Lucayan Renewal Holdings Ltd. yesterday signed a letter of intent (LOI) with Royal Caribbean Cruises Ltd. (RCL) and the ITM Group for the purchase of the Grand Lucayan resort on Grand Bahama for $65 million and the redevelopment of the Freeport Harbour, the government said.
“The proposed joint-venture project between RCL/ITM will include the redevelopment of the Grand Lucayan resort into a world class destination, featuring water-based family entertainment, with dining, gaming and entertainment options, and five-star hotel accommodations,” the Office of the Prime Minister Grand Bahama said in a statement.
“The redevelopment of the Freeport Harbour is anticipated to result in a significant increase in cruise ship arrivals, bringing approximately an additional two million passengers annually to Grand Bahama.”
The first phase of the development is projected to cost $195 million over two years with the creation of approximately 2,000 jobs.
The ITM Group said it is “committed to co-develop with RCL a world class destination and a leading cruise port hand-to-hand with The Bahamas government”.
Royal Caribbean International CEO Michael Bayley said the redevelopment of the Grand Lucayan has tremendous potential to significantly boost tourism in Grand Bahama.
“Royal Caribbean is committed to working closely with local partners to create a transformational experience for visitors,” Bayley said.
“We thank our partners at ITM and the government of The Bahamas for their support and collaboration as we work towards this exciting opportunity.”
On Friday, the board of directors of Lucayan Renewal Holdings, a special purpose vehicle charged with finding a buyer for the resort, unanimously approved a resolution to recommend to Cabinet the sale of the resort to RCL and ITM.
This came after 62 expressions of interest and 11 letters of offer were received for the resort.
The Office of the Prime Minister Grand Bahama said, “Discussions leading to a heads of agreement, which is subject to the approval of the National Economic Council, will begin immediately on matters related to Bahamian employment requirements and Bahamian participation in specific areas. Bahamians are slated to enjoy significant ownership participation in restaurants, retail stores, transportation and watersports.”
The government and the two companies are set to begin “exclusive negotiations” for the resort.
However, it is unclear when those negotiations will commence.
The government purchased the resort last year for $65 million, with $30 million paid upfront. Before the resort is sold, the government has to resolve any outstanding voluntary separation packages (VSEPs) for staff wanting to leave.
Line staff at the resort received their payouts last month and the government is currently negotiating the terms of VSEPs for the managerial staff.
The assets purchased by the government include 405 acres of land; seven buildings containing seven million square feet of space; 1,271 rooms and suites; 19 restaurants and lounges; 15 meeting rooms; 45,000 square feet of meeting space; three pools; an 18-hole golf course; a casino; a spa and a fitness center.
In February, The Nassau Guardian revealed that the ITM Group was proposing a $130 million overhaul of the Grand Lucayan resort and Grand Bahama’s cruise port.
According to the group’s proposal, the Grand Lucayan resort complex will be redeveloped into an area called Lucaya Island with a cost of $30 million. The redevelopment will include a waterpark, convention facilities and resort accommodations.
It also proposed to upgrade the port’s docking facilities at a cost of $35 million and provide multi-modal transportation between the proposed Harbour Village and Lucaya Islands at a cost of $9.8 million.
ITM’s proposal also suggested that the increase in cruise passengers each year could lead to roughly $180 million in visitor spending each year.
Yesterday, Tourism Minister Dionisio D’Aguilar said, “It is my sincere hope that Bahamians, and in particular, Grand Bahamians, will take advantage of the opportunities being created not only for employment but for self-employment.
“I want to see young people achieving their dreams of owning a business that will serve the visiting public as well as Bahamians.”
He also said the government will do “all in its power” to increase the number of visitors to Grand Bahama and to ensure that that increase in visitor traffic will result in a boost to the economy.
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