Despite assertions from the opposition to the contrary, Deputy Prime Minister and Minister of Finance Peter Turnquest believes the government can make a “significant return” when it eventually sells the Grand Lucayan resort in Freeport.
The government is purchasing the resort for $65 million; $30 million paid up front.
While on Guardian Radio’s “The Political Review” with host Quincy Parker and guest host Adrian Francis yesterday, Turnquest was asked based on the purchase price and estimated cost of repairs, whether he believes the resort is a good investment.
“When you look at the property it is a wonderful property, an absolutely beautiful, wonderful property, and I believe it has tremendous potential,” he said.
“The replacement cost for the property is well over $400 million.
“That is a fact. Adrian, I would go so far as to say if I had the money I would buy it.
“And I am not just saying that; I would buy it.
“First, there is a tremendous opportunity in the property value alone to get a significant return on that property.
“Secondly, you are sitting on the premier property in Grand Bahama.
“Yes, there is a lot of work that needs to go into turning around the destination, not the property.
“The property is not the problem. It is the destination that needs help in terms of relaunching and being creative, and creating a reason for people to come.
“And that is what we really have to work on.
“We have to work on reducing the cost for people to get to the island and the quantity of the people that we get to the island.
“But the product; the property itself; the opportunities for expansion; the opportunities for others to enter this industry in the allied fields is tremendous.”
Turnquest revealed last Thursday that the cost to renovate the resort and its properties would be nearly $39 million, but the government has yet to make a final determination on which areas of the property it would renovate.
A resolution to borrow $35 million from the resort’s owners – Hutchison Lucaya Limited and Bahama Reef Limited – to facilitate the purchase of the resort was passed on Thursday night.
According to a technical team, which compiled a report on the repairs and renovations needed to bring the resort up to optimum standards, it would cost $8 million to renovate Breaker’s Cay; $15 million to make repairs on Lighthouse Pointe, the convention center, offices and the back of house operations; and $15.5 million for Memories.
When Turnquest wrapped up debate, he said the government was in the process of finalizing what it believes are the necessary steps to ensure the property remains viable, including renovations and repairs, marketing and other operational support necessary.
Yesterday, Turnquest said there will be concerns and risks when entering into such an investment.
However, he added, “I am 100 percent comfortable with the decision that we have made”.
According to Michael Scott, chairman of the board of Lucayan Renewal Holdings Limited, the special purpose vehicle (SPV) established by the government, the government expects to sell the resort within three to six months.
Scott has said the SPV has begun vetting interested investors, but has not disclosed how many entities have expressed an interest and moved beyond the vetting stage.
When asked for more details, Turnquest said there are at least “a handful” or “almost two handfuls” of credible entities that have presented proposals and are in discussions with the SPV.
He said the SPV is vetting and testing those proposals.
“I am sure that in short order – I don’t want you to ask me what ‘short order means – [but] I am confident… that this property is going to be turned around and it is going to be a success story,” Turnquest said.