It will take six months for the government to complete a heads of agreement (HOA) with Royal Caribbean Cruises Ltd. (RCL) and the ITM Group for the sale of the Grand Lucayan resort on Grand Bahama, Tourism Minister Dionisio D’Aguilar said yesterday.
The government purchased the resort last year for $65 million, with $30 million paid upfront.
On Wednesday, the government signed a letter of intent with RCL and ITM for the purchase of the resort and the redevelopment of the Freeport Harbour. The two companies are expected to pay $65 million.
“It’s probably three to six months to get it completed,” D’Aguilar said.
“It’s a due diligence period and then you have to negotiate it. So, I‘d give myself on the outside of six months, but hopefully earlier.”
When asked when the resort will be sold, the minister said, “Soon.
“You have a due diligence period, a period for negotiation of the HOA, a period for the preparation of the purchase agreement and a period to close and transfer assets.
“I say again: In the quickest possible time.”
He said negotiations with RCL and ITM are expected to “start right away”.
On Wednesday, the government said that the proposed joint venture between RCL and 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”.
In a statement later that day, Progressive Liberal Party (PLP) Chairman Fred Mitchell said the announcement should be met with caution because “this is the FNM (Free National Movement) government we are dealing with”.
But D’Aguilar shot that down, asserting that the opposition is trying “to find fault as the opposition does with what I think is a great deal”.
“They’re trying to find fault in anything that they possibly can,” he said.
“You know, we have been very successful in bringing reputable investors to the table. We’re obviously in the negotiation period with all of them and we remain optimistic that deals will be done and the economy of Grand Bahama will begin to come alive.”
The first phase of the development is expected to cost $195 million over two years with the creation of approximately 2,000 jobs.
According to ITM’s proposal, the Grand Lucayan resort complex will be redeveloped into an area called Lucaya Island at a cost of $30 million.
It also proposed the upgrade of the port’s docking facilities at a cost of $35 million and the provision of multi-modal transportation between the proposed Harbour Village and Lucaya Island at a cost of $9.8 million.
ITM’s proposal also suggested that two million cruise passengers per year could be gained by these attractions, and said passenger spend could be about $180 million per year.
The government received 62 expressions of interest and 11 letters of offer for the resort.
But on March 22, 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.