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Lucayan Managers Told: 'There's No More Money'

The Grand Lucayan Resort.

The Grand Lucayan Resort.

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Grand Lucayan managers were yesterday bluntly warned "there's no more money" after they rejected the Government's $3.1m payout offer and took their grievances to the Industrial Tribunal.

Michael Scott, chairman of the Government-owned vehicle that owns the resort, told Tribune Business that its Board and the Government had no option but "to draw a line in the sand" to protect the financial interests of Bahamian taxpayer amid ongoing efforts to sell the property.

Disclosing that the Government and the Bahamas Hotel Managerial Association (BHMA), which represents the resort's 114 managers, were still $2.4m apart on their valuations of the voluntary separation packages (VSEPs) that should be offered to those wanting to leave, Mr Scott suggested the Grand Lucayan Board would now seek to cut Mr Ferguson out of the discussions.

He indicated that it would deal directly with the 90 managers wanting to leave if the terms were right, with the Board and government adopting a "take it or leave it" position where those who opted not to take the VSEP will be expected to continue reporting to work.

Mr Scott described the worker payouts as a "sideshow" and distraction from the Board's main work, which is to focus on selling the Grand Lucayan to the buyer best able to transform the resort and surrounding area into a true destination, thereby reviving Freeport's and the wider Grand Bahama tourism product.

The Grand Lucayan Renewal Holdings chairman revealed that the Board and its adviser, Canadian-headquartered real estate firm, Colliers, had narrowed the 60 bids to acquire the resort down to "three or four finalists" and will soon be in a position to make its recommendation on the winner to the Government.

Mr Scott spoke out after Obie Ferguson, president and attorney for the BHMA, yesterday brought the VSEP battle before the Industrial Tribunal in Freeport, after the Grand Lucayan's managers last week "overwhelmingly" rejected the Government's February 27, 2019, offer to them.

Mr Ferguson told Tribune Business that offer, submitted by Dionisio D'Aguilar, minister of tourism and aviation, was virtually identical to the last proposal by the Grand Lucayan Renewal Holdings Board.

He added that it even represented "a slight step back", as the total payout value had been reduced from the Board's previous $3.2m to $3.1m. Mr Ferguson confirmed that the BHMA felt the total due to its members was $5.5-$5.6m, a figure that includes the annuity retirement fund set up by the resort's previous owner, Hutchison Whampoa.

Describing the situation as "terrible" and "ridiculous", the Trades Union Congress (TUC) chief and veteran labour advocate accused the Government and resort's Board of "failing to negotiate in good fait" and show they wanted an "amicable resolution"

He said the Grand Lucayan's managers - now effectively government employees - were questioning why they were not being offered similar VSEP terms to past Hotel Corporation workers, or fellow public sector employees at the likes of Bahamas Power & Light (BPL) and the Bahamas Telecommunications Company (BTC).

Mr Ferguson said acting Industrial Tribunal vice-president, Helen Jones, yesterday "required" the two sides to explain how the two sides arrived at their respective payout figures, and set a March 20 date for them to reappear before her.

However, Mr Scott argued that the BHMA's recourse to the Industrial Tribunal was "disingenuous" and had "no basis" because its industrial agreement with the Grand Lucayan expired in 2014 and no replacement had been agreed.

This, though, was disputed by Mr Ferguson, who argued that normal protocol was for the terms of an expired industrial agreement to remain in place and be honoured until a new deal was negotiated.

He said Mr Scott had agreed to this when the BHMA first brought the Grand Lucayan VSEP issue before the Industrial Tribunal on November 1 last year, adding that the chairman "gave a written position in his defence to the Tribunal that he and Grand Lucayan Renewal Holdings will honour this agreement and settle all matters".

"While they were there they agreed an attempt would be made to settle the matter outside the Tribunal," Mr Ferguson continued. "Obviously there's been no progress made with the matter in terms of a reasonable settlement.

