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Lucayan Valuation Only Now Underway

The Grand Lucayan resort.

The Grand Lucayan resort.

By KHRISNA RUSSELL

Deputy Chief Reporter

krussell@tribunemedia.net

AS the Minnis administration aims to complete the purchase of the Grand Lucayan resort in Grand Bahama next week, The Tribune was told officials are in the process of having the resort reappraised for reselling purposes.

While the final details are being decided, high-level sources told this newspaper the government is also mulling over determining whether a brand will be chosen in conjunction with a developer to manage the Grand Lucayan once the sale is complete.

In 2015, it was reported the market value of the resort was placed at $57m. Later, in 2017, the value was estimated at around $63.1m if the property was operating at stabilised levels. The government did not seek a new appraisal prior to solidifying interest in the Grand Lucayan, The Tribune was told, but relied on the 2015 appraisal value.

When contacted yesterday, Progressive Liberal Party Leader Philip “Brave” Davis said the news was foolish.

“It is ludicrous for the government to get an appraisal after agreeing a price and making a down payment,” Mr Davis told The Tribune.

“It supports what I said yesterday. They are incompetent and making things up as they go.

The full purchase price is $65m, Prime Minister Dr Hubert Minnis has said. Officials had previously given a timeline of 30 days for this transaction to be done.

Since Dr Minnis announced last month the government made a $10m deposit on the property, many have argued the circumstances surrounding the sale remain vague. Critics have also said the Minnis administration has not properly explained its goals for the hotel and Grand Bahama’s economy.

Among the critics is Mr Davis. On Tuesday, Mr Davis 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 earlier this week.

“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 hands.”

Mr Davis added: “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.”

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.

Comments

gbgal 2 months, 1 week ago

How many guests needed monthly to make it pay? Where will they come from and how will they be enticed? Will they come?

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FPO 2 months, 1 week ago

Buying the hotel is part of the greater plan for turning Freeport into the Silicon Valley of the Caribbean. The closed casino can become a cryptocurrency technology centre. http://www.tribune242.com/news/2018/j..." rel="nofollow">http://www.tribune242.com/news/2018/j...

Maybe the focus should be on Nassau since it's always $200- cheaper to fly there. I can remember when Freeport was an interesting and almost exciting place. Let us all hope something happens soon. That is besides VAT going to 15%.

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TalRussell 2 months, 1 week ago

Comrades Papa Hubert and Loretta - being proven right about leadership flaws Minnis, again.
Shouldn't be brushed over how Her Excellency - once before had step in ordering repossession Minnis's government issued official opposition's leader's car's license plates.
Papa Hubert's, mean streak - also had ordered repossession by tow truck, the former PM's government issued car and license plates - forcing both Pindling and Marguerite, be left all car less and left hitch rides get to attend sessions House of Assembly and back home, and do their grocery shopping and run errands around Nassau Town..... and that's fact.

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birdiestrachan 2 months, 1 week ago

In sensible circumstances Appraisals are done before purchases. Of course in doc and Turnquest world they are done after purchase.

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