Thursday, October 11, 2018
By NEIL HARTNELL
Tribune Business Editor
The Bahamas National Trust (BNT) yesterday said the $10m annual operating costs for this nation’s national parks meant it had no choice but to seek private capital backing.
Eric Carey, pictured, the BNT’s executive director, revealed to Tribune Business that an additional $25m was also required to upgrade essential infrastructure across the 32 parks as the trust unveiled its first joint venture with a private investor/developer.
Confirming last month’s revelations by this newspaper, the BNT formally announced its public-private partnership (PPP) with Albany, the luxury southwest New Providence community, for the Exuma Cays Land and Sea Park.
The agreement, involving a 50/50 joint venture, will see Albany and its parent company, Nexus Luxury Collection, invest the necessary capital to develop a beach club and restaurant experience at Warderick Wells Cay, where the park’s headquarters and visitor centre are located.
A water catchment system, utility and general support building will also be developed, and infrastructure upgraded to enhance the visitor experience. The BNT’s private sector partner will also construct accommodations to support future marine biology camps and retreats for Bahamian students.
Mr Carey said the deal will provide the sustainable financing required for the BNT to properly manage and safeguard the Exuma Park, benefiting both Bahamians and visitors, while covering an annual $300,000 “and growing” operating deficit.
He admitted, though, that the Albany joint venture had “optics issues”, with the Trust already receiving a backlash from persons fearing it was “giving the park away” to the developer and permitting an exclusive destination for its guests that will bar Bahamians from entry.
Refuting these claims, Mr Carey told Tribune Business that “no lease or exchange of land” was involved in the Albany deal. He added that the Exuma Park’s administrator had “the final say” on everything that takes place, and has to approve all the developer’s plans, while also denying that the latter’s guests would enjoy any “exclusivity”.
Emphasising that it had retained full control, the BNT executive director said all tours and excursions on Warderick Wells Cay will be provided by members of the local community, with Albany’s “concession” enjoying a “small and light footprint”.
Mr Carey said “simple economics” had forced the BNT to seek private investor support, with its current income - including an annual $1.5m grant from the Government - more than 50 percent below the financing required to properly manage and protect all The Bahamas’ national parks.
With the Government “making it clear” that the necessary funding will not be coming from the cash-strapped Public Treasury, he added that the Trust had sought to adopt the “concession” model employed by US and Canadian national parks.
“The cost estimates we’ve done show that to manage the national parks we currently have, 32, will probably cost us $10m per annum if we bring them all on stream,” Mr Carey told Tribune Business.
“That includes $25m in capital investment in visitor centres, board walks. When we spoke to members of the Government, current and former administrations, they encouraged us to look at the private sector to see if there was any interest in operating certain concessions, including potential visitor centres, offering some tours and providing the infrastructure to do that.
“The Government made it very clear that they would not provide the $25m. They don’t have it in the current Budget, and will not have it in the future.” The BNT yesterday said it currently incurs a $300,000 annual deficit between the Exuma Park’s annual income and $750,000 operating costs, making it difficult to find the “several million dollars” required in the near future to maintain and upgrade its facilities.
The BNT’s accounts show it received $1.5m and $1.4m grants from the Government in 2017 and 2016, respectively, without which it would have made a substantial operating loss for both years. Its endowment fund, the Heritage Fund, did possess some $4.319m in assets at end-2017 through investments in government bonds and Templeton Global mutual funds.
The Government’s $1.5m grant accounted for 35 percent of the National Trust’s $4.282m income in the year to end-December 2017, which saw it incur a net operating loss of $101,162. This followed a similar $117,976 net operating loss for 2016, although these figures do not include dividends and the performance of the Heritage Fund.
Mr Carey conceded, though, that the BNT is already having to work hard to ensure its agreement with Albany is not “misconstrued” as giving away the Exuma Cays Land and Sea Park to a foreign developer for “exclusive” use by its high-end homeowners, guests and clients.
Albany’s principal investor is the Tavistock Group, the vehicle through which Lyford Cay billionaire, Joe Lewis, makes his worldwide investments. Tavistock’s partners in Albany and its parent, Nexus Luxury Collection, include world-renowned golfers, Tiger Woods and Ernie Els, plus singer Justin Timberlake.
