By NEIL HARTNELL
Tribune Business Editor
A CABINET minister says no decision has been made on calls to revise downtown Nassau's height/zoning restrictions, amid fears they are deterring investment to spark the city's revival.
Dionisio D'Aguilar, minister of tourism, told Tribune Business in a recent interview that the desired "skyline" has to be factored into plans for Bay Street's revitalisation, with a raising of height limits among the "topics for discussion".
"We're very much in the formative stages of how to incentivise development down there, and one of the topics yet to be decided by the Government is the height of the buildings," he told Tribune Business. "The higher you go the cheaper it is to construct, because you build units on a smaller footprint. It's primarily because the cost of the land per square foot gets smaller the higher you go. "Cities like Tokyo have allowed the limits to go extremely high because they felt it reduced the cost per square foot to construct those units. You've got to factor in how you want to change the skyline of your city. All these things factor into your decision."
Acknowledging that Atlantis was "across the waterway" at "20-plus storeys", Mr D'Aguilar reiterated of downtown Nassau's height restrictions: "We haven't come to a decision on that. It's a topic of discussion.
"Something must be done," he added of Bay Street's downtrodden stage, "and the Government is active and increasingly looking at how we spark this redevelopment; how we make it happen."
Concerns over the city's height/zoning restrictions were again raised just before Christmas 2017, with a prominent realtor warning then that downtown Nassau's revival was being "stunted" by regulatory confusion that continued to deter potential developers and financiers.
Charles Christie, C. A. Christie Real Estate's president, said zoning restrictions - especially the limits 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, he 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.
Mr Christie's concerns were echoed by Charles Klonaris, the Downtown Nassau Partnership's (DNP) co-chairman, who told Tribune Business in a recent interview that the height restrictions were "one of the most serious" impediments to fresh investment and development in the Bay Street area.
"The zoning has to change; no question about that," Mr Klonaris said, adding that this was "part of the thinking of the DNP" - the public-private partnership (PPP) entity created to oversee downtown Nassau's revitalisation.
"No one is going to make an investment if they can only go up five storeys," he added. "We have to create demand. If the demand among financiers is not there, the revenues are not there, no one is going to invest.
"That's been one of the most serious problems in attracting development and investments downtown; the height restrictions. We have this valuable frontage on the harbourside, and it's easy to understand why development has not taken place. It's too costly, if you only go up four to five storeys, to justify the investment.
"If you put the cost of the land with the cost of construction, you have to go up a certain amount or create a certain amount of units to get a return on your investment."
Downtown Nassau's revitalisation as a centre of economic, social and cultural activity has long been identified as a priority by successive governments, but little tangible progress has been achieved to-date apart from the shipping industry's relocation to Arawak Cay; the Pompey Square upgrades; and turning some streets into pedestrian-only thoroughfares.
Graycliff and John Watling's Distillery have led the way in terms of private sector investments, but the area 'east of East Street' - in particular - remains in a state of continuous decay and decline.
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 last year 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, last year told Tribune Business there was "a lot of confusion" surrounding existing height restrictions in the downtown area - to the point that no one was 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."
"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," Gavin Christie explained.
"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?"
Zoning, and especially height, restrictions in downtown Nassau have been an ongoing concern for many years. Larry Roberts, Bahamas Realty's long-time principal, warned that uncertainty surrounding the issue was impeding the area's redevelopment several years ago.
Those 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.