"We've had three meetings with him. We went from $2.7m to $3.2m, and the proposal that was sent on February 27 was reduced to $3.1m - a slight step back. That's why the workers rejected it overwhelmingly; everyone.'

But Mr Scott, who sent "a team" and attorneys to the Industrial Tribunal yesterday when he learned of the BHMA's move, told Tribune Business: "I've been a nice guy long enough."

"That's a joke," he said of the union's action. "They don't have the basis to be before the Industrial Tribunal because they have no management agreement. There was a meeting before the Tribunal but it was improperly convened.

"This is a voluntary separation agreement. There is no valid management agreement between the union and the hotel. That's my position and I'm sticking to it."

Mr Scott then indicated the Government and Lucayan Renewal Holdings Board will deal direct with all managerial staff who want to leave in a bid to resolve a long-running matter, suggesting they may cut out Mr Ferguson and the union.

"My position is he is superfluous to this whole arrangement," he added of the TUC president. "I intend, in conjunction with the Board, to deal directly with individual members of staff.

"The Government's position in the same position we had before. There was an initial offer to them [the managers] of $2.64m, I persuaded the Government to increase that by $500,000 so it was $3.1m. They wanted $5.5m, and never the twain shall meet.

"It won't happen; that won't happen. It is what it is. This whole thing is a PR stunt managed by him [Mr Ferguson] and I'm not getting sucked into that vortex," Mr Scott continued. "As far as I am concerned the Board, myself and the management team's position is resolute. Have a nice day. There is no more money. That's it. We're drawing a line in the sand."

He added that the Lucayan Renewal Holdings Board was now more focused on the resort's sale than the manager payouts, and had succeeded with its advisers in whittling the 60-strong bidder field down to the best and most serious offers.

"We're still in negotiations and at a very sensitive stage," Mr Scott told Tribune Business. "The position is that with Colliers we've narrowed down the list of prospective bidders to tree or four finalists in terms of suitability of offer, quality of offer and character of the offer.

"Colliers will make their recommendation to us, we'll consider it as a Board and make our recommendation to Cabinet, and they'll make the final selection." The front-runner is thought to be the bid from Royal Caribbean in partnership with Mexican cruise port developer, ITM Group, which proposes to redevelop both the Grand Lucayan and Freeport Harbour via water-based adventure theme parks.

However, Mr Scott's and Mr Ferguson's respective comments indicate the two sides remain as far apart as ever on the managerial payouts. The former has previously argued that comparisons with previous public sector VSEPs, both at the Hotel Corporation and public utilities, are inappropriate and akin to matching "apples and oranges" because they were all operating businesses in the process of being sold while the Grand Lucayan was not.

Yet Mr Ferguson said yesterday: "We're really being consistent with what happened in the past. We're not asking for anything out of the ordinary. We're asking for the same system used in the past, but they seem to have a problem following it and are not giving us a reason why.

"You can't reduce 21 years of service to 12 without giving us some explanation as to why. The workers are very concerned. The atmosphere is ridiculous; it's very, very bad. I'm very discouraged and the workers are very discouraged.

"They were shown a copy of the VSEPs offer to the hotel and other workers at BTC, BPL and Water & Sewerage, and they are wondering what is wrong with them. Why shouldn't they be treated the same," Mr Ferguson said.

"But here we have a situation where the chairman said: 'Take it or leave it'. That's not a way to negotiate a a VSEP." Mr Ferguson confirmed that the union had valued the total payout due to BHMA members at $5.5m, inclusive of the retirement annuity, although it dropped this sum to $4.1m at an earlier point in negotiations.

The Lucayan Renewal Holdings Board's position, though, is that the union should be pursuing Hutchison Whampoa - not the Government - over the retirement annuity. It is also basing the VSEP offers on the Employment Act, which caps payouts at 12 years of service, even though the union argues that applies to redundancy/terminations - not voluntary departures.

