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‘What Was Lucayan Valued At?’

The Grand Lucayan resort.

The Grand Lucayan resort.

OFFICIAL Opposition Leader Philip “Brave” Davis yesterday demanded the government make public an appraisal done on the Grand Lucayan, telling supporters the Minnis administration may be spending far more than the resort’s estimated value.

He further questioned who was set to have control over the Grand Bahama International Airport and the provisions set to secure airlift into the island.

During a press conference at his party’s headquarters, Mr Davis again called for the government to outline and explain to Bahamians its strategy for the completion of renovations, opening and successful operation of the resort.

“A full and frank disclosure should at the very least include a structural engineering and a quantity surveyor’s report before committing the Bahamian people to a $65m dollar debt,” Mr Davis said.

“We understand that there was an appraisal done on the property and we ask the government to make the document available as it is clear that the government is paying far more than the appraised value.

“What is the status of the business plan? This is the blueprint and the exit strategy as this hotel is not a going concern and all business efforts have not been very successful. What is different and special this time around? Who is the financier and what are the detailed terms of the loan?

“Of the potential buyers whose proposals (Hotel Corporation Chairman) Michael Scott claims to be reviewing, why is the government refusing to simply put the proposed buyer and seller together since this is a private commercial transaction? Who is the casino operator and the terms? Usually this is in place before any agreement is made or any money changes hand.

“Who will have control of the Grand Bahama International Airport and what provisions have been made to secure adequate airlift into Grand Bahama? How will the property and tourism product be branded? I point out that the government has already committed some $20 million in marketing support for the Grand Bahama tourism product in the current fiscal year.”

Last month, Prime Minister Dr Hubert Minnis announced the government purchased the Grand Lucayan, making a $10m deposit on the property. He said the sale should be wrapped up within a 30-day period.

While the government has not revealed much about the payment details, The Tribune was told last week the government intends to write a promissory note to grand Lucayan owner Hutchinson Whampoa to complete the $65m purchase of the property.

A high-level source revealed the schedule for the sale includes another $20m payment when the sale document is complete and the property is conveyed, and then $5m payments every six months until the balance is settled.

“We’ve agreed to pay $10m at the signing of the letter of intent,” the high-level government insider said last week, “and another $20m when the sale document is completed and property is conveyed to us. Then, every six months after that pay we’ll pay $5m until the balance is liquidated. I believe there is interest on it, three percent.

“It’s a promissory note. We’re giving them a promissory note, it’s not a strict loan in a sense. The government is going to borrow money but this whole transaction is an investment so we’re acquiring an asset and it will not count towards our annual deficit. Now if the asset is impaired, if the value goes below what we paid for it, the deficit would have to be shown as a recurrent expenditure,” the source added.

Mr Davis has previously said to purchase the Grand Lucayan would be a waste of money without a proper plan to justify how the money would be recouped.

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

 The Grand Lucayan resort features three brands: Memories, the 500-room Breaker’s Cay and Lighthouse Pointe.

The hotel closed in October 2016 for repairs after it suffered damage from Hurricane Matthew leading almost 1,000 people to lose their jobs.

In November 2016, only the 196-room Lighthouse Pointe reopened.

Comments

Economist 2 months, 1 week ago

He knows full well how much it is worth. As part of the former government he was privy to the information. So Mr. Davis, you tell us.

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TalRussell 2 months, 1 week ago

Ma Comrades, it looms large - if the bell rungs check if we have clause in we constitution - evoke something similar to US's, 25th Amendment... It's over this Imperial red shirts regime.

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Bonefishpete 2 months, 1 week ago

I suspect due diligence was skipped.

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bogart 2 months, 1 week ago

4 th para down the Leader of the Opposition mentions "structural engineering" and "quantity surveyor's report"......on this valuation subject, ...well thats good...but there is reproduction costs....then theres market valuation.....then theres valuation by income....We already know that the hotel was losing money....noone wanted to buy it...as it was not feasible at the 100m mark or the 65m mark...plus it needs injections....so the Opposition leader should know the answer......The immediate closure of the hotel would put 400 persons out of work and have a cascading effect to numerous other areas businesses significantly causing more harmful effect to persons already struggling to survive.....plus the papers putting out pamphlet with hundreds of GB homes repossessed does not help anyone bit exercerbates a bad situation.....many lending institutions already hold homes as collateral for businesses surviving...and massive selling further devalues all collateral....causing lenfong instititions to revise risk ratios further restricting borrowers.....pore struggling businesses cant win fer losing....mudda tek sic.....

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licks2 2 months, 1 week ago

Mr Davis said that the sale of the building was a PLP project. . .but as with BAMSI and others. . .he don't ever know anything!! Hahahahahahahahahahahahahahahaha! New name is Mr. Brave "I een eva know nutin" Davis: MP!

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