Grand Lucayan deal canceled

The government has canceled the sale of the Grand Lucayan resort in Grand Bahama to Royal Caribbean Cruise Lines (RCL) and the ITM Group, Minister of Tourism, Investments and Aviation Chester Cooper said yesterday, saying the deal was not in the best interest of Bahamians.

“This is a major step forward as it now allows the board of Lucayan Renewal Holdings Limited to negotiate directly with other suitors,” Cooper said in a statement.

“Thankfully, there are several noteworthy entities that have a credible interest in the property.

“The ideal candidate in our view is an entity with significant resources and a clear vision for the properties that is aligned with the Ministry of Tourism’s vision and the long-term strategic plan for Grand Bahama as a destination.

“We do not plan to belabor this process. The Grand Lucayan resort has already cost taxpayers well in excess of $150 million. Talks with other potential investors will start shortly.”

However, Bahamas Ports Investments Ltd. (BPI), a joint partnership between RCL and ITM, is still committed to the development of a port facility in Freeport, Cooper said. 

The agreement between the government and BPI was signed in March 2020 under the Minnis administration and the final buying price was $50 million.

The redevelopment of the property was set to start this year but the COVID-19 pandemic delayed and changed the terms of the agreement. 

The Minnis administration purchased the resort from Hong Kong conglomerate Hutchison Whampoa in August 2018 for $65 million.

Cooper said upon coming to office in September, the Davis administration set up a Cabinet sub-committee to “explore options to expedite the redevelopment” of the resort. 

“We examined the current deal the former administration negotiated and came to the conclusion that the way it was structured was not in the best interests of the Bahamian people,” he said. 

“The government was frankly not satisfied with what was proposed or that the project would be advanced in the short or medium term.

“We were not willing to continue on without a clear timeline for completion and were of the view that many of the terms were not in the best interest of the Bahamian people.

“For example, the Minnis administration via Lucayan Renewal Holdings Limited (LRHL) had agreed to lend money to Bahamas Port Investments Limited to renovate and develop the property. In summary, the deal was not a win-win for the Bahamian people.

“Therefore, … the boards of Lucayan Renewal Holdings Limited and Lucayan Beach Casino Holdings Limited terminated by mutual consent the 2020 purchase agreement between themselves and Bahamas Ports Investments Limited (BPI), a joint-venture partnership between Royal Caribbean Cruise Lines and ITM Group.

“This effectively cancels the agreement between the government of The Bahamas and RCL/ITM for the sale of the Grand Lucayan resort.

“We are pleased to note that BPI maintains an ongoing commitment to the development of a world-class port facility in Freeport. RCL remains committed to the Grand Bahama Shipyard in which it holds a 40 percent interest.”

Cooper said the government is committed to finding a swift solution for the sale of the property and to “restore hope to the people of Grand Bahama”.

The agreement signed by RCL called for a $300 million investment into the hotel property to “refurbish, renovate and reconstruct 500 rooms in phase one; and another 500 rooms along with 500 villas in phase two”.

The plan also included a casino; a water park; a restaurant and retail center, and Holistica – another joint venture between RCI and ITM Group.

RCL’s cruise port will be built in Freeport harbor and will accommodate three ships “in phase one and up to seven ships in subsequent phases”.

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source https://thenassauguardian.com/grand-lucayan-deal-canceled/