The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Freeport lacks the size and critical mass to “efficiently support” developments such as the $600m Grand Bahama Shipyard dry dock replacement, a prominent hotelier asserted yesterday, as he urged: “We need stopover tourists back.”

Magnus Alnebeck, the Pelican Bay resort’s general manager, told Tribune Business that the Shipyard’s imminent expansion - which will require the frequent movement of skilled expatriate personnel into and out of Grand Bahama - was another factor making the Grand Lucayan’s sale and redevelopment all the more urgent.

Explaining that the Shipyard alternates between generating “peaks and valleys” in business flows, which are tied to when it has a vessel in dry dock, he added that Freeport and Grand Bahama need to revive their stopover tourism business to create a more consistent, steady “customer base”.

The Grand Lucayan’s closure, in anticipation that its sale to Concord Wilshire would have closed by now, means Freeport has lost hundreds of hotel rooms and has minimal inventory to accommodate stopover visitors. Mr Alnebeck told this newspaper that, as a result, when the Shipyard has vessels in dry docks the influx of expatriate worker can be “overpowering” for a destination that has lost population, amenity and infrastructure scale.

Tribune Business sources, speaking on condition of anonymity, yesterday signalled that the Grand Lucayan sale negotiations have reached an extremely delicate and sensitive stage. After suggesting just days ago that the talks between the Government and Concord Wilshire, the Miami-headquartered developer, were “critical” and could fall apart, they yesterday asserted that the deal is “back on track” but gave no details.

This comes just days after it emerged that the Grand Lucayan’s line staff had nor received their weekly pay that was due on both December 5 and December 12. Tribune Business also reported on Monday that the resort’s water supply has been cut-off due to unpaid bills, said to be worth between $900,000 and $1m, that are owed to Grand Bahama Utility Company, which is owned by Grand Bahama Port Authority (GBPA) affiliate, Port Group Ltd.

Mr Alnebeck, asserting that the Grand Lucayan’s revival is critical recovering a “tourist base”, told Tribune Business that Freeport now struggles to cope with the Shipyard’s “peaks and valleys” because it lacks sufficient critical mass to properly support an operation of that size.

“There is no question in my mind that the Shipyard is a fantastic company to have in Grand Bahama, but we don’t have the size any more to support that kind of place in an efficient way,” he explained. “I don’t only mean airlift, but also hotel rooms, rental cars and grocery stores.

“When a dry dock comes in, it becomes overpowering with so many people in the destination for a pretty short time. It’s [the Shipyard] a type of business that has a lot of peaks and valleys. Imagine running a restaurant that has 100 seats, and it does 100 on one night but just eight the next night. It’s not that easy to staff up and get going.

“That’s a bit of a problem for Grand Bahama at the moment. We don’t have the tourist base to give us a consistent base. We only have corporate business that comes and goes in peaks and valleys with ships and dry docks,” Mr Alnebeck added.

“We have had complaints that there are not enough taxis at the airport. We need tourists back in Grand Bahama. We need the Grand Lucayan started, and hopefully coming online, so we can get a tourist base.” The Pelican Bay chief said he was unaware of the Concord Wilshire deal’s status, and added: “To me, it seems very confusing.

“It’s not good, and especially in the area where Pelican Bay is, it feels like we are the only place open at the end of a derelict street because you have to drive past the Grand Lucayan to get to Pelican Bay, and it doesn’t feel very inviting to come to that area of Freeport any more. Entrances are blocked off and no work is going on any more.”

Should the Concord Wilshire purchase close, the Grand Lucayan’s revival and opening of rooms to tourists is unlikely to be swift, given the developer’s plans to demolish virtually the entire property to make way for its $827m investment. Michael Scott, former chairman of Lucayan Renewal Holdings, the Government-owned special purpose vehicle (SPV), when it acquired the Grand Lucayan under the Minnis administration, confirmed that demolition is likely.

Asserting that he is “very sceptical” over whether the Concord Wilshire deal will close, given the uncertainty that has dogged it ever since the May 2025 Heads of Agreement signing was lauded with much fanfare by the Davis administration, he added that recent developments have come as no surprise.

