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Agreement for $100m sale of Grand Lucayan Resort

All smiles yesterday after the announcement. Photo: Vandyke Hepburn

All smiles yesterday after the announcement. Photo: Vandyke Hepburn

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Acting Prime Minister Chester Cooper speaking on Wednesday.

By DENISE MAYCOCK

Tribune Freeport Reporter

dmaycock@tribunemedia.net

ELECTRA America Hospitality Group has made a $100M purchase offer for the Grand Lucayan Resort at Grand Bahama.

Acting Prime Minister Chester Cooper, while making the highly anticipated announcement on Wednesday, said Lucayan Renewal Holdings Ltd entered an agreement for the sale of the entire hotel property to Electra America Hospitality Group, which is part of a US conglomerate Electra America, with worldwide assets worth $7B.

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The Grand Lucayan resort in Grand Bahama.

The agreement, Mr Cooper said, is subject to a 60-day due diligence period, with closing no later than 120 days.

According to Minister Cooper, Electra has committed to an estimated $300M renovation and construction plan to rebuild the Grand Lucayan into an environmentally sustainable, luxury resort.

Back in March 2019, Royal Caribbean International and the ITM Group signed a letter of intent for the purchase of the Grand Lucayan resort and redevelopment of the Freeport Harbour. An initial investment of $195 million, which includes $65m for the purchase of the hotel, was earmarked for the first phase of the development which was to have taken place over a 24-month period, under the previous Minnis administration.

In December, the Davis administration cancelled the deal, branding it a bad one.

About 80 percent of the 2,000 construction jobs will go to Bahamians. It is reported that 1,000 permanent jobs will be created.

The official announcement was made Wednesday in the hotel’s grand lobby at Manor House. Electra’s Principal and Managing Partner Russell Urban was present and brought remarks. Minister for Grand Bahama Ginger Moxey was also in attendance in addition to the Board of Lucayan Renewal Holdings Ltd.

The development plans include a Luxury Lifestyle Hotel with approximately 200 rooms and two-dozen villas at Lighthouse Pointe, a more than 500-room upscale convention centre, and an all-suite Family Resort with more than 200 condo-hotel style suites.

A refurbished golf course complemented by a new, upscale country club and golf villas also will be featured.

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Officials at the event for Wednesday's announcement.

Further, 11 world-class restaurants, 10 bars, a spa and fitness facility, amenities for children, event spaces, pools, and water features will be available to guests.

Mr Cooper said he expected the deal to be completed by this summer, with renovations and new construction to begin shortly after.

The project will be phased, and the hotel will remain open as the work progresses and continues. All renovations and construction are expected to be completed by January 1, 2025.

Mr Cooper said all the properties will have unique or internationally renowned luxury brands.

“We truly believe Electra will be good for Grand Bahama,” he said.

“Today is the beginning of the renaissance and rebirth of Grand Bahama Island. This is truly a new day for Grand Bahama,” he also said, adding Grand Bahama was on the path to become “Grand again.”

He noted that given the Dorian experience, LRH Ltd has agreed with the buyer to insure the facilitation of the first $10M of hurricane damage in the event of two named storms making landfall within the first five years of its ownership.

Also, as part of the purchase price, Mr Cooper said the company has pledged $5M to the Ministry for Grand Bahama’s new unit, ‘Collab Partnerships for Development” for community projects, and funding for Bahamians to create and grow businesses to enhance the tourism product, in conjunction with the Ministry of Tourism and the Tourism Development Corporation.

Electra has also committed to helping assist communities affected by Hurricane Dorian, he said.

Regarding the Grand Bahama airport, Minister Cooper said the government was aware that airlift was a critical component to the island. He noted that the government has committed to the process of rebuilding and reopening a world-class airport facility by 2025.

Absent from the announcement were members from the official Opposition, Free National Movement, and the Grand Bahama Port Authority. When asked by a reporter whether the official Opposition leader was invited, Minister Cooper said invitations were sent to them.

“We did advise the leader of the opposition and all the members of Parliament in relation to the announcement today, as well as the president of the GB Port Authority,” Mr Cooper said.

During his official remarks, Mr Cooper noted that when the former Minnis administration purchased the resort in August 2018, it made a series of mistakes that left taxpayers on the hook for hundreds of millions of dollars and an ongoing monthly subsidy of $1.5M per month.

“We always believed in the viability of the property, but did not believe it belonged in the hands of the government,” he said. Rather, we sought a buyer for the Grand Lucayan that was well resourced, well-intentioned, desired to be a strong community partner, a vision for the resort, and a willing partner in the shared vision for the growth of Grand Bahama.”

He further explained that: “With this sale, to a solid committed partner we will recoup a significant portion of the investment to people’s money and put Grand Bahama on track to once again be the vibrant entertainment capital of the Bahamas.”

Russell Urban, principal and managing partner of Electra, expressed his optimism about the success of the resort. “The resort is going to be successful; already the hospitality needed to make the resort successful is already in the DNA of the Bahamas – the people are so helpful, so friendly, so attentive, and passionate about their country, and the resort.”

“We became very interested in the resort for a lot of reasons, but the main reason is that we saw an opportunity to reinvent, and we saw this as a very unique opportunity in a world class location to create energy and to revive a community that has been so ravaged over recent years. So, we are very pleased and humbled to be chosen for this amazing opportunity,” he said.

Comments

tribanon 1 year, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

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KapunkleUp 1 year, 9 months ago

There's a sucker born every minute.

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Bonefishpete 1 year, 9 months ago

Bet $100 it doesn't make it past the due diligence.

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Baha10 1 year, 9 months ago

Hope this is “real” for sake of GB, but for now appears to be nothing more than a Very “odd” conditional offer to purchase that should not have been announced until “after” due diligence completed to ensure “binding” sale/purchase.

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TalRussell 1 year, 9 months ago

Today's Grand Lucayan announcement left void mention of Paradise Island's yet to be disclosed role in the Freeport deal. With its closing date's 120 days *still to clear the clouds. ― Yes?

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M0J0 1 year, 9 months ago

I say this, it is a much better deal and I hope it goes through, because Grand Bahama needs it badly.

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TimesUp 1 year, 9 months ago

I am so disappointed, we were told this was a rigorous process of selecting the best of the best out of dozens of offers. I expected a well known name brand with experience in hotel management, I hoped that the press conference would have included a team from the developer showing and explaining their vision, plans, drawings etc.

What we got was one guy that flew over to say a few words and a political rally.

Literally 10 minutes on google shows that this is a wealth management company listed on the Israeli stock exchange that invests primarily in apartments and then uses a subsidiary company to manage them as rentals. They dabble in old malls and hotels but their business revolves around buying to add value and not hotel management. A look into some of their property management reviews tells you all you need to know about their business ethics.

The 5 million “donation” and the political pandering was embarrassing. As is required, I wish and hope this is successful however I am tired of wishing and hoping.

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tribanon 1 year, 9 months ago

Chester the Jester thinks most of us don't know the difference between an informal offer or intent to purchase and a binding sale agreement. LMAO

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Flowing 1 year, 9 months ago

Can photos be captioned with names.

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Maximilianotto 1 year, 9 months ago

Better fully disclose the Electra deal. Nowhere $100,000,000 cash unless government refunds them $200,000,000 taxpayers (not government) money. Government is fiduciary trustee of Bahamian people and all taxpayers here. Should be reminded daily. Let’s follow up in 60 and 120 days.

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Maximilianotto 1 year, 9 months ago

With all respect - Israelis are EXCELLENT business negotiators. Won’t waste a penny unless get back 10 times.

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