The Grand Lucayan resort in Grand Bahama.
By KHRISNA RUSSELL
Deputy Chief Reporter
OFFICIALS are eyeing a mid-February deadline for the completion of the sale of the Grand Lucayan resort in Grand Bahama.
According to Michael Scott, chairman of government’s special purpose vehicle that owns the resort, the agreement on the final transaction documents is the final step to the process.
He told The Tribune the sale had been somewhat delayed by deadly Hurricane Dorian. The storm also damaged the hotel.
“We are hoping to get the final transaction documents agreed by the middle of February,” Mr Scott said.
Asked about damage sustained to the hotel from the storm, Mr Scott said: “We are trying to settle the insurance claim now with the adjusters and underwriters.
“At the end of the day, we may have to decide whether or not we give Royal Caribbean credit for any insurance recovery we get so that’s still not decided yet.”
However he referred this newspaper to Finance Minister Peter Turnquest over questions as to whether government would see a financial return from money it has earmarked for the resort since purchasing it in 2018.
Last week, Mr Turnquest announced that government had budgeted $16.1m for Lucayan Renewal Holdings as he identified a number of non-hurricane related spending initiatives which totalled $119.9m for fiscal year 2019-2020. He said the Minnis administration considered these imperative for orderly, stable, sustainable and resilient governance.
At the time he was defending government’s intention to borrow $587.9m post-Hurricane Dorian, insisting the Minnis administration had the “appropriate response” to rebuilding the affected islands and revitalising the economy.
In December, Mr Scott told Tribune Business the government was aiming to close “fluid” negotiations for the Grand Lucayan’s sale by the end of 2019 as he hit out at the “shocking” state of Grand Bahama’s main airport.
At the time he compared the facility’s appearance to a “Red Cross relief shelter”.
He said at the time that the absence of meaningful airlift was impacting occupancies and business prospects for the Grand Lucayan, as well as other Freeport resorts that have opened post-Hurricane Dorian, although the property’s performance had been “significantly” better under the government than former owner, Hutchison Whampoa.
“We’re trying to get a signing of the documents by the end of the year, within the next two weeks,” Mr Scott said in December regarding the ITM Group/Royal Caribbean joint venture.
He continued: “There’s a lot of things that are fluid right now, so I can’t say too much. The aim is to get everything done by the end of the year.”
The Royal Caribbean/ITM project, which involves the creation of some 2,000 jobs via a $195m first phase investment that includes the resort purchase price, is among the projects Minnis administration is banking on to revive the Bahamian economy post-Dorian and return it to 2.1 percent growth by 2021.
Selling it will also reduce its contingent liabilities by some $35m, Tribune Business reported.
While the $65m purchase price may not recover the government’s entire Grand Lucayan outlay upfront, it will be hoping that the increased economic activity and extra employment created by the Royal Caribbean/ITM project will more than offset this on the back end.