed to prevent the country to get full value of the beautiful scenes the ads portray To get to Atlantis the touirist or internayional or local business people should not have yo pass through a mile of eyesore properties.

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proudloudandfnm 7 months, 2 weeks ago

Nothing but excuses. Those Bay St owners have made millions over the years and refuse to even maintain their properties but it's all government's fault?!?

Idiotic don't begin...

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bogart 7 months, 2 weeks ago

Please dont yuck up your vexation proudloudandfnm....BaySt owners ...some 19 came up with 1 million each to get the 25 ?yearlease on Arawak Cay for the Port plus guarranteed interest, preference shsres and exclusive port to move off Bay St so their trucking and containers dont plug up Bay St. Any of us would jump on such a deal.....cant blame them. Somewhere in there Lawyers are involved in drawing up these cpntracts......cant blame Mr. Penn either if he could get the govt to pay him 46,000 a ,month rent..?

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birdiestrachan 7 months, 2 weeks ago

This is what the visionary Mr. Perry Christie tried to do with the straw market.

go up, the restaurant and look out tower was a great idea. The government would have had returns. To make the most of such valuable property is to go up a few stories.

The vision less came into power and changed the plans. And they all said good. Mr: Christie's idea was a good idea GO UP on the straw market how quickly they all choose to forget.

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bogart 7 months, 2 weeks ago

Yes loved the plan for the second floor to the Straw Market. But the PMs former law partner and then new PM decided to save costs and some protests from another MP with vision and that was that. Cannot see how all those cars in the hirise parking lot will all get out on the tiny Bay St. At 5 pm. Didnt like no preservation made on what was the first Fort Nassau ,the beginning of Nassau

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