The Deputy Prime Minister yesterday did not rule out the Government ‘nationalising’ Freeport’s Grand Lucayan resort, after a prominent attorney said such action is “not out of bounds”.

K P Turnquest told Tribune Business that the Government was looking at “all options” for the property’s re-opening and/or sale, after this newspaper questioned whether it would be prepared to acquire the resort in a ‘worst case’ scenario.

His comments came after Carey Leonard, the Callenders & Co attorney, said the “desperation” and “urgency” surrounding the Grand Lucayan’s continued closure may require the Government to undertake a ‘compulsory acquisition’ of the resort.

Mr Leonard, a former Grand Bahama Port Authority (GBPA) in-house counsel, told Tribune Business: “We are so desperate to have that hotel.

“It is such an integral part the economy and survival of Grand Bahama that I don’t think the Government of the Bahamas would be out of bounds to say: ‘This is what the hotel’s worth.

“‘You’re asking too much. We’ll give you two months, and then we’ll pay for it via compulsory acquisition, give you what it’s really worth, then sell it ourselves’. I think it’s that urgent, quite frankly.”

Mr Turnquest did not deny a potential Government purchase of the Grand Lucayan when Tribune Business put this to him, after being informed this was among the Government’s “back stop”options he referred to at last week’s Grand Bahama Chamber of Commerce luncheon.

“We’re looking at all options in that regard,” the Deputy Prime Minister said of Freeport’s ‘anchor’ resort property. “We have not ruled out any contingencies.

“It is critical to our restoring the economy of Grand Bahama, everyone recognises that, and it’s in everybody’s interests to get that property open and back in operation as quickly as possible.

“All parties at the table are cognisant of that, and are being as diligent and aggressive as we can to effect that.”

Mr Turnquest was responding after Tribune Business was informed that the Minnis administration was considering a government purchase, or having to sweeten a private deal with millions of dollars in subsidies, tax concessions and the like, as a ‘last resort’ to re-open the Grand Lucayan.

A Government acquisition of the Grand Lucayan would be fraught with difficulty, and the prospect will likely be greeted with horror by many observers - especially those not living in Freeport or Grand Bahama.

Any purchase funded by the Bahamian taxpayer will likely add to the huge fiscal strain already imposed on the Public Treasury by a $7 billion-plus national debt and $300 million-plus annual deficits.

And, given the Grand Lucayan’s recurring annual losses, subsidies to cover this ‘red ink’ would also have to be included in every Budget. Such a purchase would also represent an expansion of government at a time when the Bahamas needs to shrink it - something the Minnis administration said it would seek to do.

Talk of ‘nationalisation’ will also bring back unhappy memories for many Bahamians of the Hotel Corporation’s ‘heyday’, when the Pindling administration took control over much of the Bahamas’ hotel plant.

That ill-fated period was ended when the Ingraham administration was elected in 1992 and decided to exit the hotel business, realising its seasonality and high operating costs made it an extraordinarily difficult business to be in.

Another downside is the negative messages that will be sent to other foreign investors by the use of ‘compulsory acquisition’, which could cost the Bahamas the FDI inflows it desperately needs to grow GDP and reduce unemployment.

Tribune Business earlier this year revealed that the Canadian-based real estate developer, the Wynn Group, had emerged as the front-runner to acquire the Grand Lucayan from Cheung Kong Property Holdings, Hutchison Whampoa’s real estate arm.

Wynn signed a Letter of Intent (LOI) for the purchase in late April, and paid a deposit to prove its intent. However, this newspaper’s sources yesterday said little progress was being made towards closing a deal, despite social media reports that an agreement was close.

Among those also said to have looked at the Grand Lucayan are former Baha Mar developer, Sarkis Izmirlian, and ex-South Ocean investor, Roger Stein. Other parties said to be interested are Warwick Hotels and Resorts, the owner/operator of the former Holiday Inn on Paradise Island, and a New York-based group.

However, time is rapidly running - if it has not already done so - to re-open the Grand Lucayan in time for the first half of the winter 2017-2018 season. Its continued closure means Grand Bahama has lost 59 per cent of its room inventory, and ability to attract new airlift, along with around 1,000 jobs.

Many Port Lucaya Marketplace tenants are increasingly fearful they will not survive, and there are ongoing concerns that Freeport and Grand Bahama will continue to de-populate as persons leave to seek work elsewhere.

It is almost 10 months since the Grand Lucayan and Memories closed in Hurricane Matthew’s wake, and the urgency of the situation was highlighted recently by Magnus Alnebeck, Pelican Bay’s managing director.

“It’s crunch time now,” he told this newspaper in a recent interview.

“I think that if parts of the Grand Lucayan are not open by the winter season - unless something is open by the winter season - it’s going to be very hard to turn around.

“In the next two to three weeks, there needs to be a sale [of the Grand Lucayan] to be able to save this.”