Thursday, Oct 17, 2019
HomeHome$30 mil. up front for Grand Lucayan

$30 mil. up front for Grand Lucayan

Chairman of the Hotel Corporation of The Bahamas Michael Scott revealed yesterday that the government will pay another $20 million toward the purchase of the Grand Lucayan resort and take out a three-and-a-half-year mortgage for the remaining $35 million.

The government has agreed to purchase the resort for $65 million.

Scott wouldn’t say when the $20 million would be paid, but The Guardian understands the payment is to happen soon.

Scott is the chairman of the special purpose vehicle (SPV) board, which is seeking a buyer for the resort.

“We are putting $20 million up so that is it, $30 [million] and then $35 [million] of it is on mortgage,” Scott said.

“That is over three and a half years.

“Within the next six months, I hope to have an investor that will take that out.

“I have been meeting with investors. We are screening people. This is a very thorough exercise.”

When the government signed a sales agreement with Hutchison Whampoa last month, it made a down payment of $10 million, Prime Minister Dr. Hubert Minnis said.

The sale was expected to be finalized tomorrow, but Scott said the government has to “issue a guarantee under the agreement of sale for that part of the purchase price which is going to be left for mortgage”.

In order to issue a guarantee, Scott noted that the government will have to seek a resolution in the House of Assembly.

The House is currently on break and will not meet until September 19.

Regarding the guarantee, Scott said, “If you buy a house, you pay some of the money upfront and you leave part of it on a mortgage. Because the purchaser is a special purpose company vehicle, the seller can require the owner of that special purpose vehicle, in this case the government and the Hotel Corporation, to guarantee the mortgage.”

Scott said the SPV is going to extend the completion date of the sale until September 19 or shortly after “to allow the resolution to be obtained”.

Last week, Opposition Leader Philip Brave Davis said the government ought to make public the full details of the resort purchase as well as the operational strategy and business plan.

But Scott shot this down.

“Nobody in their right minds would expect you to disclose the details,” Scott said.

“This is a stupid argument that Brave Davis is making that we should be going to the House and disclosing who we are meeting with and what the details are. Only a jackass would do that.

“If you start giving out details of interested purchasers, you scare them off and you are going to prejudice any other offers coming in.

“When you are at a very crucial delicate stage of discussions, nobody discloses the details of negotiations because there are many things on the table, many variables. A deal is not a deal until it is a deal.”

Davis said the government should disclose a structural engineering and a quantity surveyor’s report before committing the Bahamian people to a $65 million debt.

The Grand Lucayan, which is made up of three hotels – Breaker’s Cay, Memories and Lighthouse Pointe – closed its doors in 2016 after being damaged by Hurricane Matthew.

Only Lighthouse Pointe reopened.

When Minnis announced the purchase of the resort, he stressed that his government has no interest in running hotels, but does have deeply vested interest in saving the jobs of Grand Bahamians, those who are employed on the Lucayan strip, and ultimately saving the economy of Grand Bahama.

The prime minister has said the government might open Memories hotel.

Travis Cartwright-Carroll

Assistant Editor at The Nassau Guardian
Travis Cartwright-Carroll is the assistant editor. He covers a wide range of national issues. He joined The Nassau Guardian in 2011 as a copy editor before shifting to reporting. He was promoted to assistant news editor in December 2018.
Education: College of The Bahamas, English

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