• All-out war erupts between Port and Del Zotto family

• Who say GB ‘most grossly underperforming island’

• GBPA: Deal gives ‘more equity’ for all contractors

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Freeport concrete supplier’s battle with the Grand Bahama Port Authority (GBPA) yesterday escalated into an all-out war as the two sides traded accusations of “spite” and “harassment” over the former’s imminent closure.

Gold Rock Corporation and its owners, the Florida-based Del Zotto family, fired the first salvo in branding the GBPA as “the leaders of the most grossly underperforming island in The Bahamas” as they unveiled the shuttering of not just their concrete-making business but also their Grand Bahama-based hardware store and furniture and home centre.

Blasting Freeport’s quasi-governmental authority for “blatant disregard for the growth of this island”, Gold Rock and its principals alleged that they were victims of “continued harassment” by the GBPA - without explaining why - and asserted that they would “not be cornered, pushed or strong-armed” in negotiations with its affiliates for a new aggregate supply contract.

That refers to the spark for the dispute, namely talks with the Grand Bahama Development Company (DevCO) for a new agreement over Gold Rock’s access to aggregate/fill in its Devonshire subdivision that was critical for its ready mix, block and pre-cast concrete products. DevCO, though, has argued that Gold Rock’s continued monopoly over this source cannot be justified because it had under-performed the previous contract by not taking the stipulated tonnage.

And the GBPA, whose Port Group Ltd affiliate holds a 50 percent ownership interest in DevCo, yesterday launched a counter-offensive against what it branded as “false” and “salacious” statements by the Del Zottos, who it accused of “mud slinging” and failing to give “the real facts”.

Freeport’s quasi-governmental authority, which is owned 50/50 by the Hayward and St George families, again sought to distance itself from the aggregate negotiations involving DevCO, whose other shareholder is Hutchison Whampoa, which has Board and management control.

However, its statement tacitly admitted its standing with the Grand Bahama public is low, arguing that Gold Rock and the Del Zottos were “hoping to take advantage of what they believe to be an unfavourable public sentiment against the GBPA” by directing their fire against it and thus distracting from the DevCo talks.

The GBPA, though, accused the Del Zottos of being “motivated by nothing but spite” in deciding to close the Home Design Centre and Do It Centre as well, and thereby exiting all their Freeport investments, even though these two entities were not impacted by the aggregate supply talks. It added that the move “will cost yet more hardworking families their livelihoods and further shrink the options available to consumers in a struggling economy”.

Gold Rock’s owners, though, show no signs of backing down and have already moved to make good on their threatened Freeport exit. Immediately upon Friday’s closure announcement, a Home Design Centre advertisement was promoting a “30 percent off” storewide sale with effect from Saturday on all appliances, housewares, rugs, bedding and other decor accessories, describing this as a “clearance sale; everything must go” with “all sales final”.

The concrete supplier, which took the DevCO dispute public on June 29 by warning it would close its concrete block and ready mix division unless a new aggregate deal could be reached on acceptable terms, clearly waited one month to see if things would change in its favour. When this did not occur, it launched Friday’s savage, full-frontal assault on the GBPA.

“The decision to withdraw our investment in its entirety comes from years of witnessing the blatant disregard for the growth of this island by the GBPA,” Gold Rock and the Del Zottos blasted. “Our operations have never ran to their fullest production capability because of the economic decline and stagnation that Freeport has been forced to endure. 

“That is not to say we have not prospered. We have reinvested every dollar back into these operations with the hope of the island reaching its true potential, and to match the rest of The Bahamas’ growing economy. We see this through infrastructure products we sell to the Family Islands. Sadly, Grand Bahama’s youthful and ambitious leave to find careers elsewhere because of the perpetual wilting economy.

“Gold Rock will no longer contribute under the jurisdiction of the ‘Pink Building’ after the way we have been treated and disregarded. We have no confidence in continuing our 30-year investment. We are not alone; many large companies before us have left for these same reasons.”

Touching briefly on the DevCO aggregate supply dispute, Gold Rock said the assertion that it could purchase the necessary fill from alternative sources would “force” it to raise prices for its concrete products - implying it would make them uncompetitive against foreign imports. Tribune Business understands that the Devonshire subdivision is a relatively short journey from its headquarters, thus helping to minimise trucking costs.

Arguing that they were not simply employing hardball negotiating tactics, Gold Rock and the Del Zottos added: “It is us refusing to pander to the constant hurt inflicted on Grand Bahamians by the GBPA... It is just one of many examples as to why this island cannot prosper... After continued harassment by GBPA and careful thoughts, we as a family (employees included) have taken a position that we will not tolerate it.”

