Progressive Liberal Party (PLP) Deputy Leader Chester Cooper yesterday questioned the numbers in the recent announcement that a sale for the Grand Lucayan hotel has been negotiated.
Cooper said he’s hoping it all works out for Grand Bahama’s economy, but he doesn’t understand how the announced investment will create thousands of jobs when other developments have invested more and created fewer jobs.
The Office of the Prime Minister in Grand Bahama said that Lucayan Renewal Holdings Ltd. 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 announcement said the first phase of the $195 million development is expected to create 2,000 jobs over two years.
During a constituency meeting in Bimini, Cooper pointed out that the prime minister failed to address the Grand Lucayan matter in his recent national address but just days later an LOI was signed.
“They say Royal Caribbean plans to invest $195 million and that should create 2,000 construction jobs. That sound a little low to me but, OK,” Cooper said.
“If we look at it, and they pay $65 million for the hotel, that means that the investment in development is really $135 million. That don’t sound like enough to create 2,000 jobs in two years.
“When we look at investment at The Pointe and the Wynn development in Nassau, they actually are spending more, but didn’t create that kind of employment for Bahamians, this is curious stuff [they’re] talking about.
“As it stands now, it seems like a whole lot of spin. Nothing but a letter of intent has been signed. No hotel has been sold, no commitments have been made.
“Also, I have to ask if this means that Royal Caribbean will reduce its number of calls in Nassau as a result of this.
“Will it mean real new money in the economy?
“Or will it simply mean those visitors will go to Grand Bahama instead?
“Yes, Grand Bahama needs investment, but is it meaningful investment?
“Because last I checked, cruise ship passengers don’t stay in hotels.
“Is there a plan to increase airlift on Grand Bahama to get paying guests in the hotel?
“Where are the guests going to come from?
“And how will the rest of Grand Bahama benefit if all the attractions are contained in the Royal Caribbean compound?”
Cooper again urged the government to reveal the total cost it has poured into the Grand Lucayan resort.
“So, the government pays $65 million for the hotel and for the closing costs for the sale and pays millions for renovations, and pays for back pay for the employees and separation for the line staff, and now separation for the managers,” he said.
“And Royal Caribbean just comes in and picks up the hotel and the port and is on the hook for nothing.
“The government must also explain as we asked them before, how much are the Bahamian people on the hook for and how much will they write off.
“I predicted before that the government would spend well in excess of $100 million, which, if my calculation is correct, would equate to a write-off of tax-payers’ money of at least $40 million dollars.
“I gotta tell you, I’m skeptical.
“If [this] deal ends up helping the people of Grand Bahama, I’m all for it. But I don’t trust the FNM (Free National Movement).
“Every time you hear about a deal, one of their fat cat friends isn’t too far behind.
“Every time you see an FNM sign a contract, you better read the fine print, some darkness is probably behind it.
“I need to see the details and then I will have more to say. I am concerned about what they didn’t tell us.
“I can’t wait to see this heads of agreement.”
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.
It still remains unclear how much was paid out for the line staff and how much will be paid out to managers.
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.