Prime Minister Dr. Hubert Minnis said on Friday that the government will ensure that the Royal Caribbean International (RCI) development project slated for Grand Bahama will come to fruition.
In March, the government 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 first phase of the development is projected to cost $195 million over two years with the creation of approximately 2,000 jobs.
Minnis made the promise while giving remarks during the official opening ceremony of “Perfect Day at CocoCay”, the $250 million RCL cruise port just off Great Harbour Cay, the Berry Islands.
He noted that during a tour of the island, he and RCI President and CEO Michael Bayley “had a brief discussion about Grand Bahama, and we came to an agreement that we will see to it that Grand Bahama comes to fruition”.
He told reporters on the sidelines that while he did have a “very great conversation”, he was concerned about how advanced the Grand Bahama negotiations were.
“We’ve come, basically, to an agreement that yes, Grand Bahama will evolve, yes, Grand Bahama will flourish, yes, they will do everything but it’s still in the negotiation stage at this particular time,” Minnis said.
“But I’m convinced that Grand Bahama will flourish and the project will move forward.”
The government purchased the resort last year for $65 million, with $30 million paid upfront.
In December 2017, Paul Wynn, of Canadian real estate development company Wynn Group, signed a LOI with Hutchison Whampoa for the sale of the property.
At the time, the government said the approval stage and formal discussions with the Wynn Group would be finished by February 2018, but no update was given on the status of the sale.
It was the second time Wynn had signed a LOI with Hutchison Whampoa.
The government’s decision to purchase the property came after talks with the parties collapsed.
Wynn said he thought the final purchase price negotiated, of $65 million, was too high.
He said it could take between $110 million and $120 million to open the doors of the Grand Lucayan to guests.
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.
Asked on Friday what RCL is considering for Grand Bahama, Bayley said, “I can’t say. What you see here is what we are capable of creating. What you see over there with the largest ship in the world is what we are capable of creating. We will bring the same intelligence, creativity and design to the Freeport project. We would never announce what we are going to do until we’ve been through the [government] process.”
He noted that there are about another 30 or 40 days left in that process.
Bayley added that while RCI’s activity in The Bahamas has an economic impact of about $300 million annually, the Grand Bahama project is projected to be “hugely significant”.
“Just the fact that we are going to redevelop those hotels and beach, that whole area is going to be in the hundreds and hundreds of millions of dollars,” he said.
“The amount of work that will be underway to regenerate that destination, it’s going to be a few years, hundreds of millions of dollars, massive project work and I think the economic impact is going to be huge.”
Tourism Minister Dionisio D’Aguilar has said that it will take six months for the government to complete a heads of agreement with RCL and ITM.
On Friday, D’Aguilar said that the talks are progressing “very nicely”.
“Obviously, they are continuing with the due diligence of the project, still determining what it is they are buying,” he told reporters.
“…We are beginning negotiations for the heads of agreement and the concessions that they think they might need to make the project viable, so it’s progressing. It’s in the negotiations stage and there’s nothing further to report other than we’re still negotiating.”