The Tribune

• Nassau investors vital to build ‘critical mass’

• City’s infrastructure now at just 20% capacity

• Official ‘most confident about GB’ in 14 years

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FREEPORT needs Nassau-based investors to help build “critical mass” in a city “poised to be the fastest-growing economy in the Caribbean”, a Port Authority executive asserted yesterday.

Derek Newbold, the Grand Bahama Port Authority’s (GBPA) chief investment officer, told Tribune Business that its opening this week of a Nassau satellite office aims to capitalise on the momentum generated by Freeport’s $2bn investment pipeline through enticing entrepreneurs from elsewhere in The Bahamas to actively participate in the city’s anticipated expansion.

With Freeport’s infrastructure currently servicing just 20 percent of the 250,000 people it was designed to accommodate, he explained that the office will function as a first point- of-contact to help educate Nassau-based businesses on how The Bahamas’ second city functions and the tax benefits/concessions available to them under the Hawksbill Creek Agreement.

Agreeing that Freeport is “not fully understood by all” persons living outside Grand Bahama, Mr Newbold said encouraging investment and business start-ups from other islands - especially New Providence - would be of “mutual benefit” to all and work in The Bahamas’ overall favour.

Many observers have long held the view that getting Freeport’s economy moving is key to reducing population pressures and overcrowding on New Providence, and the GBPA executive told this newspaper that he is now “the most confident about the future prospects for Grand Bahama” than at any point in his 14-year career at the quasi-governmental authority.

Basing this on his close proximity to the multiple investment projects underway, or due to start, Mr Newbold said numerous entrepreneurial and business opportunities will flow from the combined five to six million cruise passengers that the Carnival and Royal Caribbean developments will attract to Grand Bahama annually.

“Freeport has come a long way since Hurricane Dorian,” he told Tribune Business. “Many of the projects we have been working on for years are coming to fruition. We have more than $2bn in investments underway or about to commence construction later this year.

“We want to make sure all Bahamians and residents, especially those in Nassau because it’s the capital; because there’s access there to a lot of resources, and they have the skills, expertise and financial talent, we want to make sure those people know what’s happening in Freeport and help us to grow the city because there’s going to be a lot of increased demand.”

With Carnival’s expanded $600m cruise port investment, Celebration Key, set to bring four million extra passengers to Grand Bahama by 2028, and the Royal Caribbean-led Freeport Harbour revamp generating a further 1.5m additional arrivals, Mr Newbold said these two projects alone will provide a huge customer base for new and existing Bahamian businesses.

“We’re also in the pro- cess of negotiating a deal with Royal Caribbean and some of its partners to upgrade the existing harbour,” he confirmed. “Once that deal is complete, Royal Caribbean and they have committed to another 250 cruise calls that will bring 1.5m passengers per year.

“You couple that with what’s happening in the east with Carnival, and Freeport is going to see in the region of five to six million cruise passengers a year. That is going to create significant entrepreneurial opportunities for Bahamians - more demand for shore excursions, capacity building for existing shore excursions, and opportunities in retail, food and beverage and entertainment.

“We’re really excited about what’s happening in Freeport, and want to make sure Bahamians from all walks of life are fully apprised of what’s happen- ing. We welcome them to be participants in Freeport, which I believe will be the most robust and fastest- growing economy in the Caribbean in the next few years.”

Many Freeport residents have adopted an attitude that they will only believe in the city’s economic revival when they can touch and feel it, having grown weary with numerous false dawns in the past. However, Mr Newbold told Tribune Business he can say “with absolute confidence” that the city is now poised to start fulfilling its much and long talked-about potential.

“Since I joined the Port Authority, since I’ve been sitting in this seat, this is the most confident I’ve been about the future prospects for Freeport and Grand Bahama since I’ve been at the Port Authority,” he added of his 14-year tenure.

“The reason I’m able to say that is I’m close to a number of these projects, and I know with absolute certainty these projects are happening.... We’ve been close to this point in the past; actually, twice. The last time we were here, 2016, we were getting ready to make a number of major announcements and Hurricane Matthew showed up. We had to shift our focus to hurricane recovery from economic recovery.

“Three years later we started to build the economy again, got to the precipice, and in 2019 we had Hurricane Dorian. That knocked us way back. We had to shelve a number of projects we were working on. A number of construction projects were shelved by investors because Freeport was seen as a high-risk jurisdiction; everyone was waiting to see what would happen,” Mr Newbold continued.

“We stayed in touch with those companies, we kept calling, meeting with them on a consistent basis, apprising them of our progress, and a number of them have come back. They’re now moving forward which is a good thing.”

Besides the cruise lines, Grand Bahama Shipyard has also initiated its $600m investment in two new dry docks, and other projects currently underway include Doctors Hospital’s new medical facility; the Western Atlantic University School of Medicine expansion; the Heroic Group’s new concrete plant; and the $12m investment in downtown Freeport by Milo B Butler & Sons.

The GBPA and its affiliate, Grand Bahama Development Company (DevCO), are now seeking to capitalise on this activity by attracting further investment from Bahamian entrepreneurs in Nassau and elsewhere to keep the momentum going. The new Nassau office, located in the ACCESS co-worker suites building at One West Plaza on Windsor Road, is designed to provide a focal point for this.

“This has been something we’ve been thinking about for a while, so we just made a decision to actually move forward,” Mr Newbold explained. “We’re going to start out with a satellite facility and, right now, we’re probably looking at one staff member to run the office and, as demand grows, we will scale up the services.

“But we’ll have executives flying in, back and forth, to facilitate meetings and consultations. When we thought about it we said Nassau is the financial and business hub of The Bahamas. It’s home to a number of stakeholders critically important to the success of this country.

“We’ve noticed in recent years, and in particular the past two years we’ve received increased interest from entrepreneurs and businesses in Nassau. We felt it was time to establish a business office in Nassau to educate the business community on opportunities in Freeport,” he added.

“We’ll be facilitating one-on-one meetings on investment opportunities, how to establish a business in Freeport and how people can take advantage of the incredible land offerings for residential and commercial development.”

Asked whether Freeport was fully, and properly, understood by those residing elsewhere in The Bahamas, Mr Newbold replied: “You’re absolutely correct. A big part of this campaign is really to educate the business community on Freeport; the way the city functions so they clearly understand the Hawksbill Creek Agreement.

“A lot of people have this concept or perception that Freeport is only for foreign investors when, in actuality, more than 90 percent of our licensees and businesses conducting operations in Freeport are Bahamian-owned.

“It’s important for Bahamians to understand the incentives and benefits created by virtue of the Hawksbill Creek Agreement; that they have access to those and can benefit from those just like any other business coming to Freeport. I think it’s not fully understood by all persons,” he added.

“Interest has been growing from the Nassau market. In fact, we have at least two particular investments currently underway from entrepreneurs based in Nassau. The interest level has been growing. The more people hear about what is happening in Freeport, people are inquiring and finding out how they can participate in Freeport.”

Attracting investment and workers from elsewhere in The Bahamas is critical to Freeport’s prospects of creating critical population and economic mass. “We know Freeport has the infrastructure to comfortably accommodate a population of about 250,000 people,” Mr Newbold told Tribune Business.

“Right now, we are only at roughly 20 percent of that capacity. Being able to attract Nassauvians or other Bahamians to Freeport will help us to create the critical mass we so need. Entrepreneurial opportunities, employment, come to Freeport, start a business, purchase some land, build a home. It’s just going to be great all around and will be of mutual benefit for us and Nassau.”