By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Grand Lucayan’s former chairman yesterday blasted the Prime Minister’s assertion that the former administration made a “mess” of the resort as “almost a self-indictment” of his mishaps.

Michael Scott KC, who under the Minnis administration headed Lucayan Renewal Holdings, the special purpose vehicle (SPV) formed to hold the resort, told Tribune Business that the criticism voiced by Philip Davis KC was effectively covering up his administration’s failure to solve the property’s fate despite enjoying four years of a “robust” post-COVID tourism market.

Amid the wait for Concord Wilshire’s proposed $120m Grand Lucayan acquisition to close, the former resort chairman attributed the challenges in finding a buyer to the Government’s failure to move Grand Bahama International Airport’s proposed $200m redevelopment forward in the two-and-a-half years since it unveiled a deal for that asset.

Asserting that “no developer of any seriousness or worth is going to invest hundreds of millions of dollars” in the Grand Lucayan’s transformation until the airport is redeveloped into a facility capable of facilitating the visitor numbers necessary to generate a return on investment, Mr Scott said the Minnis administration’s bid to sell the property ultimately feel victim to COVID-19.

He told this newspaper that in the aftermath of the pandemic, which struck within two weeks of the purchase agreement’s March 2020 signing, the joint venture between Royal Caribbean and ITM Group sought to “renegotiate the terms of the deal” and forced the Government to “pull the plug”.

Pointing out that he and his Board had to contend with Hurricane Dorian, as well as COVID-19, after the Minnis administration acquired the property for $65m in September 2018 to prevent job losses that would have resulted from its closure by Hutchison Whampoa’s real estate arm, Mr Scott hit back at the Prime Minister as the political exchanges over Grand Bahama’s economy intensify.

Mr Davis, responding to the Opposition’s call for clarity on the Concord Wilshire deal and airport redevelopment, had earlier pushed back himself by pointing to the Minnis administration’s failings. “First of all, they did a bad deal in the sale of the Grand Lucayan, or buying it, and I’m trying to clean up their mess. What did they do? Nothing,” he argued.

Mr Scott, though, yesterday branded this as “political flatulence of the worst kind”, and retorted: “It’s almost a self-indictment. What the Prime Minister is saying is that in four years of a robust world tourism market, which rebounded after the lockdowns of the pandemic because everyone was eager to travel again, he has not been able to cobble together a sale and redevelopment of the Grand Lucayan.

“We’ve had robust air travel and a cruise ship market. The reason he has not been able to do that is any developer of any seriousness and value is not going to invest hundreds of millions of dollars in a development of any scale unless there are revenue streams to recover that investment, and the gateway to that is a world-class airport which they have not done.”

However, Tribune Business understands that the Concord Wilshire deal - which plans to invest that “hundreds of millions of dollars” - has not broken down and negotiations involving the Government, developer and the latter’s partners are ongoing in a bid to close the transaction. The Miami-headquartered purchaser is still seeking to reach agreement with hotel, casino and golf course partners.

The Grand Lucayan sale includes the 56-acre beachfront resort along with the adjacent 160-acre Reef Golf Course. This newspaper has been informed that the Heads of Agreement commits the Government to having Grand Bahama International Airport ready to facilitate the necessary airlift by the the time the project’s two casinos open, which is anticipated to be 18 months from construction’s start.

Some sources suggest Concord Wilshire may take over the airport’s revival itself if the Government fails to make adequate progress. The revived Grand Lucayan is to feature seven major resort components, including three new hotel buildings and branded timeshare units.

Other features include a 35-acre cruise destination open to all cruise lines and guests, a 25,000 square foot indoor/outdoor casino, the conversion of the Reef Golf course to a 160-acre Greg Norman signature golf course, and a 16-slip mega-yacht marina.

Construction is expected to begin within 90 days of obtaining the necessary permits and approvals. The project will be rolled out in phases, creating 1,320 construction jobs and 1,750 permanent positions once the resort is fully operational. The Government also this week said it is “in the final stages” of securing the necessary financing to undertake the airport project.

Mr Scott, though, blamed COVID-19 for causing “the bottom to fall-out of the cruise industry within two weeks of that signing” with Royal Caribbean and ITM Group as the reason why that deal fell apart. “Royal Caribbean and ITM Group tried to re-negotiate the deal in terms that were not satisfactory to the then-minister of tourism, and in conjunction with Cabinet, he had to pull the plug on it,” he added.

“What the Prime Minister is saying is political hogwash of the worst kind. It has no credibility. It’s a self-indictment. The fact he’s not been able to turn that around in four years despite having a robust tourism market is an indictment.”

However, it was Chester Cooper, deputy prime minister and minister of tourism, investments and aviation under the current administration, who explained in May 2022 why the deal with Royal Caribbean and ITM Group fell apart. He said the joint venture wanted to pay $50m for the Grand Lucayan while obtaining $100m in cash concessions from the Government.

However, the Davis administration has also previously stumbled itself in efforts to find a Grand Lucayan purchaser. The bid by Electra America Hospitality Group also collapsed on its watch.

The Government is thought to have been subsidising the Grand Lucayan’s operations by between $1.2m to $1.5m per month ever since it acquired the resort from CK Property Holdings, Hutchison Whampoa’s real estate arm, six-and-a-half years ago.

Some $17.882m was used for this purpose during the 2022-2023 Budget year and, during the first nine months of the following fiscal period, $16.632m out of the $17m allocated was spent on subsidising the Grand Lucayan. A further $17m was estimated for the current 2024-2025 fiscal year, meaning that the $120m purchase price is unlikely to fully recoup the Government’s holding costs pegged at $63m.