'Revisions' Sought To Grand Lucayan Deal
The Tribune By NEIL HARTNELL June 2,2020
Tribune Business Editor
A Cabinet minister yesterday said “it’s full steam ahead” on the Grand Lucayan’s redevelopment even though the ITM/Royal Caribbean joint venture is seeking “certain proposed revisions” to the deal.
#Dionisio D’Aguilar, minister of tourism and aviation, told Tribune Business “there’s nothing significant” other than the duo’s Holistica partnership moving to adjust construction schedules and timetables - which he conceded could be pushed back by up to six months due to the fall-out from the COVID-19 pandemic.
#However, Michael Scott, the Hotel Corporation’s chairman, revealed to this newspaper that Holistica last week suggested several changes to the $300m project involving the Grand Lucayan’s acquisition and redevelopment of Freeport Harbour’s cruise port when it and the government’s representatives met by video conference.
#Declining to reveal what the proposed changes are because the matter is now being assessed by the government, Mr Scott denied that Holistica had sought an extension to the deal’s closing as suggested by several Tribune Business sources close to developments.
#The attorney, who also chairs the Government-appointed Lucayan Renewal Holdings Board that oversees the resort, added that Holistica and its ITM/Royal Caribbean backers remained “resolute and steadfast” behind the project and their investment despite the cruise industry’s worldwide shutdown since mid-March.
#He added that they were “entrenched” in their belief in the project, especially since Freeport’s proximity to Florida’s major cruise ports had only increased its - and The Bahamas - strategic importance to the cruise industry’s revitalisation once the COVID-19 shutdown ends.
#“They’ve made certain proposed revisions which the government is considering, and I can’t say any more,” Mr Scott said of Holistica and its investors. “The project is still very much a go. There may be some slight delays in timelines, and some relaxation in timelines, and delays in construction.
#“I don’t want to trespass into the substance of what was discussed, but I don’t think there’ll be any delay in completion of the deal. There may be a delay in construction and remediation work, and demolition, and construction of new buildings and facilities. I don’t think there’ll be any real or significant delays in completion of the purchase.”
#Underscoring the strategic value of Freeport and the project to the cruise ships, he added: “We’re very much on track, and the investment is still very much in play. They [Holistica and ITM/Royal Caribbean] are resolute and steadfast. They are entrenched in the view that it is a good project. There are more pluses than negatives. It’s just going to take time for the hotel industry and the cruise industry to recover from the global lockdown.
#“As a project there is much to commend it, particularly in the short-term, because how else do you crystallise and resuscitate confidence in the cruise industry. In the first instance you’re doing short-hop cruises between Florida and Freeport and Nassau to instill that necessary measure of confidence, which supports more extensive trips by the aficionados and devotees of cruise trips. You’ve got to prove you can successfully navigate that before starting to market long-term cruises.”
#Mr D’Aguilar, meanwhile, said he was unaware of whether ITM/Royal Caribbean and Holistica has asked for an extension on the 90-day deadline to complete the resort’s purchase or not. However, he suggested it would not have been an unwarranted or unreasonable request for them to have done so given the disruption caused by the COVID-19 pandemic that has consumed both sides’ attention.
#“I don’t think there’s anything of significance other than timing issues given the reality on the ground,” the minister added. “The whole COVID-19 pandemic has kind of thrown everything back, so people are adjusting schedules and timelines to the fact they have been probably pushed back six months.
#“There’s nothing significant other than some timelines. I’m delighted they’re moving forward, and moving ahead with this investment and getting it underway. Most projects would have had a very aggressive timeline prior to this COVID-19 outbreak.
#‘Now, everybody has been thrown off by this delay and how governments and corporations are not fully operational, and that has delayed the ability to make decisions and caused further delays. It’s hard to get people to make the required decisions but, as far as I’m concerned, it’s full steam ahead.”
#Mr Scott, meanwhile, said the Grand Lucayan redevelopment remained vital to Freeport’s economic future. “We need to do something to take it off life support, don’t we?” he said.
#The Hotel Corporation chairman added that also resolving Grand Bahama International Airport’s fate, and rebuilding, was “indispensable” to the island’s economic recovery. “Common sense tells you we cannot have a successful tourism industry, or any kind of commerce in Grand Bahama, without a functioning, viable airport facility,” he added. “It’s a non-starter.
#“All that is being negotiated now. That’s not within my compass and jurisdiction, but I know it’s being actively negotiated at the moment, the acquisition of the airport.”
#K Peter Turnquest, deputy prime minister, last week pledged that the government is still committed to acquiring Grand Bahama International Airport from the Hutchison Ports Holding and Grand Bahama Port Authority ownership and “restoring it to its former glory”.
#“We are still in discussions with the owners of Grand Bahama International Airport for the eventual transfer to the government with the objective of restoring it to its former glory with a new terminal, taking into account the level of storm surge it has suffered in past hurricanes,” Mr Turnquest said.
#“Yes, we do intend to go forward with the transfer of the airport to the government and invest in that facility to get it up and running as quickly as possible.” The Government had previously been exploring paying the two existing owners $1 each, and letting them keep the Dorian-related insurance proceeds, but discussions between the parties seemed to cease as a result of the COVID-19 pandemic.
#The airport is a vital infrastructure asset for Freeport’s business model, and will assume even greater importance should Carnival and Royal Caribbean/ITM go through with their projects for the city. A government takeover, and Grand Bahama International Airport’s eventual reconstruction, would also provide a huge boost for investor confidence.