By NEIL HARTNELL
Tribune Business Editor
An outspoken QC yesterday pronounced himself “discouraged” by Wynn Group’s ability to make progress in Nassau rather than Freeport, blasting: “We’ve got the short end of the stick again.”
Fred Smith QC, the Freeport-based Callenders & Co managing partner, queried whether reviving Grand Bahama’s struggling economy remained a Government priority after the Grand Lucayan’s potential purchaser broke ground on its long-awaited $120m Goodman’s Bay condo-hotel/residences project.
Suggesting that the development was taking place “in the wrong city”, Mr Smith said he felt “abandoned” by the Minnis administration and described Freeport’s tourism economy as being in a state of “near collapse”.
“I am discouraged to see that even though the Government made resurrecting the Freeport economy a priority, the major investor it has proffered as potentially coming to a deal on the Lucayan Strip has instead embarked on a $120 million project in Nassau,” he told Tribune Business.
“Once again Freeport gets the short end of the stick, even with the investor supposed to be interested in Freeport. So many deals should be happening in Freeport, with its amazing tourism industry infrastructure, and instead we have Nassau keep stealing the show.”
Mr Smith’s comments show that efforts by Paul Wynn, the Wynn Group’s chief executive, to reassure Freeport residents he still remains interested in the Grand Lucayan - and that the deal is getting near “to the finish line” - have not had the desired effect on everybody.
Acknowledging concerns that Wynn Group might retreat from its $65 million all-cash offer if the deal did not close soon, Mr Wynn said: “It’s been a concern but it’s one of these things. There’s the vendors, the tenants, myself and the Government. There is a lot of work and the Government is doing all the heavy lifting here.
“It’s very complex, and a very difficult project for the country, but I think we’re almost at the finish line now. It’s been very hard... There are just so many moving parts. We’re near the finish line.”
Mr Wynn, though, gave no specific details on his plans for the Grand Lucayan, or a likely timeline for when the purchase from Cheung Kong (CK) Property Holdings will close. The latter company is the entity that holds all real estate and resort assets formerly belonging to Hutchison Whampoa.
Most of the Grand Lucayan has now been closed for 19 months, following the devastation inflicted by Hurricane Matthew in October 2016. It has effectively deprived Grand Bahama of a ‘mass market’ stopover tourism industry, with around 1,000 direct jobs lost, and 1,100 rooms - amounting to 59 per cent of the island’s inventory - placed out of service.
A dispute over hurricane restoration with CK Property Holdings prompted the departure of Memories, the hotel brand operating one of the three Grand Lucayan properties. While Memories’ affiliate, Vacation Express, resumed its summer airlift programme yesterday, Mr Smith said the Government should have refused to provide a 20-year renewal of all CK Property Holdings’ tax breaks until it financed repairs to, and the re-opening of, the Grand Lucayan.
“I am very discouraged as a Freeporter,” he told Tribune Business. “I feel abandoned by my government. As a licensee and citizen of Freeport, I am very discouraged by the lack of attention by the Port Authority, Hutchison and the Government. I hate to be the harbinger of doom and gloom, but it’s [Freeport’s tourism economy] near collapse.”
Carey Leonard, Mr Smith’s colleague at Callenders & Co, yesterday said his conversations with Cabinet ministers indicated the Government was “working hard” to resolve the Grand Lucayan situation.
Yet without positive news within the next two months, he warned that many Port Lucaya Marketplace tenants currently “hanging on by a thread” were likely to close their doors. “I do not know how the businesses are holding on,” Mr Leonard told Tribune Business.
“I know a number of them are really hurting at the moment. Those businesses are really feeling it, and holding on by a thread. A number of them have already laid people off. I think some businesses are going to need an answer within a month or two. I really believe that.”
While Freeport’s cruise business has been maintained, Mr Leonard said per capita spending yields were much lower in comparison to stopover visitors. “At the moment we may as well say Freeport’s tourism product is dead,” he added.
“It’s that hotel guest that goes to Port Lucaya, has a drink and goes to a nightclub and restaurant; that’s what we need. They spend a couple hundred dollars in an evening. The cruise passenger does not do that. They get some tour package on the boat, the cruise ship takes a great chunk out of that, and the guy here makes something - but not much - out of it. The air arrival is the critical one for us.”
Kwasi Thompson, minister of state for Grand Bahama, previously indicated that the Government is determined that the Grand Lucayan become self-sufficient and weaned off government subsidies that once amounted to $29 million annually.
To achieve this, and build a sustainable tourism product in Freeport, it wants to transform the Lucayan strip into a true ‘destination’ product. Mr Thompson described achieving this as a ‘jigsaw’, with the Government still trying to fit the many ‘pieces of the puzzle’ - hotel brands, airlift and amenities - together.