By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The government’s proposal to structure an investment vehicle that would broaden Bahamian ownership of government buildings is “a win-win for everyone”, a Cabinet minister said yesterday.
Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business that such a plan would alleviate the financial burden imposed on the Public Treasury when it came to financing construction/leasing of property for the government.
Admitting that the Government “does not have a good track record” in owning/maintaining its real estate, he suggested that this job as well as the financing could be better performed by the private sector while also broadening ownership and wealth creation to more Bahamians.
Speaking after the Prime Minister on Friday revealed that the Government was exploring the creation of a 100 percent Bahamian-owned company, which would own all government buildings, Mr D’Aguilar added that it would help “break the the concentration of ownership” where a just small number of landlords earned significant rental income from leasing to the Government.
Arguing that some government properties were “dead in the water”, he told Tribune Business: “It seems like a win-win for everybody. You get the properties renovated, refurbished and restored, and the Government does not have to take on any new debt, borrowings or have to raise taxes to cover these costs.
“In the process of getting these properties redeveloped it creates construction jobs. Once that’s finished there will be maintenance jobs as a private sector component of this, and hopefully we will get a better record with the private sector than the public sector.
‘We will get a better work environment for the public service, since several buildings have closed early for years such as the Post Office, and that results in lower productivity.”
The structure referred to by the Prime Minister on Friday typically involves a trust or investment fund, which is created to own and hold government buildings. Bahamians will then be able to purchase shares in this structure to obtain an equity interest, with returns generated from the rent paid by the Government which, as a long-term tenant, will help mitigate risk.
“It will provide a modest return for Bahamian investors getting zero at the bank,” Mr D’Aguilar said. “Some of these buildings are sitting dead in the water. The Government does not have the best track record of owning and maintaining buildings. We have buildings that were started and not finished. The one next to the Attorney General’s Office on Thompson Boulevard has been sitting there for God knows how long.”
Mr D’Aguilar pointed to the former City Markets property on Market Street; the soon-to-be former Post Office building; the Clarence A Bain Building and Rodney Bain Building as examples of government buildings that have been allowed to deteriorate and effectively been abandoned.
Many observers believe the Government has not gotten value from its real estate portfolio, whether owned or leased, for years, with different rental rates and maintenance issues widespread.
Comments
Well_mudda_take_sic 4 years, 12 months ago
Who does this privileged 'Daddy-made' yapping little white-haired poodle think he's trying to fool? This fraudulent scheme has been conjured up by a relatively small group of the greediest and most wealthy Bahamians. It is designed to achieve only one thing: Create a vehicle by which properties owned by the government on behalf of all the Bahamian people, worth hundreds of millions of dollars, will be fleeced from the Bahamian people at large and put into the hands of a very greedy select few among us.
The poodle knows full well that government would be expected to forgo any dividends on whatever partial interest it gets to keep in certain of the transferred properties. This would be necessary to compensate the investors in the trust/investment fund for government's inability to pay the market rates of rent that would be demanded were it to occupy any of the re-developed properties. A government that had no money to maintain the properties in the first place, will certainly have no money to pay the market rates of rent that would be demanded by the trust/investment fund once the properties have been re-developed.
Any the poodle also knows full well that any hope of maintaining diversified ownership of the fund among many small investors would all too quickly be thwarted and roundly defeated by the very greedy and wealthy few who cooked up this whole idea to begin with. Make no mistake about that....we have seen it happen too many times before.
The greedy few behind this scandalous scheme obviously think Minnis is a donkey that they can all too easily ride right into the ground. We shall soon see from Minnis himself whether that is indeed the case.
Well_mudda_take_sic 4 years, 12 months ago
PART I
The yapping little white-haired poodle can say whatever he wants about this proposed fleecing of the Bahamian people. But this scandalous scheme has all the hallmarks of being an outrageously monstrous land grab by the wealthiest few in our country today. The stench of the greediest of them in the Lyford Cay community is palpable all over this proposed swindling of assets worth hundreds of millions of dollars from the Bahamian people.
It will not be long before we start hearing about the proposed waiver of stamp duty on all property transfers to the trust, a generous exemption from real property tax for a lengthy period on the transferred properties, customs duty exemptions for all materials imported by the trust to spruce up, restore and/or re-develop the properties, and so on and so on. Bahamians may be getting nothing or very little now from these dilapidated and/or abandoned properties, but that's not going to change when these properties come under the control of the trustees of the trust, who no doubt would comprise a select few of the wealthiest and greediest among us.