Throwing DevCO’s accusations that it had been guilty of “gross underperformance” on the previous aggregate deal back at the GBPA, Gold Rock and the Del Zottos asserted that this had come from “the leaders of the most grossly underperforming island in The Bahamas”.

They added: “Look at the airport. Look at the abandoned hotels and buildings everywhere. Look at the roads. Look at the condition of the development of this city. Naturally, they will say this is out of their control as it is their signature to deflect and deny.”

Branding Grand Bahama as “a decaying island” headed by “unelected leaders and their appointed under-qualified affiliates”, Gold Rock and the Del Zottos continued: “A business degree cannot teach you not to attempt to strong-arm a company that started from a 12-foot by 16-foot garage. We will not be cornered or pushed.

“They [GBPA owners and management executives] have put more effort into saving themselves the humiliation of situations they created instead of ensuring the growth of this island. Sadly, the bridge Edward St George built when he invited us here 30 years ago in saying ‘I need a pre-cast manufacturer on this island’ has been burned... Yet another hurdle for Freeport that may have been solved with a five-minute conversation if they cared enough to have it.”

Arguing that the GBPA’s response would likely be filled with “pandering, deflecting and lack of accountability”, Gold Rock and the Del Zottos said: “We truly believe until something is done about the GBPA, the island will endure a perpetual state of decay, as it has for almost the last 18 years.”

Freeport businesspersons and residents, speaking privately to Tribune Business in the wake of Gold Rock’s statement, said they agreed with many of the sentiments voiced regarding the GBPA and the city’s stagnation/decay. However, some argued that the Del Zottos were not the best persons to be delivering that message, one Grand Bahama contractor saying their departure was a case of “good bye and good riddance” as far as he was concerned (see article Page 1B).

The GBPA, meanwhile, hit back yesterday over what it described as “false, salacious and purposefully sensationalised statements meant only to engage in mudslinging, which benefits no one”. Saying that its “hearts go out” to Gold Rock’s employees, and their families, over their imminent job losses, Freeport’s quasi-governmental authority added that the business closures were “unnecessary”.

Its statement argued that DevCO was justified in seeking new terms for the Devonshire aggregate agreement because Gold Rock, in failing to mine and extract the agreed upon tonnage even before Hurricane Dorian and COVID, was preventing rival Bahamian contractors from accessing the same fill due to the five-year exclusivity or monopoly it was granted from 2017.

Implying that this was unfair, the GBPA said DevCO wanted to “right size” the deal such that Gold Rock would still have access to the same level of aggregate it previously mined, and thus be able to sustain its operations, but give up its exclusivity to let other contractors have access.

“DevCO’s new contract was seeking to do two things: Provide the Del Zotto family with exactly what they have been using to run their operations so they would not be disadvantaged, and free up unused resources so that prospective investors, including local Bahamians, would not continue to be disenfranchised and would have the same entrepreneurial opportunity as the Del Zottos of Florida,” the GBPA said.

“Contractors, the construction sector and the wider community in Grand Bahama are well aware of the above and may have raised the issue of a more equitable arrangement under the circumstances. This is exactly what DevCO sought to provide. That the Del Zotto family does not appear to share this perspective says more at the end of the day about their attitude to Grand Bahama than it does DevCO or the GBPA.

“Regardless of their stance on the mining contract, there is no need to shut down the other businesses in Freeport, including a much-needed hardware store and furniture and home centre, which were totally unaffected by the Gold Rock negotiations. This move, seemingly motivated by nothing but spite, will cost yet more hardworking families their livelihoods and further shrink the options available to consumers in a struggling economy.”

The relationship the Del Zottos and Gold Rock once enjoyed with the GBPA has soured considerably since 2016, when the latter selected them as its joint venture partner in the Freeport Light Industrial Park (FLIP) project - a development that did not proceed. It is understood that the GBPA was to provide the financing for the venture, while Gold Rock would source company tenants for FLIP, but the reasons for its fate have never been disclosed.

Jamaal Gomez, Gold Rock’s general manager, could not be reached for comment before the Emancipation Day holiday weekend despite Tribune Business leaving a phone message. Ian Rolle, the GBPA’s president, too, did not return this newspaper’s call despite a detailed message being left about Gold Rock’s statement, which by then was already widely circulating on social media and in Bahamian What’s App chat groups.

The GBPA, though, accused Gold Rock of deliberately trying to conflate it with DevCO and make it seem as if the two are “interchangeable”. It added: “They are hoping to take advantage of what they believe to be an unfavourable public sentiment against the GBPA.”