By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Opposition’s deputy leader yesterday called for the Government’s multi-billion dollar Crown Land holdings to be transferred into a sovereign wealth fund-type vehicle, demanding: “We have to formalise and regularise the situation.”

K P Turnquest called for greater transparency and policy clarity over how Crown Land was managed, and sold/leased to both foreigners and Bahamians, arguing that “everyone has to know what the rules are”.

He was speaking out after Tribune Business revealed earlier this week how a well-known Bahamian contractor in 2006 acquired 7.366 acres of prime commercial land on Gladstone Road for $221,000, via a Crown Land grant, only to mortgage it as security for a $7 million loan within three months.

Mr Turnquest told this newspaper that the transaction, which took place under the first Christie administration and involved long-time Progressive Liberal Party (PLP) supporter, Edward Penn, was “certainly suspicious”.

He declined to go further in his assessment without a proper investigation of the deal, but said it raised questions as to whether either the then-Government had undervalued the Crown grant, or Bank of the Bahamas’ appraisal was wildly optimistic.

“I think you nailed it in terms of the issues,” Mr Turnquest said of the Tribune Business article. “It appears on the face of it that those guys [the Government] undervalued that property and may have cut a deal, although we can’t prove that.

“It certainly bears looking into because it’s interesting that, less than four months later, he can turn around and leverage it for $7 million. It’s highly suspicious.”

Mr Penn and his family used the property acquired from the Crown to construct what they intended to be a Home Depot-style retail outlet.

The property was ultimately taken over by Bank of the Bahamas, and is now the site of Phil’s Food Services, the grocery retailer. The latter, though, is one of the 13 ‘bad’ borrowers now transferred to Bahamas Resolve as part of the $100 million Bank of the Bahamas ‘bail out’.

The Crown Land grant to Mr Penn and his company is not the first controversy to arise surrounding the management and use of the Government’s substantial landholdings.

Tex Turnquest, the former director of lands and surveys, was forced to resign from his post by ex-Prime Minister Hubert Ingraham when it was revealed that five parcels of Crown Land in Forbes Hill, Exuma, had been granted to his friends and family. Shortly after being granted, they were ‘flipped’ to foreign buyers for significant profits.

And Mr Turnquest the MP (and no relation to Tex) said a number of his own east Grand Bahama constituents were still waiting to hear whether their grant applications had been approved, even as some of their neighbours - whose applications had been submitted later - received their desired Crown Land.

“I’ve run across this issue in my own constituency where individuals have applied for Crown Land, and have not been able to get it, and some people who applied for Crown Land after other residents were able to get theirs,” Mr Turnquest said.

“We have to formalise and regularise the situation with Crown Land, and review the procedures for how Crown Land grants are done to ensure there is no possibility of suspicion as to how it came about.”

Mr Turnquest said many of his constituents’ applications, which had been to purchase Crown Land for residential or farming use, were “in abeyance” with no idea as to their status.

The Government is the largest landholder in the Bahamas via the Crown, which owns about 2.518 million acres or 73 per cent of the Bahamas’ total land mass of 3.45 million acres.

As a scattered island nation especially vulnerable to climate change and sea level rises, land is a key economic and social resource whose management and usage is vital to the Bahamas’s social and economic well-being.

And, given the size of its holdings, the Government has to play the lead role, especially in the Out Islands.

Mr Turnquest said: “With respect to people, particularly in the Family Islands, who want to acquire land at a reasonable price for residences, that is a major issue.

“While some may be able to squat on generational land, they can’t use the equity in that land to raise a mortgage. In terms of support and the needs of the Family Islands, it [Crown Land] is certainly a major, significant issue.”

The FNM deputy leader also acknowledged the frequent complaints that foreigners found it easier to acquire Crown Land than Bahamians, while often obtaining lower prices and pieces of land for similar projects as their local counterparts.

“We have to reconsider our land policy to empower Bahamians for ownership,” Mr Turnquest told Tribune Business. “Some people have valued the entire landholdings of the Government, which it holds in trust for the Bahamian people, at a couple of billion dollars. In terms of the potential of that land, it’s significant.

“I think what we have proposed before is that the Crown Land ought to be assessed and put into a sovereign wealth fund-type of entity, and that whenever someone makes an application for that land, it is evaluated on its merit and the true value is assessed.”

Mr Turnquest called for all future Crown Land grants to be transparent, “so everyone knows what the rules are, and there’s no possibility of the abuse of the grant.

“That is particularly critical in areas where there is limited Crown Land.”

Mr Turnquest also suggested that ‘claw back’ provisions be inserted into all Crown Land grants, so that if the property was not used for the stated purpose, or no development activity occurred, it could be reclaimed by the Government.