How would government go about ensuring it gets fair value for these assets for the Bahamian people? Many of the dilapidated and/or abandoned buildings sit on very valuable real estate, together worth hundreds of millions of dollars. Ideally each of the properties should be independently appraised (by more than one expert appraiser) to determine a minimum selling price. They could then be sold in a public auction where not only the proposed trust/investment fund, but also other competing bidders, would have an opportunity to bid up the starting asking price. The other competing bidders would have to be unrelated to the investment fund and banned for a lengthy period of time from investing in the trust or selling to it the properties they acquire at auction. This would at least avoid the huge and most egregious firesale discount that would surely otherwise exist under a bulk sale of the properties to a single buyer, the trust. See PART II immediately below.
Weezie 4 years, 12 months ago
Fair enough......have the properties independently appraised by three independent appraisers......but to auction them off would, I think, mean that the government properties would fall back into the hands of the white knights or the web shop owners. That would be far more egregious that what the PM proposed.
The objective of the government, it seems, is to ensure that the shares in the properties are as widely held as possible! But it seems that you are untrusting. You think that the government wants to further enrich its supposed rich white friends at Lyford Cay by making sure they end up with the shares in the company that holds the property.
That clearly falls into your pro PLP narrative. But I strongly disagree that you should sell the government's property at auction. That will do nothing to assist the small man in getting a piece of the pie......which has never been the intention of the PLP anyway so I understand why you say what you say.
Well_mudda_take_sic 4 years, 12 months ago
Well_mudda_take_sic 4 years, 12 months ago
PART II
D'Aguilar's suggestion that government would have newer buildings (with no mold) which would translate into better working conditions for civil servants is without merit. Our costly bloated civil work force has left government without the means to properly maintain any of its properties on a sustained basis. That certainly would not be fixed by transferring rundown properties to the trust. The government would just develop and rundown a whole new set of properties. Right now government has no rental or property tax cash outflows associated with its rundown properties, and obviously would not be able to pay a market rate of rent on any of the transferred properties once they have been re-developed anew by the trust. That naturally begs the question: Just who would be occupying these properties after they have been re-developed by the trust? And would the trust be able to sell the properties it acquires from government?
And as stated in my first post above, any hope of maintaining diversified ownership of the fund among many small investors would all too quickly be thwarted and roundly defeated by the very greedy and wealthy few who cooked up this whole idea to begin with. Once again, make no mistake about that....we have seen it happen too many times before.
I cannot emphasize enough that the greedy few behind this scandalous scheme obviously think Minnis is a donkey that they can all too easily ride right into the ground. And of our course we shall soon see from Minnis himself whether that is indeed the case.
Weezie 4 years, 12 months ago
I think everyone would agree that the buildings are run down because they are managed by government. So, what to do.......continue doing it the same 'ole way and be surprised when we get the same results.
It seems as if the Government is suggesting that they would contribute the land at fair market value. The Private sector would contribute the cash. The Government would NOT have to borrow any money and would get a building it could rent. Right now the property lies undeveloped and unless the private sector come up with the cash, the property will continue to lie undeveloped because the government ain't got no CASH and, unlike the PLP, this government don't want to borrow and borrow and borrow leading to downgrade after downgrade after downgrade!
So, that private sector cash would create construction jobs and government would get to rent a building that hopefully would be better maintained than if the government owned it. The rent, after the payment of expenses, would go, as dividends, to the many many shareholders who would put up the money instead of a few white knights or webshop owners or the PLP buddies you suggest the government auction the land off to.
If you are afraid that the rich people will end up with the shares and thereby benefit from this supposed "land grab" or "blatant tiefing of government property" then I suggest that the government make sure that no one person or company can own more than 1 to 5 percent of the shares.
But trust me, if you don't bring private sector CASH into the equation, those land and buildings will sit for years and years and years.......undeveloped or they will be given away by the PLP when then they get back into office as part of idiotic deals like the Star Academy on Wulff Road ($21 million spent on a government building that is not on land owned by the government and the project is now stopped) or the Independence Shopping Center on Blue Hill and East West Highway (where millions upon millions was forwarded to a contractor without any contract being in place) or Clinics in Cat Island and Eleuthera (where millions was spent or about to be spent on buildings that were neither needed nor could be equipped or staffed) and the list goes on!
Those examples are what happens when you let a PLP government build government buildings with taxpayer money. So, let's at least let this government try something new!
BONEFISH 4 years, 12 months ago
This idea was proposed by FS Wilson.A man removed by this FNM government.Like the person said to me,this is how the Bahamas works.You publicly disparaged people but secretly realize their ideas work.Then you pass their ideas to your supporters in the private sector and the public as your original ideas.A country of pirates
Well_mudda_take_sic 4 years, 11 months ago
Snake deserving credit for the initial idea behind this wrongful monstrous land grab from the Bahamian people would not surprise me at all. He and his wife Sharon know all about opportunistic land grabs....they already have quite a well known track record of 'taking' land from others who don't have the financial means to fight back.