Mr Ferguson confirmed that Mr D'Aguilar had sought a meeting with him yesterday, but he was unable to attend as the times clashed with his appearance before the Industrial Tribunal. He added that he had written to the minister seeking an alternative date in a bid to "put this matter behind us",.

"We're trying to find a way to find some resolution, but they're not prepared to get to an amicable conclusion," Mr Ferguson argued of the Board. "They should come to us with something reasonable but they haven't. That can't be negotiating in good faith. I would expect the minister of tourism to get involved at some stage so we can put this behind us."

Mr Ferguson briefed BHMA members on the Industrial Tribunal hearing's outcome yesterday afternoon.

Comments

Well_mudda_take_sic 8 months, 4 weeks ago

Doofus Minnis should have never taken this failed hotel with its existing and ongoing liabilities off of the hands of Hutchison Whampoa (a deep pocket Red Chinese company) and on to the backs of Bahamian taxpayers. We must ask ourselves why was Hutchison Whampoa so easily let off the hook by the Minnis-led FNM government? Over the years Hutchison Whampoa has enjoyed enormous concessions of one kind or another. Furthermore, the side deals associated with the government's acquisition and maintenance of this hotel have only benefited a select few cronies of the Minnis-led FNM government, at great cost to Bahamian taxpayers. And Michael Scott still has the audacity to pretend there's a long line of buyers chomping at the bits to buy this failed hotel at a price that would have our government recover the $100 million plus it has so far sunk into it, inclusive of operating losses incurred and borne to date. Now that's a real joke if ever I heard one! LMAO

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banker 8 months, 4 weeks ago

What you fail to understand, is that because the Chinese have deep pockets, they can afford to let it sit and languish. It is no skin off their back. It might even improve their bottom line with write-offs back home. Objectively, the Minnis adminstration knows this. Hutchison had no appetite to actively pursue the re-opening, so Minnis had to try something. Was it the best option? Who knows. Those special vehicles are off the books (as were the special vehicles that killed Enron) and it sounds kind of dodgy to me. You have to understand that Minnis is a linear thinker. He, like most Bahamian leaders cannot think or act outside the box. That sort of behaviour is driven out of us. But at least he is better than Perry Christie who was a no-thinker and ran a band of thieves, criminals, lowlifes and degenerates in the PLP.

There is lots of money floating around Nassau. Why didn't they create a public company, float the shares on BISX and let Bahamians in on the investment action? That is just one idea. They could have approached private equity partners, but they are a bunch of idiot know-nothings and don't know how. They should have hired an American or Canadian company to navigate their way out of this, but they are too proud and stupid to do so.

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Well_mudda_take_sic 8 months, 4 weeks ago

No foreign corporate interest that receives huge concessions from our government (the Bahamian people) would be able to let a property languish if our brain-dead governments would simply include provisions to the material agreements that would require the property to be returned to the Bahamian people whenever a lengthy shutdown or abandonment would pose a serious threat to our country's vital economic or security interests. Such a return of the property should be under reasonable conditions and circumstances and at a significantly discounted price to then current market value. This is a fair condition that should exist in all of these agreements whereby foreign corporate interests are granted exceptionally generous concessions tied to strategically or economically important property. Our out-gunned government officials always end up negotiating a terrible deal for the Bahamian people, one that ultimately benefits only a few corrupt politicians and their cronies. Truly a pathetic ongoing situation.

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DDK 8 months, 4 weeks ago

You both make good points. Now it's a mess with our greedy unionists never being grateful for what is offered.....

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tetelestai 8 months, 4 weeks ago

Mudda, no argument. But one minor point of clarification, if I might. Since 2005, i.e., first Perry Christie administration, all HOAs included a "clawback" clause, which allows the government to either reduce the concessions offered (including crown land) or allow the government to revise the HOA, or both. Of course, this situation preceded 2005, but at least we (Bahamian government) recognized that we were continually coming out on the short stick of these negotiations.

