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Gov't Hotel Exit Depends If Buyer 'Still Interested'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Completion of the Government's 26-year bid to exit hotel industry ownership now depends on whether the Bahamian purchaser of its last property "is still interested".

Dionisio D'Aguilar, pictured, minister of tourism, told Tribune Business he planned to check with the Lighthouse Yacht Club and Marina's potential buyer to see if they still wanted to pursue the deal given the length of time that has "elapsed" since the initial offer was submitted.

"Someone has offered to buy the property," he confirmed of the last Hotel Corporation-owned resort. "Their bid was submitted to the Cabinet and approved, but I need to confirm they are still interested.

"There has been an offer made and an offer accepted, but I need to make sure the buyer is still interested given the time that has elapsed between when the bid was made and when the bid was accepted. Let me see if he's decided to buy it."

Both Mr D'Aguilar and Frederick McAlpine, the Hotel Corporation's chairman, confirmed that the prospective purchaser of the still-closed Andros resort is a Bahamian. They declined to name them, but the latter described the buyer as "familiar with the hotel business", having worked on other boutique Family Island properties.

Besides the wait for Cabinet confirmation on the Lighthouse Club deal, Mr McAlpine said the Hotel Corporation Board was also awaiting sign-off on plans to transition into a Tourism Development Corporation - a change that has been "in the works" for almost two decades.

Mr McAlpine, the Pineridge MP who has gained a reputation for speaking out against his own government and party, said the failure to complete this transformation has placed The Bahamas "behind" regional competitors, leaving the Government less able to participate in and guide the direction of tourism industry development.

"It's in the works to be sold," Mr McAlpine said of the Lighthouse Club. "It's still awaiting confirmation from the Cabinet. We recommended that it be sold and we're moving towards that, hopefully soon. We forwarded our recommendation and are just waiting to hear from the Cabinet of the Bahamas in that regard."

Confirming that the chosen purchaser planned to "refurbish and rebuild" the Fresh Creek property, which has been closed ever since Hurricane Matthew's devastation of October 2016, Mr McAlpine said of the buyer: "It is a Bahamian who is familiar with the hotel business.

"They are very familiar with the hotel business because they have also done work with other hotels on the Family Islands. We wanted to choose someone who at least is familiar with being able to deal with it as a project."

Mr McAlpine told Tribune Business that the Hotel Corporation had managed to save taxpayers some $250,000 by terminating the Lighthouse Club's 20-plus staff and paying them due severance, after the Christie administration kept them on despite the hotel being closed.

"We were paying people for a year who weren't working because of the closure of the hotel, and we were able to terminate them without any problems," he said. "We gave severance to probably 20-plus staff, and were saving the Corporation thousands of dollars because we no longer had to pay them. We were paying over $250,000 to keep them on staff."

Numerous attempts to sell the 20-room Lighthouse Club, whose amenities include a 30-slip marina, pool and tennis court on 11 acres of beachfront land, have been made before with little success.

The last Ingraham administration was trying to negotiate a sale to Illinois-based Scheck Industries when it left office in May 2012, in a bid to end financial bleeding that was costing the Hotel Corporation some $500,000 per year.

Under the proposed agreement with the then-Ingraham administration, land and investment incentives would have been released to Scheck in accordance with "timeframes and milestones for development".

The company had proposed a $15 million investment in the first phase, and construction and full-time jobs of 50-plus, but nothing further was heard of Scheck once the Christie administration took office.

Tribune Business then revealed in 2014 that rival Bahamian-led bids with strong Andros connections were battling to acquire the Lighthouse Club. Prescott Smith, owner of Stafford Creek Lodge, confirmed he was heading one group, while Vanlock Fowler, owner of Nassau-based All Purpose Steel Company, confirmed he was part of another.

Again, though, no deal was closed. The property remains shuttered, with the Matthew-related damage not repaired, resulting in the Minnis administration offering the assets on an 'as is' basis when it began marketing the Lighthouse Club for sale last September.

The land upon which the Lighthouse Club sits is more valuable than the buildings and, together with the sale, Mr McAlpine said the Hotel Corporation's Board had also submitted plans and timelines for transforming itself into a Tourism Development Corporation.

"We're looking forward to moving from a Hotel Corporation to a Tourism Development Corporation," he told Tribune Business. "That should also be a primary goal to realise.

"That has been put to Cabinet, and we're awaiting their approval. The Hotel Corporation has done its due diligence and everything we have done has been forwarded to Cabinet. That was my hope; to transform or go through the metamorphosis from a Hotel Corporation to a Tourism Development Corporation, which has been in the works for 20 years."

Mr McAlpine said he was unsure whether the Hotel Corporation and Tourism Development Corporation would exist as separate, standalone entities, or if one will be the subsidiary of the other, as the corporate structure has yet to be determined.

"I'm hoping we can transition to the point where everything comes under the Tourism Development Corporation rather than the Hotel Corporation but, for legal purposes, we may have to have the two," he revealed.

"With the Tourism Development Corporation we can do more to develop tourism. We have to encourage tourism development and be part of it, whether it's eco-tourism or boutique hotels. We can have a say in the development of the industry and the things being done."

A Tourism Development Corporation has been planned since the 2002-2007 Christie government, but has yet to come into fruition under three successive administrations. Its role would likely involve attracting investors, and even partnering with them in joint ventures, given the significant landholdings it will inherit from the Hotel Corporation.

The latter's remaining assets include about 3,200 acres of undeveloped land in Eleuthera, in the area of Winding Bay and Half Sound, plus property on Andros. "We still own a lot of property in Eleuthera and Andros," Mr McAlpine confirmed. "We'll be selling the land, and using the land for development of other things."

He added that Prime Minister Dr Hubert Minnis had identified the Tourism Development Corporation's creation as an early goal, and said: "This has been in the making for a very long time. A lot of work has been done on its development.

"It's the future. We're behind in this regard. Many of the countries in the region have developed Tourism Development Corporations to develop their industries. It's something that's needed, and needed to move us forward.

A successful sale of the Lighthouse Club would seemingly mark the end of a 26-year process, begun under the first Ingraham administration in 1992, with the sales to Sandals and SuperClubs Breezes, to extricate the Government from the business of hotel ownership. It will also mark the end of an inglorious chapter under the Pindling administration when millions of taxpayer dollars were wasted in trying to prop up failing, loss-making hotels.

Comments

TalRussell 4 months, 4 weeks ago

This comrade is clueless to what if any functions does Hotel Corporation Of The Bahamaland perform other than acting as watchman the one and only remaining asset which is a closed, run down hotel property on island..... likes why a chairman and how many are on public purse's payroll do do nothing.... is there fleet government vehicles and drivers assigned corporation's personnel... likes if hotel is sold will chairman and his staff be sent home and fleet vehicles reassigned another group of undeserving government people? { There's no making up such public purse waste nonsense ].

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proudloudandfnm 4 months, 3 weeks ago

Not so fast. Wynn is now building in Nassau. Freeport needs its hotels opened now. If Wynn is out the hotel corporation better get off its ass and open our hotels ASAP. If not that airlift we were promised in december will not happen. Celebration will have no choice but to find a healthy market. We will continue to lose large dry dock projects. Without our hotels Freeport's collapse will be complete by year end.

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