Well_mudda_take_sic 4 years, 12 months ago
Government could easily ensure all eggs don't end up in one investor group's basket by limiting the number and/or value of properties any single investor or one investor group can acquire at auction, including the proposed trust/investment fund. There's no need to have only one investment fund bidding for the properties at auction. There may be other enterprising Bahamians willing to form investor groups and/or investment funds to help achieved the desired diversification.
It's a given that only Bahamians with disposable income will be able to participate in any investment scheme involving these properties....and we all know just how few they are in our society today. Most Bahamians will therefore be disenfranchised of their interest in these rundown properties if you accept that they are currently owned by the government on behalf of all the Bahamian people and not just those Bahamians who happen to have disposable income. The harsh reality is we are a society of the have and the have nots, and the have nots will not be able to participate in a trust/investment fund.
To prevent the barracudas from quickly devouring the guppy investors in the trust/investment fund, the investor shares would have to be non-transferable and non-redeemable, and the trust/investment fund would have to be without the ability to sell or otherwise dispose of the properties. These onerous restrictions, while being absolutely necessary to preserve the intended diversity of investors and prevent the barracudas from feasting, obviously would not be appealing to barracudas and their big wallets. But that's just the point - they should not be given the opportunity to feast at the expense of most Bahamians losing their interest in these rundown properties.
DDK 4 years, 12 months ago
"In the process of getting these properties redeveloped it creates construction jobs. Once that’s finished there will be maintenance jobs as a private sector component of this, and hopefully we will get a better record with the private sector than the public sector."
In the process of creating these properties there have already been construction jobs and maintenance jobs at The People's expense. Do these jokers take EVERYBODY for fools? Rank corruption and inefficiency from top to bottom have been the problem with ALL of The People's assets for the last five decades.
bogart 4 years, 12 months ago
IF DA PROJECT IS PUT IN PLACE TO NEW INVESTORS TO RENT TO DA GOVT WHO PAYS SOME $50 MILLION RENT..............DEN WHY WILL DA FEW OLD INVESTORS WHO DONE BIN RENTING TO BUILDINGS.......ga gon be doing wid dere coming enpty buildings........who employin Bahamians to upkeeps dere buildings........Can da gubbermint designing to put da business people out...workin business in free market.....??????..........or will it jus been adding new office space to keep the increasing gubbermint growing......like all previous govt wid best plans to reduce govt size....??????
BONEFISH 4 years, 12 months ago
Ask the good minister or the PM where this idea originated from? I know they won't say.I have an idea why it being pushed now.Somebody today told me how this idea came about.It just shows how this country really works.The media in the Bahamas needs to do real investigative work and not simply print politicians' statements.
bogart 4 years, 12 months ago
INSTEAD....OF SKIRTING THE NETTT......EFFECT ON THE ENTIRE NATION.....IN ALL EFFRCTS.......AN THE NETTT EFFECT IS NEGATIVE..........SIMPLY CLOSE THEM DOWN....INSTEAD OF FULLY KNOWING DERE EXPOTIENTIAL MONOPOLY GROWTH WILL......SQUEEZE ERRYTING...NO MATTER HOW MUCK ....DERE WILL ALWAYS BEEN PROFITS OFF DA BACKS OF PEOPLE...NOW INCREASING TO BUSINESSES..expotientially growing.........RENTAL PROPERTIES....FOOD NEXT...??.....Laundry...??.....CAR REMTALS....?......any ??....only time...!!!!.....SIMPLE.....jus look at some central american countries dominated by few families.....wid dere population on migrant train to US.....SOOOOO...the operations destroy inner city gets worser....huge cash flows goes into competing with other hard operate in supply an demand...pushing out thousands of small businesses......monopoly lowers wages...benefits..gained supply an demand forces......critical in taking on and outspemding for upper leading hand in local news media...tv.........huge cash growing expotientially dictates to govt regardless of politicans to represent all....an likely encoirage cronies...........da trajectory is emminent.....9 MPs opposition ? voted NO....an 25 MPs govt voted to overturn official referendum....NO ...BY DEMOCRATIC VOTIN BY NATION.....if ..NO.. in Opposition was.. NO.. back then....so ...NO... should be same ...NO...now....coming to see the same results now negative to nation back them.....Close the detrimential effect to businesses...people...nation....SHUT DA WEB GAMBLIN......end of that
proudloudandfnm 4 years, 12 months ago
It's not a bad idea. Only real problem is you could never trust our government to maintain anything regardless of funding. I suspect an investment in this program would be a complete waste of money....
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