The Tribune

By AVA TURNQUEST

Tribune Chief Reporter

aturnquest@tribunemedia.net

THE government has given itself a little over a month to close bids for the sale of the Grand Lucayan, according to Hotel Corporation chairman Michael Scott.

Mr Scott was appointed chair of the special purpose vehicle (SPV) board, Lucayan Renewal Holdings Limited, tasked with finding a buyer for the property.

He told The Tribune the government was prepared to take a hit on the sale in principle, but insisted accepting an offer less than the $65 million price tag the government will pay to owner Hutchison Whampoa will depend on a wide-range of factors.

“Everything depends on what the package is like,” he said. “We’re prepared to be flexible, it depends on what offers come in, depends on a whole range of factors.

“Whatever package comes in that we consider suitable with the right vision. In principle, we’re prepared to take a haircut but it depends on the circumstances of any given case and the parameters of the deal.”

“The underlying premise is government is not going to be in the hotel business, that is the philosophical bottom line for us.”

The government has made a down payment of $10 million for the purchase of the property and Prime Minister Dr Hubert Minnis announced last week the sale will be finalised within 30 days.

Mr Scott said a formal invitation for bids could be released as early as September 10 but details were still being “fleshed out” and date has not been finalised.

He said the current timeline provides for the government to invite subscriptions for a 30-day period and close bids by October 15.

Mr Scott acknowledged the tight timeline may need to be adjusted but maintained the government “had to start somewhere.”

“I’m having the first board meeting tomorrow,” Mr Scott said.

“If we find that we have to relax that, we will. I’m trying to get a handle on the state of the hotel. I only did my first tour on Wednesday so trying to get handle on operations, trying to get a damage assessment report. I’m meeting with the general manager, head engineer, rooms…we’re just sort of catapulting ourself into action from about 8.30am (Monday).”

According to Mr Scott, board members represented a team of professional industry experts: attorneys Terence Gape and Carey Leonard; forensic accountant Ed Rahming; Atlantis executive Russell Miller; Linda Turnquest, from the Grand Bahama Shipyard Limited; and Willie Moss, from the Grand Bahama Port Authority.

“We want to move with all deliberate speed to try and get activity going,” Mr Scott said, “we’re not going to sell or promote the sale to speculators. We want people in there with a vision, we’re looking to sell a project to think out of a box, to think laterally, because we have to engage Port Lucaya and the marketplace aspect of this. We have to look at the whole Freeport micro-economy holistically.”

According to Mr Scott, the board will focus on maintaining operations at the 196-room Lighthouse Pointe with a view to repair and re-open other parts of the resort after further assessment.

The government has faced considerable scrutiny over its decision to purchase the hotel, with critics taking issue with a lack of economic impact assessments or long-term strategy.

Opposition Leader Philip Davis stressed the purchase was a “waste of money” on Thursday, and questioned how the government could move to acquire the property, which has two of its three hotels shuttered, when it could not provide any details on the economic impact the purchase will have on Grand Bahama.

Mr Davis claimed there would be no immediate benefit or economic impact for at least two years.

Yesterday Mr Scott stressed inaction was not an option for this administration, adding the challenge required a fresh look as past approaches have not worked.

He believes the government should take a more robust attitude with Hutchinson Whampoa, who he claims did not invest any money into the property after it settled its insurance claim from Hurricane Matthew.

“At least we’re prepared to take a robust approach,” Mr Scott said. “It may be that we have to apply some leverage towards Hutchinson because when they entered in the 1997 heads of agreement, they made an undertaking to keep the hotel property to the standard of a premier resort.

“They have not done a very good job of it, when they settled the insurance claim on Matthew they basically absconded with all the insurance.”

He continued: “The Christie government gave them a free ride so I’m not interested in what the opposition has to say. Why did they rubber stamp the request to renew for another 20 years the concession on freedom from taxation on 80,000 acres in Grand Bahama Development Co? On top of that, favourable rates on the container port.

“We gave away all the leverage and we’re being treated by them as a kind of vassal state. I think we have to take a far more robust attitude towards Hutchinson. (The Progressive Liberal Party) has the luxury of criticising, but when they were in the driver’s seat they allowed Hutchinson Whampoa to get away with murder.

“The utmost economic centre of Freeport would have collapsed,” he added, “nothing was not an option.”