The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Grand Bahama Port Authority (GBPA) executive yesterday sought to refute assertions that “hundreds of businesses are closing every year in Freeport” by pointing to a near-20 percent increase in licensees since Hurricane Dorian.

Derek Newbold, the quasi-governmental authority’s chief investment officer, told the Grand Bahama Business Outlook conference that business licensees registered with the GBPA had increased from 2,872 pre-Dorian to some 3,400 today.

While not providing details on the increase, he added that the GBPA is trying to diversify the economy away from “over saturated” industries by giving entrepreneurs up to a 70 percent discount on their first-year licence fee if they start a business outside these markets.

Responding to the claims of mass business closures in Freeport’s already-troubled economy, Mr Newbold said: “There are three major factors that have negatively impacted the business community over the past six years. One is that we didn’t expect the catastrophic hurricanes we’ve had over that period.

“Two, we had a global pandemic to back that, which significantly decimated the business sector, especially the small business sector, and three, there’s been over-saturation in certain business categories in terms of certain business operations.

“When we conducted a survey of licensees in the aftermath of Dorian, 70 percent of licensees disclosed they did not have insurance or sufficient insurance. That will have led to a number of those having to close their doors as a result of not having coverage to cover costs associated with the damage from Dorian,” Mr Newbold continued.

“On the heels of that we were faced with a pandemic. For the first 16 months of the pandemic, most businesses in terms of operations came to a standstill and a number of business owners were faced with the burden of having to fund ongoing expenses.

“We live in a free market system, and that system has led to over-saturation in certain categories. That saturation has been unsustainable for certain businesses. We don’t want to stifle the entrepreneurial spirit of Bahamians, so to encourage diversification we introduced a business licence diversity waiver,” he said.

“A first year licence is discounted by up to 70 percent if they fall outside such categories. Grand Bahamians are the most resilient people, I think, and we’re getting a number of licence applications for new innovative and creative businesses.

“Going into Hurricane Dorian, we had 2,872 licensees. Today, our total licensee count stands at 3,400. That’s an increase of 20 percent [18 percent, sic] in new businesses over the past three years, so we’ll simply let the facts speak for themselves.”

Such statistics are likely to be greeted with scepticism by some observers given that Freeport’s economy has largely been viewed as shrinking for the past 18 years - a trend thought to have been made worse by the devastating blows inflicted on the island by Hurricane Dorian and COVID-19.

“After Dorian hit, investor confidence was not where anyone would like it to be, but that was understandable given the circumstances,” Mr Newbold said. “To rebuild confidence we spent a great deal of time speaking to investors, communicating with investors on a regular basis.

“Investors in an advanced stage of the project cycle were having second thoughts about moving forward. Where are we now? Far different from where we were in 2019. As the deputy prime minister said, there’s now evidence of renewed interest in Freeport from investors and we certainly expect that trend to continue.”

Recalling the hurricane’s aftermath, Mr Newbold added: “Immediately following Dorian we conducted an assessment of the business community, dispatching teams to do site visits and meet with business owners. What we discovered was heart-wrenching. Seventy percent of businesses surveyed did not have insurance or sufficient insurance to cover their losses.

“One of the immediate needs was access to capital. We were stirred into action to develop funding and grant programmes in conjunction with our local and international partners.” This, the GBPA executive added, produced a collective 400 grants worth $3m to Grand Bahama businesses in the storm’s immediate aftermath.

Mr Newbold said Royal Caribbean’s negotiations with Freeport Harbour Company (the GBPA and Hutchison Whampoa) for a cruise berth expansion and adventure-based water theme park were “at the final completion stage”. He also touted investments by Bahama Minerals, a PVC pipe manufacturer, and wealth management and oil and gas firms with Grand Bahama expansion plans.

“We have just approved terms for a multi-purpose business centre to be established downtown,” Mr Newbold said. “We have just agreed terms on a critical piece of the Port Lucaya Marina and Resort deal. This project will be transformational for Port Lucaya and Freeport in general.”

Approvals for Weller Development’s mixed-use resort and residential project at Discovery Bay are also being processed, while the full build-out for Western Atlantic University School of Medicine’s campus is pegged at $200m.

Elsewhere, Ginger Moxey, minister for Grand Bahama, referred to a $450m investment by Grand Agri-Haven that had been approved for eastern Lucaya although no details were provided at yesterday’s conference.