The Tribune

• BREA chief fears locals ‘sidelined’ by use of foreign firm

• Urges ‘full transparency’ on any Bahamian participation

• March 2 deadline for Lucayan bidders to submit offers

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas Real Estate Association’s (BREA) president yesterday said it was “very sad and disheartening” that the Government had seemingly “sidelined” the sector on the Grand Lucayan sale.

Christine Wallace-Whitfield told Tribune Business that the Davis administration needed to provide full transparency and disclose whether Toronto-headquartered Colliers International is working alone or if it has partnered with a local realtor to facilitate the latest attempt to sell the Government-owned resort.

She added that the Government’s continued reliance on an overseas realtor to sell its troubled Grand Bahama-based property was “not fair” to the Bahamian real estate industry, as it was being potentially cut out of a significant multi-million dollar commission that will not be retained within the local economy.

“That’s very disheartening. It’s very sad,” Mrs Wallace-Whitfield said of the possibility that Colliers was not working through a Bahamian affiliate. “We need full transparency. We have to abide by the rules and regulations, and we have to put our people first, Bahamians first.”

The BREA chief was backed by Mario Carey, the Better Homes and Gardens Real Estate MCR Group’s principal, who described Colliers’ appointment as “another insult” to Bahamian professionals given that the real estate industry was supposedly reserved for Bahamians only plus permanent residents with the right to work.

Arguing that the Government was “making their own rules”, as well as “bypassing” the industry’s efforts at self-regulation and the Real Estate (Broker and Salesmen) Act 1995, Mr Carey contrasted the Grand Lucayan situation with how he is working with Miami-based CBRE on marketing and selling the former Ginn project in Grand Bahama’s West End. He added that the US realtor “goes through me and uses my licence”.

Mrs Wallace-Whitfield and BREA previously raised similar concerns when the Minnis administration hired Colliers back in 2018 for exactly the same purposes. But Michael Scott QC, the then-Grand Lucayan’s chairman, rejected those complaints by asserting that Colliers was working with a Bahamian realtor, Sterling Bahamas Realty.

However, there was no confirmation from the Government yesterday as to whether this partnership was still in existence or if the Canadian-based firm was working alone or with another local operator.

Both Mr Carey and Mrs Wallace-Whitfield spoke out after Chester Cooper, deputy prime minister and minister of tourism, investments and aviation, confirmed that the Grand Lucayan’s Board had followed the former Minnis administration’s lead in hiring Colliers to oversee the resort’s sales process.

Mr Cooper revealed that 5pm on Wednesday, March 2, 2022, is the deadline by which all bids to acquire the Grand Lucayan must be received. Colliers has been re-hired to run the new sales process, market the resort to potential purchasers and vet incoming offers, performing the same functions for the last administration which ultimately went with the ITM Group/Royal Caribbean bid.

The Davis administration has elected not to proceed with that deal, resulting in the Grand Lucayan being placed back on the market once again. Mr Cooper said the Board of Lucayan Renewal Holdings, the special purpose vehicle (SPV) created to hold the resort for the Government, had received “seven serious inquiries” so far from potential purchasers.

“To save the resort and to expedite the sale with the best possible terms, the board of Lucayan Renewal Holdings, the special purpose vehicle created to facilitate the sale of the resort, has engaged the services of Colliers International, a world-renowned real estate company with a vast professional network that is accustomed to handling large scale, high-end real estate transactions,” he said.

“Much of the Bahamians people’s hard-earned tax dollars have been invested in this resort. We will not tarry in causing there to be as swift as possible a transaction on the best terms possible to bring this investment along.

“We advised the former administration against the purchase of this resort, but in governance you are played the hand you are dealt and not the one you wish you had,” Mr Cooper continued.

“Therefore, companies interested in purchasing the resort will at a minimum be required to provide proof of funding and a vision and a plan to restore and revolutionise the island of Grand Bahama, with a shared vision for the growth and development of the island.”

Once the bids come in, Mr Cooper said: “Offers will be subjected to rigorous due diligence to be vetted by colleagues on the board of Lucayan Renewal Holdings, and we are seeking partners that plan to invest heavily in the property and in the island of Grand Bahama.”

“We have seen about seven serious inquiries about the property, and we are cautiously optimistic that this process will help us to advance this matter as swiftly as possible. We are encouraging the participation of Bahamian investors and bidders in this process, and encourage them to engage actively in this process.”

Colliers will likely have been selected due to its familiarity with the Grand Lucayan as well as the wider Bahamas, as well as its global reach and contacts with prospective purchasers. It was hired to broker Baha Mar’s sale in 2015-2016, and also fulfilled the same role in 2014 over the British Colonial Hilton’s sale to China Construction America (CCA).

“I don’t understand why we have to get an international firm,” Mrs Wallace-Whitfield said yesterday. “There’s no reason why we should be searching outside the country for a foreign entity.

“I have a problem with that. I’d love to know what the reason is. It’s not fair. We can’t do this in somebody else’s country. If we’re going to advertise or do something in a foreign country we have to make sure we seek out a company or affiliate in that country to work through.

“So when somebody comes to The Bahamas, whether it’s through the Government or whoever, they should seek out a Bahamian company, and if they want to be specific and have an international focus they can seek out a company with that affiliation. I don’t know if this company is affiliated with a local Bahamian group, but they need to be transparent, advise and let us know.”

The BREA president pointed out that Bahamian real estate firms had the required global reach to sell a resort such as the Grand Lucayan via their affiliations with networks such as Sotheby’s International Realty, Coldwell Banker, Better Gardens and Homes, Berkshire Hathaway and Corcoran.

Tribune Business was told by well-placed sources, speaking on condition of anonymity, that the Government - through the Hotel Corporation - had sent out its request for appraisals of the Grand Lucayan’s value solely to non-Bahamian firms even though the law mandates that such work is exclusively reserved for licensed locals.

Government officials did not return calls seeking comment before press time last night, so this could not be confirmed. However, Mr Carey told this newspaper: “Here we go again. Another insult. I’m not too sure how Colliers get to operate here, and what licence they are using. There has to be a licence granted to operate in The Bahamas because it’s reserved for Bahamians only.

“Why don’t they use Bahamian realtors? I guess they [the Government] have a right to do that. When we have over 1,000 trained agents paying rent, paying VAT, paying insurance, paying annual dues to be licensed in this country, and doing everything right, and government bypasses all of it.”

Mr Carey said a 2 percent commission on the Grand Lucayan’s sale would be equivalent to $3m if the Government’s target $150m purchase price is achieved. “These guys literally make their own rules,” he added of the Government. “They don’t care we have a real estate industry, don’t care we have a Real Estate Act. They do what they want to do.”

Colliers’ Nassau-based Caribbean point-man is Gerhard Beukes, former head of Renew Bahamas, the company that secured an agreement with the last Christie administration to manage the New Providence landfill. Renew cited “force majeure” conditions as its rationale for walking away from that contract in 2016 prior to Hurricane Matthew, sparking an arbitration battle with government.

Prior to that, Mr Beukes oversaw the British Colonial Hilton’s sale to China Construction America (CCA) in 2014 on behalf of its former private equity owner. And, after the landfill venture did not succeed, he came full circle and worked for CCA as vice-president of investments and asset management for the South America and Caribbean region prior to joining Colliers.

Mr Beukes could not be reached for comment before press time last night despite Tribune Business leaving calls and messages on his phone.