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TalRussell 8 months, 4 weeks ago

Yes, yes and yes - Comrades Minnis's, KP's and Carl Wilshire's, PublicPurse's "$100 million"- and still spending - purchase the Lucayan Hotel, can best be described as bordering on reckless pro-communism economics.
Yes, no with no rolls toilet papesr included in deal - what will the three red Imperials use wipe the shitty mess from their red asses with now....
Calls for a Royal Commission of Inquiry, headed by we beloved Queen, yes, no?
The PM said, “I have just recently made a deposit for the purchase of this hotel,” “I have signed the Purchase Agreement only to (save) not send home the jobs of 400 Grand Bahamalanders........ can't just make this no rolls toilet papers pro communism economics up, yes, no?

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bogart 8 months, 4 weeks ago

BEFORE ACQUIRING ....DIS HOTEL.......IT IS UNCEIVABLE....UNBELIEVING.....DAT....A SLEW OF GUBBERMINT ACCOUNTING...MATHEMATICAL....ARITHMETIC..LEGAL.....EXPERTS....AT DIS AMOUNT OF PURCHASE PRICE...CHARGES...CONTRACTS....LABOUR COSTS...LABOUR LAWS.........RECEIVABLES...SALARIES...REDUNDANCIES....PENSIONS...RTCETC........HAD COMPILED DA MONEY MATTERS..PROJECTIONS....STAFFING...OPERATIONS....PLANS...OPMIMUMS...DEFICIENCIES...HOTEL .FILE PAYING...DEFINITELY....LOW....DEFINITELY HIGH COSTS RANGES...,!!!.SITTING ON SOMEONE DESK.....,!!.....erry junior accounting student done know essentioal procedures...!!! It aint been no crying Pore mout dey dont have money.....as admirable as Mr. Scott trying to save....bless him......it gubbermint owe workers by law dey hav to go by the law an give we pore taxpayers funded hotel....monies owed to workers...no charade of stenching.......union would den .. seems to push lawsuit against hotel...push into liquidation...mabye...???

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TalRussell 8 months, 4 weeks ago

Yes, yes and yes - ironically, most Freeporters are not as gullible as the five Imperial red MP's are making them out be - they've long known the "had" to purchase Lucayan Hotel by Minnis, KP and Carl Wilshire, was a shitty deal not worth anywhere near the $65 million - even if Whampoa, had not removed - all the opened and unopened case rolls toilet papers from the hotel's premises, yes, no?
You just can't make up, how the left hurricane damaged hotel's chairman Michael was quickly on phone to Whampoa after the Imperial reds tooks possession the Lucayan - demanding they immediately return every single case opened and unopened rolls shi# papers, yes,no - true? Still, how Whampoa was allowed walk away from hurricane damaged hotel, with $35 million collected in insurance monies, yes, no?

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sealice 8 months, 4 weeks ago

this hotel is the epitome of the failure that Freeport clearly is. I mean just bloody kill it put the people out of their misery.

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birdiestrachan 8 months, 4 weeks ago

One thing for sure No one can be worse than doc. Doc did not even collect the \ Stamp Tax from Hutchinson How DUMB is that??. In spite of those who would like to lift him up the peoples time voters. The Bahamas is in trouble with "roc wit doc:'"

not to mention OBAN.

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Well_mudda_take_sic 8 months, 4 weeks ago

Most people posting to this web site know that you are a Davis-connected (paid) troll tasked with injecting as much confusion, mayhem and misinformation as possible in an effort to dampen or drown out the voice of those who have very legitimate concerns for public consumption. Thankfully most commenters and readers now completely ignore whatever is written under your handle, as well as the handles of others like you with your same intent. LMAO

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banker 8 months, 4 weeks ago

I have a sentimental link to the hotel or at least the property that it sits on. Apparently there was a previous hotel on the property called the Atlantik or Atlantik Beach Hotel. My parents spent their honeymoon there and I apparently I was made there. This was before it belonged to Hutchison, otherwise perhaps I would have a pseudo-legitimate claim to a Chinese passport.

