PM gets assurance on security of Atlantis jobs
Prime Minister Hubert Ingraham said yesterday he has been assured that the jobs of the 8,000 people employed with Kerzner International in The Bahamas remain secure despite the shift in ownership of the Atlantis Resort and One&Only Ocean Club.
Chairman and CEO of Kerzner International Sol Kerzner announced yesterday that his company intends to transfer its ownership of the Paradise Island properties to Brookfield, a Canadian publicly-traded company with $159 billion in assets.
“The acquisition of Kerzner International’s Bahamian properties fits into the vision of Brookfield, which has a strong cash flow and balance sheet, permitting it to provide essential financial capital at a time of global economic and financial uncertainty,” said Ingraham as he delivered a communication in the House of Assembly.
“This is especially important given our interest in ensuring that the new ownership of Atlantis will provide continued security of employment for the 8,000 Bahamians employed there.
“I have been assured that Brookfield shares Kerzner’s commitment to continue future capital expenditure and maintenance of the resort at levels sustained over the years, and further investing the same levels of resources into local and international marketing to support tourism in The Bahamas and to ensure the brand’s visibility.”
Ingraham pointed out that Kerzner has a debt that is supported by the assets in The Bahamas of $2.3 billion.
Part of that debt is an outstanding $175 million loan from Brookfield, he said.
“There is not very much scope for negotiation to pay the loan,” said Ingraham, adding that the shareholders of Kerzner have been ‘either unable or unwillinging and/or both’ to come up with the money.
He suggested that this turn of events came about because the Christie administration allowed Kerzner to borrow against its Bahamian assets for international developments.
“The reality is Kerzner International in The Bahamas is a very profitable company,” Ingraham said.
“It has nothing to do with whether Atlantis makes enough money. It has more than enough. It has more than $100 million in cash.
“It just happened to have too much debt piled up on top of it for all things that weren’t done in The Bahamas and it did so with your (the Christie government’s) blessing and support.”
Ingraham was responding to a question from West End and Bimini MP Obie Wilchcombe, the former minister of tourism.
Wilchcombe asked whether the government was assured that Brookfield would continue to market the resort and The Bahamas to the extent that Kerzner did.
As it relates to the impact that Atlantis has on the Bahamian economy, Ingraham noted that not only does the resort provide thousands of direct jobs, but it also provides thousands of indirect employment.
“The 8,000 direct jobs at Kerzner attract an annual payroll of approximately $189 million,” he said.
“Each direct job at Kerzner creates an additional 1.25 to 1.5 indirect jobs in the economy — 10,000 to 12,000.
“In all therefore, some 18,000 to 20,000 jobs; 15 percent of all jobs in our economy, are related directly to the operations of Kerzner International in The Bahamas.”
Ingraham noted further that Kerzner adds tens of millions of dollars in contributions to the Bahamian economy as a result of its operations.
He said that on an annual basis Kerzner pays $190 million locally to purchase goods and services; $47 million to The Bahamas Electricity Corporation; $27 million on business license fees inclusive of resort hotel license fees and licenses for joint venture timeshare and condominium operations; and $20 million on room tax.
Ingraham noted that the resort has been a reliable partner with the government in the development and maintenance of public spaces.
Over the years, Kerzner has spent $26 million on contributions to public parks and recreational space development, annual independence celebrations and hurricane relief.
Turning to the resort’s new owners, Ingraham noted that Brookfield has many years of operating experience and more that $69 billion of property assets giving it special expertise in real estate.
Ingraham said he met with representatives of Brookfield in the last several months in connection with the proposed change of ownership.
“I expect that business will continue at those properties as usual,” he aid.