Shooting in the dark
The number of conflicting statements coming from authorities overseeing the Grand Lucayan purchase and resale is worrying.
The government appears to be making it up as it goes. There has not yet been a sensible, detailed plan presented to the public on this important matter. That is because there is no clear plan.
All we really know right now is that the government has spent $10 million on our behalf to purchase a resort and has committed to spending another $55 million (plus interest), after warning that this is belt-tightening season and everyone will have to dig a little deeper to pay higher taxes.
Things have been so bad with government finances that even the school uniform allowance has taken a cut.
Truth is, we won’t know, and the Minnis administration does not know, how many taxpayer dollars it will spend by the time this nightmare that is the Grand Lucayan is finally over.
We have heard conflicting statements about whether the government will renovate the property.
Minister of Tourism Dionisio D’Aguilar initially said there was no plan to renovate. The government was merely buying the property and holding it until it finds a buyer, he told us.
Prime Minister Dr. Hubert Minnis then said the government was trying to determine what the cost would be to renovate Memories.
It is incredible that after committing to a purchase, after putting in $10 million, the government is only now exploring what needs to be upgraded and how much it would cost.
It’s pretty much like purchasing a rundown house then determining what it would cost you to fix it up and be able to move into it.
It is backward and senseless.
The government is blinded by the pressure to do something for Grand Bahama after promising Grand Bahamians the moon and the stars on the campaign trail in 2017.
D’Aguilar has since said that if it takes too long to sell the property, the government would renovate Memories. Again, the government does not know how much it would cost to renovate Memories, but if it does not find a buyer soon, it would dip into the public purse for money to renovate.
The government has also not yet said how much money Lighthouse Pointe — the only property on the three-piece strip that is open — needs for monthly operational expenses. How much is it earning? Is it earning enough to cover its expenses? How much of our tax dollars will be pumped into this indefinite bid to keep it from closing?
These are critical questions all Bahamians should be asking, and those who are asking questions ought not feel guilty or uncharitable for doing so.
Michael Scott, chairman of Lucayan Renewal Holdings, the board of the special purpose vehicle charged with finding a buyer for the Grand Lucayan, seems optimistic. He estimates a buyer will be in place within three to six months, and has indicated the government would be prepared to take a loss on the sale if it finds a buyer that is committed to developing the property and opening it fully.
Why is it that we are not comforted in hearing that the government would be open to a fire sale?
While Scott predicted in a Nassau Guardian interview it would take three to six months to find a buyer, attorney Carey Leonard, a member of Scott’s board, predicted in a Tribune Business interview that the government may have to own the resort for one to two years.
“We need to make it clear, and it seems Dionisio and those recognize it, that we don’t want to be in a position where we have a fire sale,” Leonard is quoted as saying.
“We need to hold on to it, see what needs to be done and find a thoughtful way out for the government.”
There were also worrying statements from Scott in yesterday’s Tribune Business. He said it was proving “very difficult” to assemble the necessary information all serious buyers will require, because the current owner, Hutchison Whampoa, was not being helpful.
Scott said the government’s desire to effect a rapid sale to the right buyer could be endangered if the sales prospectus is not released on time. He described completion of the sales prospectus as a “very, very high” priority.
“What we’ve got so far is not useful,” he is quoted as saying. “We have a draft from a consultant of the government that is not useful.
“We’re drilling down and trying to get copies of previous documentation, which is very difficult because Hutchison is not very cooperative. That (the sales prospectus) encompasses the state of the resort, so that encompasses detailed information on repairs and looking at estimates and things like that.
“You can’t do your due diligence and show the property to informed buyers until we have that, and we’re not getting the necessary cooperation from Hutchison. The information made available to me is of marginal utility.”
It is disturbing that the government has jumped into this situation wholesale without tangible information on what it has purchased.
Right-thinking Bahamians want a successful outcome for Grand Bahama, but the government needs to make decisions that make sense.
It is clear that government officials have not acted on much beyond their feelings about the plight the island and its residents face.
That is no recipe for success. That is a recipe for disaster.
Scott’s prediction that this resort will be sold by February seems overly optimistic and unreasonable, especially given his most recent comments about there not being a prospectus.
This is likely to amount to nothing more than a monumental waste of taxpayer money.
This is a huge gamble based on very little information. The government has jumped in head first and is only now trying to piece together some kind of plan. It seems likely that it will end up offloading the resort at a fire sale.
The costs associated with ownership will become even more burdensome as the months pass and the pressure builds for a new owner.
When he was in Grand Bahama last week, Prime Minister Dr. Hubert Minnis brought hope to straw vendors and others who operate at Port Lucaya across from the resort. He and his delegation even toured the International Bazaar with cameras in tow to highlight what they say could happen to the Grand Lucayan in the absence of government action.
But there was little Minnis could articulate in any tangible way.
While the prime minister might have done a decent job of selling hope to some Grand Bahamians understandably anxious for an economic resurgence, we all know the popular saying that hope is really no strategy at all.
The make-it-up-as-they-go strategy the government has adopted on this sale is deeply worrying. It has buried itself, and Bahamian taxpayers, in a deep, dark hole with not even a flicker of light at the end of the tunnel.
We appear to be in for a frightening ride.