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Well_mudda_take_sic 8 months, 4 weeks ago

I was a guest at the Atlantik on several occasions in the early 80's. If memory serves me well it was developed/owned by a German fella (Meister?)

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TalRussell 8 months, 4 weeks ago

Yes, yes and yes ma comrade Banker, here's little something dug up from past to help you overcome you historic conception emotions.
Thousands Freeporters and tourists alike, poured out onto the streets to witness Freeport's Atlantic Beach Hotel being exploded back in 1998 to make way for the Lucayan Hotel..... which undoubtedly the Lucayan is but only weeks away from new owners scheduling her meeting her own death appointment with the Explosion Maker, yes, no?

  • The Freeport's Atlantic Beach Hotel's demolition -

https://www.youtube.com/watch?v=msD7b...">https://www.youtube.com/watch?v=msD7b...

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banker 8 months, 4 weeks ago

Thanks for that. I would have noted the demolition of the hotel because it would have undoubtedly made the papers. But in 1998, I was away at school.

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TigerB 8 months, 4 weeks ago

Anyone seen the Bazaar lately? or the surrounding hotel properties? They need to be demolished...they are all eyesore, bush and weed.. I pass them every day to and from work. Maybe you folks in Nassau cannot appreciate what the gov't is trying to do, so we use the medium to cut down and criticize what is being done. Most of us here can live with that. You better hope Atlantis or Baha mar don't close. My take is better to save a hotel, keep it attractive til a buyer comes along. No one wants the Royal Oasis now, its just an old building sitting in the bushes.

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Well_mudda_take_sic 8 months, 4 weeks ago

Grand Bahama was doomed long ago by Poodling when he accepted a small 7 or 8% shareholding in the Grand Bahama Port Authority (GBPA) from Edward St. George and Sir Jack Hayward to basically let them get away with anything they wanted to do under the Hawksbill Creek Agreement, including getting extensions of the very generous tax exemptions and other concessions available under that Agreement. The smart money quickly abandoned Grand Bahama in the late 1960's and early 1970's and never returned. The very greedy St. George and Hayward, and their family members, cashed out most of their holdings and other interests in the GBPA years ago by selling off to the Red Chinese. And we all know what has happened to Grand Bahama since then under Hutchison Whampoa's rule. Fraud and corruption between our most senior elected officials and greedy foreign investors have always been the dark cloud hovering over Grand Bahama and its pitiful situation.

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TalRussell 8 months, 4 weeks ago

Yes, yes and yes the long in years mystery surrounding whatever hell happened to the supposedly 7% shareholdings - supposedly issued to and owned by Colony of Out Islands in the the Grand Bahama Port Authority, or some subsidiary of, yes, no and if so be the accurate case - where in hell are the supposedly 7% Share Certificates being kept, and has the any comrade from this hereto Tribune newspaper, ever asks to actually see and touched them supposedly 7% Share Certificates..... word on street corners has it the 7% Share Certificates just supposedly vanished.... were shares sold and who hell was monies paid to, yes, no didn't the Papa Hubert administration promising take steps ask partition the court to help them look for the 7% shares that supposedly existed at one time or another, yes, no?

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Well_mudda_take_sic 8 months, 4 weeks ago

Most people posting to this web site know that you are a Minnis-connected (paid) troll tasked with injecting as much confusion, mayhem and misinformation as possible in an effort to dampen or drown out the voice of those who have very legitimate concerns for public consumption. Thankfully most commenters and readers now completely ignore whatever is written under your handle, as well as the handles of others like you with your same intent. LMAO

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Dawes 8 months, 4 weeks ago

They should be offered what they are entitled to by law. If the Government is not offering that then they need to up it. If they are then thats it.

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BONEFISH 8 months, 4 weeks ago

The cabinet made a purely political decision to pay the line staff more than the directors of the SPV wanted. Now the managers want theirs. They are being told there is no money.Right about that,this is the taxpayers'money.

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