By KHRISNA RUSSELL
Tribune Chief Reporter
PROGRESSIVE Liberal Party Leader Philip “Brave” Davis said the Grand Lucayan’s sale to foreign interests signifies a loss of tens of millions in taxpayer dollars, vindicating the party over its long held position that government should not have purchased the property.
Mr Davis’ point of contention is that government purchased the resort from former owner Hutchinson Whampoa at a cost of $65m in 2018, but sold it to Royal Caribbean International and ITM Group for $50m. This, he said, was in addition to millions more already spent in operational costs.
“On the face of it, it would seem that we have gotten swing again,” Mr Davis said yesterday at his party’s headquarters on Farrington Road.
For his part, PLP Deputy Leader Chester Cooper said he was concerned about the financial aspect of the sale and questioned the concessions that may have come along with it. Mr Cooper told reporters yesterday it was his suspicion that when the full details are revealed, Bahamians will be left disappointed.
The purchase deal for the Grand Lucayan resort was signed Monday. This will set in motion plans for a $300m investment development by RCI and ITM to transform Grand Bahama and revive its beleaguered economy.
“From the prime minister’s statement the true sale price to RCCL remains a mystery and the total cost of this hotel purchase from Hutchinson Whampoa to the Bahamians taxpayers is also a secret,” Mr Davis said.
“All we know is that the government paid $65m for the hotel and tens of million more in maintenance and operational costs.
“…It vindicates our recommendation that they ought not to have purchased the hotel, but rather they ought to have just funded the losses as they were doing, which was in the neighbourhood of about $1m per month, meaning that for over the past 24 to 30 months the most we would have funded would have been about $30m and so you will see the numbers.”
Mr Davis said the government needed to “come clean” on the deal.
When he spoke about the sale, Mr Cooper said he had concerns about the numbers that had been presented by the Minnis administration. He further questioned what officials had given to RCI and ITM in concessions.
“We’re happy for Grand Bahama,” Mr Cooper said, “Lord knows they need a break. They still have saltwater coming out of their taps that they are paying for. They have an electricity surcharge so any good news for Grand Bahama is a good thing.
“But I am concerned about the numbers. The government has been less than transparent. They paid $65m for a $40m appraised hotel. I estimate that they’ve spent more than $100m (and) now they are selling the property for $50m.
“In simple math that’s a loss of $50m, so that’s the first point,” he estimated.
“The second point that I want to examine is that the heads of agreement will lay out what rebates (and) what concessions the government has given, so $50m comes through the front door. I want to know what’s going through the back door?”
Mr Cooper continued: “I suspect that the number is significant in terms of actually hard currency payments back to the developer for whatever reason, but I expect that there will be some of those.
“I am concerned about the concessions that may not be in hard dollar terms, but generally we see a government desperate for good news and desperate people do desperate thing. Desperate people make bad deals.
“We see the government consistently made bad deals. We said it was a bad deal initially. They consistently make bad deals. They are desperate to give the people of Grand Bahama some hope and some relief.
“I hope that it’s real but I expect that when we look at the details of the heads of agreement we will be extremely disappointed by the deal that this government has cut.”
The PLP is also questioning whether this deal is tied to controversy surrounding a $2m Paradise Island project.
Toby Smith, principal of Paradise Island Lighthouse & Beach Club Company, told Tribune Business he was being “pushed into a corner” by the government following a Thursday night meeting at which he was urged to accept an “inferior” site for a development intended to provide jobs for 40 Bahamians.
He argued that his interests and plans, which he has pursued for eight years, are suddenly in danger of being sacrificed to ensure Royal Caribbean completes the Grand Lucayan resort’s purchase and redevelopment.
Through this Grand Bahama mega-investment, some 3,000 direct and indirect jobs would be created for Bahamians, according to Prime Minister Dr Hubert Minnis.