“Everything I said and predicted is coming true in that there is no sale,” Mr Scott told Tribune Business. “The sale is on again, off again, and nothing seems to be happening with Grand Bahama International Airport. They [the Progressive Liberal Party] were very quick to criticise myself and my Board, but in four going on five years, they’ve done nothing and nothing from nothing equals nothing.

“The only way this is going to work is there needs to be an arrangement for the complete overhaul and restoration of Grand Bahama International Airport.” Mr Scott argued that without the return of US pre-clearance, and an airport capable of efficiently handling the passenger volumes Concord Wilshire requires, the Grand Lucayan will be unable to generate the revenue the developer requires to earn a return on its investment.

As a result, he added that it was not surprising that Concord Wilshire - which will have to rebuild stopover tourism in Freeport from zero - is likely seeking to transfer as much risk as possible to the Government via tax breaks, investment incentives and guarantees to secure its financial model.

“I don’t know anything about this group, but if they are commercial operators they are not going to be serious about any arrangement, nor are they going to invest any serious amount of capital, without revenue streams to recoup their investment. That’s just simple economics,” Mr Scott said.

“I can tell you the physical condition of that hotel has not improved in the last four to five years, and it virtually requires demolition and reconstruction. The most valuable aspect of all of that is the property and it’s location.” Multiple attempts by the Government to offload the Grand Lucayan, which it acquired for $65m in September 2018 to prevent Hutchison Whampoa’s real estate arm from closing it, have foundered.

The Minnis administration’s bid to sell it to Royal Caribbean Cruise Lines and its Mexican partner, ITM Group, largely foundered due to COVID-19, while the Davis administration’s deal with Electra America Hospitality also failed to progress beyond the initial stages. “I feel very badly for the people of Grand Bahama - they have suffered, suffered, suffered,” Mr Scott told Tribune Business.

“We would have had a deal with Royal Caribbean and the Mexican group but for the COVID pandemic. But for the pandemic, but for the shutdown that lasted over a year, we would have had a deal. That is the closest either government has gotten to a deal, a real deal, and I emphasise the word ‘real’.”

Mr Scott reiterated that the Davis administration had been premature in unveiling the Concord Wilshire announcement, and said: “They were desperate to get something. They were desperate to show that after all that criticism heaped on the FNM that they were doing something. They were desperate to show that, after three years, they were doing something, but all that was very premature and, quite frankly, I’m very sceptical as to whether it will come to pass.”

Tribune Business understands that Prime Minister Philip Davis KC and the Government are pushing to close negotiations, and complete the sale, to Concord Wilshire so that he can include the Grand Lucayan among a series of announcements concerning major Grand Bahama-based development projects early in the New Year.

This newspaper also understands that the conveyances, transferring title and ownership of the Grand Lucayan from the Government’s special purpose vehicle (SPV), Lucayan Renewal Holdings, to Concord Wilshire’s own Bahamian-domiciled entity, were completed prior to the much-touted Heads of Agreement signing in May 2025.

It is thought that the resort’s acquisition has been structured as a so-called “take-down purchase”, meaning the $120m sales price will be paid in phases by Concord Wilshire. As the developer demolishes each new part of the existing Grand Lucayan, a new portion of the purchase price will be paid to the Government. The $120m has not been paid yet.

Tribune Business sources, speaking on condition of anonymity, had suggested the developer is hoping to take possession of the Grand Lucayan from the Government imminently. The property is presently closed to paying guests, and the handover has taken longer than anticipated due to the ongoing negotiations with the Davis administration to resolve elements of the deal deemed critical to Concord Wilshire and its partners.

This newspaper understands that there has been some reluctance by the Government to grant all the tax breaks and other investment incentives that the developer is seeking. Concord Wilshire is thought to be arguing that it needs significant concessions given that it is trying to revive a stopover tourism market that sources say is “100 percent dead”, but the Government’s concern is understood to be that it would have to give the same tax breaks to other major investors such as Atlantis and Baha Mar, which have ‘most favoured nation’ clauses in their own Heads of Agreement that state they are to be treated no less favourably than other resort investors.