By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Cabinet minister yesterday ruled out moving the Post Office to a new location before 2024 because breaking the existing Town Centre Mall lease will be too costly.

Jobeth Coleby-Davis, minister of transport and housing, told the House of Assembly that the Davis administration is “not be able to move forward at this time” any plans to relocate the agency due to the lease terms and rates that the Minnis administration agreed to on July 12, 2019.

Speaking as she tabled the lease document in Parliament, she said: “Even if the government were to find a more suitable and cost effective location, due to concerns about duplicated costs and the amounts already expanded, we would not be able to move forward at this time.

“Those are the facts. I will allow those within earshot to form their own conclusion regarding whether they believe the Government received value for money or not.” Although she gave no opinion, Mrs Coleby-Davis’ presentation and tone did not amount to a ringing endorsement of the Post Office lease arrangement.

The deal aroused significant controversy at the time because Brent Symonette, then a sitting Cabinet minister, is among the Town Centre Mall’s owners with himself and his brother, Craig, holding a 50 percent equity stake in the property. The other 50 percent is owned by the Darville family.

Mr Symonette was thus in a position to benefit financially from the Post Office lease, and many Bahamians including the then-Opposition Progressive Liberal Party (PLP) blasted the deal as a ‘conflict of interest’ given his Cabinet position, even though this was fully disclosed and the matter debated in Parliament.

Mr Symonette also said he was not present in The Bahamas when the Minnis Cabinet voted to move the Post Office to Town Centre Mall, as he was attending the Society of Trust and Estate Practitioners (STEP) Latin American regional conference. However, the then-Opposition viewed it as a deal that would make one of its rivals even wealthier.

It is impossible to judge, based on the lease agreement itself, whether the Government received value for money. However, the details show that the Minnis administration kept to its word in achieving a rental rate of $12 per square foot when the Government pays $30-$40 per square foot at some of its other properties.

The Post Office’s annual rental rate was set at $632,952 over the five-year period for 52,746 square feet. This equates to $12 per square foot per annum, with the monthly rental figure pegged at $52,746. Thus the total gross rental income received by the Town Centre Mall’s owners over the five-year period will be $3.165m

Mrs Coleby-Davis, though, yesterday said the true annual payments by the Post Office/government actually total $820,053. She added on the $75,954 in VAT that the Government must pay on the lease, at a rate of $6,330 per month, plus $111,177 per annum to reimburse Mr Symonette and the other Town Centre Mall owners for financing a $500,000 upgrade to accommodate the Post Office.

However, given that VAT is the Government’s main revenue sources, that $75,954 per annum payment will come back to the Public Treasury. Therefore, an argument can be made that the true cost is really $744,129 per year or $3,721m over the full five-year lifetime of the lease.

The latter figure compares reasonably well alongside the $4m that the Minnis administration said would be required to outfit the former Phil’s Food Services building on Gladstone Road to accommodate the Post Office.

And the location left by the last Christie administration, the former Independence Shopping Centre on East-West Highway, was said to have cost $4m to purchase and another $4m-$5m to renovate.

The space taken by the Post Office at Town Centre Mall is also much less than the 75,000 square feet first envisaged when debate on the lease kicked-off in the House of Assembly in October 2018. That would have cost an annual rental payment of around $900,000, or $4.5m over the five-year lease lifetime.

Mrs Coleby-Davis, though, said of the lease terms: “It should also be noted that the Government is responsible for the utility bills, including all connection fees and deposits, as well as property and personal injury insurance.

“When the lease ends, the Government would also have to pay any associated legal fees if litigation arises. The lease is binding for five years until February 28, 2024.”