The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Dr Hubert Minnis yesterday tacitly admitted that the effective 150-year Crown Land lease granted to Royal Caribbean on Paradise Island was too long as he sought to defend the deal.

The former prime minister argued that “the benefits certainly outweigh” the relatively minimal rental rates that the cruise giant agreed to pay his administration for the right to use seven Crown Land acres, plus three seabed acres, after the deals first exposed by Tribune Business came under attack in the House of Assembly.

He spoke out after Leslia Miller-Brice, the Sea Breeze MP and ambassador to CARICOM, slammed the two lease arrangements as “the height of irresponsibility and disrespect for the Bahamian people”. She likened the Royal Caribbean agreements to “selling our souls and selling our birthright”, and said: “There are many Bahamians that are livid about these land deals.”

“When we see deals such as this we have to be angry,” Mrs Brice-Miller continued, adding that the lease terms had “robbed the Bahamian people blind”. Royal Caribbean is paying $14,000 per annum (VAT exclusive) to lease seven acres of Crown Land on Paradise Island, a rate of $20,000 per acre. Yet the seabed rental rate is equal to $1,000 per acre per annum, or $3,000 total. 

The terms for both include an original 25-year lease; an initial 25-year renewal and “no less than four additional options” for further renewals - each up to 25 years. This gives Royal Caribbean effective possession of both the land and seabed Crown Land parcels for a 150-year term if it so desires, with the only stipulation being that it must comply with all conditions and renewal deadlines.”

Hinting that he was having second thoughts about the length of both leases, which he signed as then-minister responsible for Crown Lands, Dr Minnis said: “I agree that the standard lease time is 100 years. I accept that, and I am certain Royal Caribbean will have no problem reverting from 150 to 100 years”. That, effectively, is an invitation for the new administration to renegotiate.

However, he argued that the Crown Land leases to Royal Caribbean were in The Bahamas’ economic interests because of the additional jobs and investment its proposed Royal Beach Club project will trigger, as well as an increase in cruise passengers visiting Nassau and the wider country.

“It has always been the Government’s policy that we do not sell Crown Land to foreigners or grant Crown Land to foreigners,” Dr Minnis said in response to Mrs Miller-Brice during yesterday’s supplemental Budget debate in the House of Assembly. 

“We look at the global picture as to the advantage of leasing Crown Land to foreign nationals. Rather than one or two individuals benefiting, the Government looks at the global picture to ensure that the whole nation benefits.”

Confirming the lease details revealed by Tribune Business, the ex-prime minister argued: “The benefits certainly outweigh the leasing of the property. Royal Caribbean would embark on a $55m investment on that particular property and, in fact, they are even increasing that. There will be many jobs created for Bahamians, and all investment on that property will be run by Bahamians.

“Royal Caribbean will assist with funding to help Bahamians get involved.” Dr Minnis said the project was forecast to create 80 Bahamian construction jobs, and between 150-200 full-time posts with an average salary of $30,000 to $40,000 per annum.

“Most importantly, Royal Caribbean presently brings about 1.2m tourists to The Bahamas,” he added. “With this project, the numbers will increase to the benefit of all Bahamians, especially in the hospitality and tourism industry.”

Dr Minnis said the cruise giant will also engage with Bahamians so that the latter could operate, “and possibly own”, the water taxis/ferry that will transport its passengers between the Nassau Cruise Port and Royal Beach Club.

He added that Royal Caribbean will ensure that the ferry boats involved are brought up to International Maritime Organisation (IMO) standards and certification, and said: “This would create vast entrepreneurship and wealth for Bahamians as opposed to one individual, and I won’t get into that at this particular time, but the decision was Bahamians at large would be involved as opposed to one or two individuals.”

James Boink, Royal Caribbean’s vice-president of private destinations, told a virtual meeting held by the Department of Environmental Planning and Protection (DEPP) earlier this year that just one-third of its passengers will go to the Royal Beach Club, which is designed to drive additional visitors to this nation and get them off the ship to spend more money in the destination.

This will in theory leave two-thirds of Royal Caribbean’s passengers free to patronise local businesses, but those sectors that rely on the cruise industry - especially Bay Street and downtown Nassau - will likely be deeply sceptical about this.

A well-placed source familiar with the Minnis administration’s Crown Land dealings on Paradise Island, speaking on condition of anonymity, backed the former prime minister by arguing that Bahamians needed to focus on the bigger picture - and increased future tax earnings and economic impact - rather than just the pure lease terms.

Asserting that too many were missing the forest for the trees, they said of current debate: “You’re all missing the point. It’s not taking into consideration the most attractive thing about all this, which is that it anchors Royal Caribbean in the port of Nassau. It gives them a major incentive to bring hundreds of thousands of people to this destination.”

Pointing out that “not every single person is going to go to that attraction”, the source said that, based on 3,000 passengers being charged $150 to go to the Royal Beach Club on 300 days per year, the Government would earn $13.5m per annum in VAT at 10 percent on $135m in sales revenue. “You’re going to have recurring revenue ever year just for the Treasury,” they added.

“I agree that the 150-year lease is too long and should be negotiated down, but don’t get locked into the $140,000..... There’s no argument that 150 years is outrageous, but it locks them into coming into the destination.”

But Toby Smith, the Bahamian entrepreneur behind the neighbouring $2m Paradise Island Lighthouse & Beach Club project, who is asserting his claim to three of the seven Crown Land acres subject to Royal Caribbean’s lease, yesterday blasted the former prime minister for agreeing terms that “give away the kitchen sink”.

Arguing that Bahamians “again will only receive a pittance of bread crumbs”, Mr Smith slammed: “The Bahamian public have demonstrated that the ex-prime minister does not represent right-thinking Bahamians looking out for the better good of the country.

“He’s lost the leadership of the country, the leadership of his party, and he should read the sign on the walls by stepping down.... Lions don’t listen to the voice of sheep. Bahamians should be appalled that we had such a weak negotiator giving away the country and the kitchen sink, demonstrating again that he’s throwing the baby with the bath water.”