By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Downtown Nassau is failing to exploit its prime asset because many Bay Street buildings “are facing the wrong way”, a Cabinet minister has told Tribune Business.

Dionisio D’Aguilar, minister of tourism and aviation, said in a recent interview that “the beauty of the city of Nassau” is its view of the ocean overlooking Nassau Harbour. Yet he pointed out that numerous properties on Bay Street’s northern side faced into the street rather than across to Paradise Island, thereby missing out on the opportunity to showcase the capital at its best.

The minister’s comments came as he confirmed that the government has agreed to lift height/zoning restrictions in the downtown/Bay Street area on a “case-by-case” basis to aid a long-awaited revitalisation of the city that has, to-date, failed to materialise.

While there were no specific limits on how high developers could go, Mr D’Aguilar said such a concession was designed to make downtown Nassau a “living city” once again by reducing construction costs sufficiently to enable the building of apartments and condominiums similar to those on Paradise Island.

However, he argued that Bay Street’s current configuration meant that many properties were not best-placed to take advantage of the retail, entertainment and food and beverage opportunities created by the development of the harbourfront boardwalk stretching from Woodes Rogers Walk and the cruise ship terminal to Potter’s Cay.

This is designed to better disperse tourists and cruise ship passengers more widely through downtown Nassau and harbour area, but the many properties that back on - rather than front on - to the harbour are not ideally suited to cater to these potential customers.

“The beauty of the city of Nassau is the view of the ocean,” Mr D’Aguilar told Tribune Business. “If you build high rise buildings that overlook the harbour, that’s the value. The orientation of Bay Street is that every building on Bay Street faces Bay Street, but the orientation should be to the ocean.”

Virtually all cities, ports and towns on the ocean seek to exploit this as a key attraction for both locals and visitors alike, with buildings that typically face the sea. However, much of downtown Nassau and Bay Street has evolved in the opposite fashion where properties back on to the harbour, shielding much of it from public view.

Still, Mr D’Aguilar said the Government has agreed to ease height/zoning restrictions in the downtown area in a bid to attract Bahamians and residents, especially young professionals, to live in the area and make Nassau a “living city” - especially at night.

Confirming that this was a key component to the revitalisation effort, he told Tribune Business: “The Government is prepared to entertain elevated building heights to achieve that goal. We weren’t specific about what height, but we’re willing to entertain higher buildings case-by-case. The value of the land or whatever makes the case. There’s nothing specific.

“We’re prepared to consider buildings of greater height with the intention of creating the necessary scale to make housing affordable in the downtown area, and bring about its rebirth. We have to create accommodation in the downtown area in order to create three components that are necessary for its revitalisation.”

Besides enticing persons to live in downtown Nassau, Mr D’Aguilar said the other “components” involved an expanded nightlife, entertainment and food and beverage options, plus the $250m cruise port transformation set to begin shortly under Global Ports Holding’s leadership.

The previous height/zoning restrictions were seen as deterring much-needed investment required to spark downtown Nassau’s revival because they increased construction and other costs facing developers. This, in turn, pushed up prices and rental rates beyond affordability for many Bahamians.

Signalling that the Government is aware of these issues, Mr D’Aguilar said: “The volume of the land increases the higher the building goes, and that makes the proposition for the redevelopment of downtown and the cost of houses on the waterfront that much more financially viable.

“If building heights are restricted to very low levels, the only way a project can work is to make the units very expensive. If we allow building heights to go up to the same level as Paradise Island, which they will be facing, you improve the chance that apartment prices will be lower.

“You get more apartment per square foot of land, so the price is lower and you attract young professionals to live in the city. You need to create volume, to create height to get the density you’re looking for and the scale to make projects on Bay Street work.”

Acknowledging that “Bahamians abandon Bay Street” in the early evening, Mr D’Aguilar said the lack of activities and entertainment options was a key factor behind why all cruise ships left Nassau early taking with them up to 16,000 combined passengers on peak days.

While the $250m cruise port overhaul will help address this, and act as a potential catalyst for wider revival, the minister added: “We want Nassau to have life at night. Cruise ships leave because the town is deserted.

“How do we create scale in the destination to bring downtown alive at night, with restaurants, clubs and food and beverage options? The higher you go up, the cost of the land apportioned over a greater number of apartments becomes lower, and the only way to achieve that is by height.”

Downtown Nassau’s revitalisation as a centre of economic, social and cultural activity has long been identified as a priority by successive governments, but little tangible progress has been achieved to-date apart from the shipping industry’s relocation to Arawak Cay; the Pompey Square upgrades; and turning some streets into pedestrian-only thoroughfares.

Graycliff and John Watling’s Distillery have led the way in terms of private sector investments, but the area ‘east of East Street’ - in particular - remains in a state of continuous decay and decline despite the presence of the City of Nassau Revitalisation Act’s tax breaks and other incentives.

Mr D’Aguilar’s comments, though, back recent remarks by Ed Fields, the Downtown Nassau Partnership’s (DNP) managing director, who said the Government had agreed to lift height/zoning restrictions in the area.

Zoning, and especially height, restrictions in downtown Nassau have been an ongoing concern for many years. Larry Roberts, Bahamas Realty’s long-time principal, warned that uncertainty surrounding the issue was impeding the area’s redevelopment several years ago.

Those concerns were also echoed by former Cabinet minister, Brent Symonette, whose family has extensive real estate holdings in the downtown/Bay Street area. He complained to this newspaper that the then-Christie administration had failed to establish ‘the rules of the game’ for the area’s revival.

The issue was again raised just before Christmas 2017, with a prominent realtor warning then that downtown Nassau’s revival was being “stunted” by regulatory confusion that continued to deter potential developers and financiers.

Charles Christie, C. A. Christie Real Estate’s president, said zoning restrictions - especially the limits on how high developers could build - were combining with already-high property values to make any redevelopment ‘east of East Street’ commercially “unfeasible”.

Potential developers were thus being put-off by an unfavourable risk/reward analysis, he warned, unable to determine whether their proposed projects would yield the desired returns. And the same uncertainty was also driving away financiers of such redevelopment.

Mr Christie’s concerns were echoed by Charles Klonaris, the Downtown Nassau Partnership’s (DNP) co-chairman, who told Tribune Business that the height restrictions were “one of the most serious” impediments to fresh investment and development in the Bay Street area.

“The zoning has to change; no question about that,” Mr Klonaris said. “No one is going to make an investment if they can only go up five storeys. We have to create demand. If the demand among financiers is not there, the revenues are not there, no one is going to invest.

“That’s been one of the most serious problems in attracting development and investments downtown; the height restrictions. We have this valuable frontage on the harbourside, and it’s easy to understand why development has not taken place. It’s too costly, if you only go up four to five storeys, to justify the investment.

“If you put the cost of the land with the cost of construction, you have to go up a certain amount or create a certain amount of units to get a return on your investment.”