0

No 'Show Stoppers' On Grand Lucayan Deal

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Government will respond to the Wynn Group's Grand Lucayan Heads of Agreement (HOA) proposal by week's end, a source saying: "There aren't any show stoppers yet."

Tribune Business sources familiar with the deal's progress, speaking on condition of anonymity, said the Cabinet committee dealing with the Grand Lucayan deal had spent Monday examining Wynn's proposed terms 'line by line'

"There are lots of details to be worked out in the Heads of Agreement, and the Government spent a lot of time on Monday going through it piece by piece," one well-placed contact told this newspaper.

"It expects to have something back to them [Wynn] for their consideration by the end of this week."

They added that there were "no issues" left outstanding between the Toronto-based real estate developer and the Grand Lucayan's current owner, Cheung Kong Property Holdings, the two having agreed a $65 million all-cash deal for the sale of Grand Bahama's 'anchor resort' property.

Another source said "it goes without saying" that the Heads of Agreement would commit Wynn to bringing in world-class hotel brands and operators, with the ability to market the Grand Lucayan's three properties to travellers and attract the necessary airlift, in return for receiving the Government's approval.

"We've been to that movie before where people don't understand island destinations," they explained. "They don't realise that having access and the facilitation of airlift makes all the difference in the world.

"If you can't get people there, it doesn't work. It was like the Four Seasons Emerald Bay in Exuma. You can have the most beautiful property in the world, and it won't happen. It's very important who the operators are, and having access to airlift."

Tribune Business was also told that the Grand Bahama Port Authority (GBPA) had informed the Government that all necessary approvals that it is required to provide for the Wynn deal will be forthcoming.

"The Port Authority have already signalled they will not be an impediment in any way, shape or form on the issues that have to go by them," another source, speaking on condition of anonymity, said.

"There aren't really any show stoppers so far, but we won't know until we see the first responses back and forth by the parties. What's very surprising for people is governments are very different from companies in what matters to them, and what's important to them.

"That comes out in these sorts of negotiations. Someone used to negotiating company to company can sometimes be surprised as to what matters a great deal to governments."

The Heads of Agreement is effectively the 'master document' setting out the terms of an investment agreement between foreign developers and the Government. They detail the tax concessions an investor/developer will receive, and outline their development commitments, while also setting out the number of Bahamian jobs created and other local impacts in addition to the Government's marketing contributions.

The Grand Lucayan's 14-month closure in the aftermath of Hurricane Matthew, and loss of 1,100 rooms representing 59 per cent of the island's room inventory, has sent Grand Bahama's economy into a tailspin ever since.

Mick Holding, the Grand Bahama Chamber of Commerce's president, in a recent Tribune Business interview urged businesses in the Port Lucaya Marketplace and others dependent on the tourism industry to "hang on" just a little longer in the hope that the Wynn purchase will conclude.

"One or two businesses have already closed in Port Lucaya Marketplace, and others are operating below capacity, but I think that those hanging on in there now have a little bit of hope just to go on another three to four months and things will pick up," Mr Holding continued.

"Had nothing been happening, we may well have seen more businesses closing. It gives them some optimism, some hope that things will pick up very quickly.

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment