• Still among approvals awaited from govt
• Cruise giant willing to ‘co-exist’ with local
• PI project ‘magnet’ for passenger tripling
By NEIL HARTNELL
Tribune Business Editor
A senior Royal Caribbean executive has confirmed it has yet to secure a crown land lease for its $110m Paradise Island project as he indicated a willingness to “co-exist” with rival developers in that area.
Russell Benford, Royal Caribbean’s vice-president of government relations for the Americas, told Tribune Business that an executed lease was part of the approvals the cruise line is still seeking for a Royal Beach Club development it had hoped to begin construction on next month.
His admission raises further questions as to the fate of the crown land being sought by competing projects at Paradise Island’s Colonial Beach, with a rival developer having already initiated legal action seeking a Supreme Court declaration that he has a valid lease for some of the acreage also desired by Royal Caribbean.
“We do not,” Mr Benford replied, when asked by this newspaper if the cruise giant has a valid lease for seven to ten acres of crown land. “We purchased several acres and own that land. The crown land belongs to the government. We’re requesting approval of the crown land [lease] along with other project approvals, but have not received those yet.”
His comments will likely greatly encourage Toby Smith, the Bahamian entrepreneur behind the $2m Paradise Island Lighthouse & Beach Club Company proposal that is focused on Paradise Island’s western tip. He has been attempting for several months, without success, to obtain confirmation from both the government and Royal Caribbean as to whether the latter has a valid crown land lease.
The issue has also concerned government agencies. Rochelle Newbold, the Department of Environmental Planning and Protection’s (DEPP) director, in an April 1, 2021, memo to the Department of Physical Planning said she was in discussions with Royal Caribbean and its Bahamian environmental consultant to clarify whether the necessary approvals had been issued by the Prime Minister’s Office.
“Department of Environmental Planning and Protection has requested copies of the title deeds to land holdings conveyed to Royal Caribbean for the development of this project,” Mrs Newbold wrote.
“On March 31, 2020, Department of Environmental Planning and Protection was provided an 85-page document of title deeds and conveyances for various parcels on Paradise Island. Still outstanding is the letter of approval of leases awarded to the developed by the Office of the Prime Minister.”
Royal Caribbean has steadily amassed around 13.5 acres on Paradise Island’s western end by buying out private landowners in the area, but it is also seeking to lease some ten acres of crown land in the Colonial Beach area to complete its development.
This has brought it into potential conflict with Mr Smith, who is seeking himself to lease two crown land parcels at Paradise Island’s western end, one of which involves two acres around the lighthouse and another three acres for the “beach break” element of his own $2m project.
Mr Smith’s court action is alleging that he was granted a valid crown land lease over both parcels, including the lighthouse and the area at Colonial Beach for his “beach break” destination, which is now legally binding.
Mr Benford told Tribune Business he was “personally optimistic” that the rival developments could reach a compromise that would allow each to proceed, although he indicated that Mr Smith’s decision to initiate legal action against the Government could compromise any progress towards a solution.
“As with any problem it comes down to communication and collaboration,” he added. “If everyone is willing to find an answer to answer to the problem, I’m willing to do that. It’s complex. There’s a legal component, I believe, with different parties. As far as Royal Caribbean is concerned, any problems or issues that emerge, we’re open to finding a solution.
“I’m optimistic. Despite everything we’ve seen, it’s not impossible to find a solution to the set of circumstances that exists on Paradise Island. I don’t know how yet, but I’m optimistic. Out of all the 20 acres out there, hopefully we can all figure out a way to co-exist.”
This newspaper understands that Royal Caribbean has largely avoided directly engaging with Mr Smith to-date, instead directing him to speak to the Government as a means to resolve his concerns over a January 7, 2020, letter from Richard Hardy, acting director of Lands and Surveys, that was headlined “approval for crown land lease” over the two tracts he wanted.
Mr Smith previously told this newspaper he returned the lease, bearing his signature and other formalities, to the Government on January 9, 2020. However, the Government has to-date failed to apply its signature and execute the lease, with officials telling the entrepreneur that the document is now “not worth the paper it is written on”.
Mr Smith previously voiced fears that his project was being “marginalised” and treated like “a second class citizen” to make way for Royal Caribbean’s rival beach break destination, having queried how the cruise line’s site plan approval application could proceed to a public consultation given his live court challenge and in the seeming absence of a Crown Land lease.
Documents filed as part of Royal Caribbean’s planning application show that, just five days before Mr Hardy wrote his January 7 letter, Candia Ferguson, the Bahamas Investment Authority’s (BIA) director, wrote to the cruise line’s attorney, Campbell Cleare at McKinney, Bancroft & Hughes, confirming that the Government had approved granting it Crown Land “in the vicinity of Colonial Beach”.
The January 2, 2020, letter noted that the exact area to be leased to Royal Caribbean was to be determined and “subject to availability”. And, some six to seven weeks later, Joshua Sears, the Prime Minister’s senior policy advisor, told Royal Caribbean on February 26, 2020, that the National Economic Council (NEC) - really the Cabinet - had approved the grant of ten acres of Crown Land.
This all took place at exactly the same time as Mr Smith was desperately trying to get the Government to execute his rival lease, and Mr Sears’ letter referenced “the existing interest of two other parties” in the same land although it did not name them.
It is unclear why Royal Caribbean is seemingly being made to wait for its Crown Land lease and other approvals on a project that it hopes to open to passengers in January 2023. Some sources, though, have suggested the Government may be using its Royal Beach Club ambitions as leverage in negotiations to secure the Grand Lucayan’s sale to the cruise giant and its ITM Group partner.
A well-placed source, speaking on condition of anonymity, yesterday said Royal Caribbean was now seeking to pay the previously agreed $65m Grand Lucayan purchase price ($50m) net in instalments rather than in one lump sum upfront. And they added that the cruise line was not committing to anything when it came to the resort’s redevelopment and associated timelines.
Mr Benford, meanwhile, said the Royal Beach Club will be the key “stimulus” that drives the tripling of passengers brought to The Bahamas by Royal Caribbean over the next decade to 2030. “It’s incredibly important. It’s the stimulus for the growth; to go from 2m passengers a year to 6m a year is because of that Royal Beach Club,” he told Tribune Business.
“It’s incredibly important to us to provide a magnet or anchor for development. People, when they see this experience, will want to book cruises.... It attracts more and more people to The Bahamas because we will have a signature, iconic experience that enhances The Bahamas’ experience. We will market that to our database.
“The feeling was that, when we look at the guest projections, we were bringing so many more people over one time, we had to make sure there were additional options for them to do. I see it as all complementary to each other. This is an investment in The Bahamas, it’s an investment in Nassau. It’s an investment in downtown.”
Not all Bay Street merchants, restaurants, tour operators, transportation providers, straw vendors and other segments that rely on the cruise industry for their livelihoods are likely to view it that way, with many likely to perceive the Royal Beach Club as cannibalising and sucking post-COVID business away from their enterprises.
However, Mr Benford argued that the Royal Beach Club would only be able to accommodate just over one-third of the up to 15,000 passengers it can bring to Nassau on any one day because its capacity is being capped at 3,500 persons.
“The capacity of our smaller ships is larger than that,” he said. “We bring in two to three ships, with 15,000 guests a day. Our research has shown us that on average a guest will spend four hours per day at the Beach Club, but the ship will be there in port for eight to nine hours a day. So a guest will only spend a portion of their day at the Beach Club.
“Not as many guests disembark the ship as we’d like, and the Royal Beach Club will be a good catalyst for them to disembark the ship.” And, with passengers being ferried to the project from Prince George Wharf, Mr Benford said there was an opportunity to develop a water taxi system that could later transport them to the Arawak Cay Fish Fry or back to downtown Nassau.
“This is what the project has the ability to do: Maximise the opportunity,” he told Tribune Business. “Royal Beach Club is the nexus point of increased customer spend; that $1bn increase in spending and economic impact. Bahamians have the opportunity to take advantage of this massive economic impact to come, and it has the ability to be transformational.
“The Paradise Island project will double the number of Royal Caribbean visitors to Nassau, and we would be thrilled to partner with downtown business operators, merchants, restaurants, tours to sit around the table and figure out ways to create opportunities.
“Bringing millions of people to the business owner’s doorstep is not a bad thing. We need to figure out how to connect those businesses. If we can remove barriers and market those businesses directly to our guests, let’s sit down and figure out multiple ways to do that.”
Mr Benford said Royal Caribbean “can be as creative as you want” in doing this, using its apps, website and TV channels to market both downtown Nassau and its businesses, attractions and excursions to guests. He added that the Royal Beach Club would offer an “authentic Bahamian experience” at “every point of the way” by detailing the history of Junkanoo, as well as enabling passengers to interact with local artists and artisans.
The Royal Caribbean executive said the project will likely exceed its planned $110m investment budget, with $50m-$60m having already been spent on acquiring private land on Paradise Island from its owners. Some 200 construction jobs will be created, and a similar number of full and part-time staff will be required when the project opens, with the objective being to have a 100 percent Bahamian workforce by year five.
Mr Benford said Bahamians will also be able to enjoy the Royal Beach Club at lower price points than its passengers, and be able to access the facility whenever the ship is in port.