“The interesting thing for us is there’s absolutely going to be no lease, no exchange of the land,” he told Tribune Business. “They [Albany] have no control over the land. The park administrator has the final say on what happens; they approve everything. There’s no exchange of land; permanent or temporary.
“The other thing is there’s no exclusivity. A lot of the comments I got today were: You’ve given the Park away to Albany’s guests. It’s a restaurant. You can access the restaurant, can go online and purchase, and not be charged beyond the food and drink.
“There’s going to be a beach club, with fees for showers and towels, but there’s no exclusivity. It will still be full, open access. We made it very clear to Albany what we could provide: An incredible experience for your guests in the national park, but they are going to interact with our staff, other guests and not have an exclusive experience,” Mr Carey continued.
“There’s no exclusive beach club. It was made clear this was an untenable element to consider in this case when they came to us. If you’re coming to a national park this is what we offer. This is a public space.”
However, Sam Duncombe, the environmental activist and reEarth president, told Tribune Business that she was “more than a little concerned” by the BNT’s approach to, and structuring of, its PPP arrangements with Albany and other private investors.
As a national non-profit organisation, which receives a significant portion of its funding from Bahamian taxpayers, Mrs Duncombe argued that there should have been greater transparency with the Albany joint venture made available for public comment and feedback before it was signed.
“It does not sit well with me at all. They do concern me,” she added of the Trust’s PPPs. “I really do believe the process should have been open to the public. Who are the others? What have they done?
“I get that money is money, and the organisation needs money to function, but surely there are ways to trim the budget and look for partners.”
Mr Carey, meanwhile, said Albany viewed its Warderick Wells Cay investment as an off-island beach break/getaway destination for residents and clients, rather than a major profit driver. The developer and BNT have entered into a land use agreement covering the guest facilities.
“From the numbers I’ve seen Albany will not make a lot of money from this,” he revealed. “This is an amenity for guests, buyers of property, to say they took a day away. I don’t see this as a money maker for their guests....
“We were very careful in negotiating the agreement so it was clear to Albany that they will not get an advantage no one else is going to get, and we are not going to disadvantage any member of the public by this agreement.
“We will do all the tours. We will engage the local community to create tours. This will allow us to get local people to imagine and run tours that charge Albany’s guests and our guests.”
The Exuma Cays Land and Sea Park, which covers 176 square miles, is the first “no take” protected area of its kind in the world. It is one of 32 Bahamian national parks that cover more than two million acres of land and sea in this country.
Mr Carey explained that national park “concessions” in the US and Canada typically involved the right to provide certain services, such as hotels, lodges and restaurants, with each one granted on its “case-by-case” merits.
As the BNT’s PPP model evolved, he said the organisation was keen to speak to Bahamian developers of bonefish lodges and other eco-tourism facilities. “We’d love to get some of the Andros fly fishermen to put together a proposal for day camps to take guests from New Providence,” Mr Carey said.
“It’s an open book as far as the possibilities. We don’t have any locked down, but are in discussions with several companies.” These include Ultimate Tours Bahamas, an eco-tourism venture, and Papa Surf, a provider of kayaking and other eco-based adventures.
Janet Johnson, the BNT’s president, said in a statement: “BNT is excited to announce this first major commercial collaboration in a national park. Our national parks are entrusted to the BNT to protect natural resources, and to ensure public access to these incredible places.
“BNT has been careful in the negotiations and will not compromise the responsibility entrusted to us to protect the environment of our national parks. Our partnership with Nexus in no way changes the use and enjoyment of Warderick Wells and the Exuma Park for both Bahamians and international visitors. The partnership will allow us to enhance the visitor experience while providing valuable financing support.”
Christopher Anand, Albany/Nexus’s managing partner, said: “Nexus feels privileged to partner with the BNT on this exciting venture at Warderick Wells in the Exuma Park, the first no-take land and sea park in the world, and an area of incredible natural beauty.
“Our goal is to provide much needed capital to the BNT and this magnificent Exuma Park area, while enhancing the experience for all guests that visit Warderick Wells.”
Mr Carey added: “The park already generates fees from moorings, anchorages and tour operators, but has the potential to do so much more. We need become more creative about identifying ways in which both the BNT and private sector can work together to derive not only social and ecological benefits, but also economic benefits from protected areas.”