‘A dire situation’
Hundreds on Grand Bahama are now jobless following the closure of more than half of the island’s storm-damaged businesses, with over 60 percent of impacted businesses uninsured or underinsured and over 4,000 buildings in Freeport city damaged, inclusive of approximately 1,500 homes, according to figures provided to Perspective by the Grand Bahama Chamber of Commerce and the Grand Bahama Port Authority (GBPA) respectively.
Unprecedented storm surge inundation during Hurricane Dorian decimated significant segments of Freeport’s business sector, leaving behind a staggering trail of destruction along Queen’s Highway’s medium and large business district moving south and east to the downtown district and beyond, where scores of small and medium-sized businesses were gutted.
According to Chamber President Gregory Laroda, a preliminary and ongoing survey of businesses revealed that 90 of 163 business respondents (55 percent) were closed, shedding 336 employees.
A total of 1,494 workers were employed by the 163 businesses prior to the storm.
Without employment, the options for recovery on the part of Grand Bahamians are slim, as rebuilding and repairing homes will require finances whether or not one’s home is insured.
Within the city of Freeport, there are 2,800 licensed businesses, according to GBPA President Ian Rolle, who advised that of the 600 licensees assessed by Freeport’s regulator as of September 27, 50 percent sustained damage — a trend consistent with that captured by the Chamber.
One hundred and three businesses (63 percent) are uninsured or underinsured, 13 businesses do not plan to reopen or are uncertain of the same while over 50 percent reported major or catastrophic damage, according to the Chamber’s survey.
“These statistics tell of a dire situation unfolding requiring our collective and urgent response,” Laroda stressed.
“We expect some of the numbers – most notably the unemployment — to increase even more [and] in fact many surveyed were not sure how long they could maintain their employment numbers.”
Laroda indicated that survey trends are remaining consistent as more businesses are assessed, sounding the alarm that further losses are anticipated if a focus is not placed on “retaining pre-storm employment, mobilizing those businesses trying to reopen and prioritizing buy at home goods and services over ‘at border’ incentives to rebuild our already fragile economy.”
Topping the list of needs frequently cited by impacted businesses are duty concessions and VAT waivers for re-building and the replenishment of equipment and inventory; that the entire island be granted the same concessions as east Grand Bahama and Abaco; GBPA business license fee concessions; mold remediation; and access to capital particularly in an effort to maintain payroll.
Back on September 22, Prime Minister Dr. Hubert Minnis announced that east Grand Bahama, Abaco and surrounding cays would be designated as Special Economic Zones, granting a range of incentives including access to $10 million in government guaranteed loans and tax free concessions on the re-building of homes and businesses.
The announcement was met with immediate criticism as Freeport, Grand Bahama’s commercial center, was excluded from the designation, making it ineligible to access those incentives that do not already exist for most in Freeport’s bonded area.
Upon the government’s return to Parliament last Wednesday, Minnis advised that the incentives will be extended to the entire island, but only for one year as opposed to the other areas that will benefit for a minimum of three years.
Given the scale of the devastation in Freeport, the role of Freeport in the commercial viability of Grand Bahama and considering that the island is still struggling to rebound from major damage caused by Hurricane Matthew three years ago, the government’s one-year decision for Freeport and the west is inexplicable.
It will take more than a year to rebound from this tragedy, and an almost sure way to stifle recovery is to too quickly seek to extract taxes from storm-ravaged businesses and homeowners struggling to rebound from catastrophic losses.
Also inexplicable given the urgent need to preserve jobs, businesses and home ownership was the government’s return to Parliament without its proposed legislation to create the special economic zones and provide for the foreshadowed concessions.
When questioned by Perspective on when a tabling of the requisite bills can be expected, Finance Minister Peter Turnquest said it “should be” this week.
We meantime questioned Rolle on whether GBPA would be deferring license fees and offering other forms of incentives to stimulate recovery in Freeport.
“We will make a public announcement of the incentives we will offer to the GBPA licensees upon completion of our assessment,” he said.
No timeline was given on when GBPA’s assessments are expected to be completed.
Meanwhile, already limited business activity on the island post-Dorian is further constrained by a continued closure of the Port Lucaya Marketplace due to owner claims of significant storm damage and air conditioning failures at the Grand Lucayan’s Lighthouse Pointe.
Airport reconstruction timeline still unknown
As has been previously expressed, economic recovery without Grand Bahama International Airport is not a realistic proposition.
Without appreciable airlift to provide stopover visitors, the island’s tourism plant and businesses connected to it cannot be sustained.
The airport — a joint venture between Hutchison Whampoa and GBPA — was destroyed in the storm with no indication made public on when reconstruction is expected to commence.
With the loss of the airport also came the loss of United States pre-clearance for the island.
“We have been in communication with U.S. officials concerning the pre-clearance facility in Freeport, and [were] informed that they will return once a terminal facility is in a proper condition to receive them,” GBPA Vice Chairman Sarah St. George said in response to Perspective’s questions on the status of the airport.
The airport, according to St. George, sustained catastrophic damage and unprecedented flooding of some eight to 11 feet of tidal surge to its terminals, rendering all buildings inoperable.
“Customs and Immigration are providing clearance services from a tented area for which we are very grateful,” she noted.
“The island’s current priority is to reopen the airport to international commercial flights, which will require meeting certain international regulations standards such as TSA (Transportation Security Administration) approval in the United States.”
Last week, the Grand Bahama Airport Company (GBAC) in a statement said temporary modular buildings have been installed and will soon be used to house administration, flight operations as well as ticketing and baggage collection and distribution.
“Airport officials want to stress they are immediately focused on continuing to provide safe and secure flight operations, but given the extent of the damage, amenities to improve the customer experience will be on the back-burner,” it advised.
GBAC said it is targeting the start of direct flights to and from Fort Lauderdale in November pending approval from TSA.
Without an airport facility that satisfies U.S. security standards, it is uncertain whether this target would be approved.
As calls from the business community continue for a speedy start to the airport’s reconstruction, concerns are swirling on island about whether Hutchison Whampoa is desirous of funding a rebuild of the airport considering, in part, its positions taken with the Our Lucaya properties following storm damage in 2016.
In response to our question on GBPA’s position regarding Hutchison’s intention for the airport’s reconstruction, St. George replied, “We can confirm that the Grand Bahama Airport Company, the Grand Bahama Port Authority, Hutchison Whampoa, and the government of The Bahamas are working together to ensure this is done urgently and efficiently, in these very difficult circumstances created by Hurricane Dorian.”
But the concerns have not only centered around Hutchison’s intentions.
In a recent letter to the editor, local attorney Terence Gape suggested that the St. George and Hayward families might seek to claim lack of funds on their part if reports regarding Hutchison’s intentions prove true.
He recommended that the government should “immediately commence talks with the Port Authority (the families)” to obtain from them an agreement that insurance proceeds be fully utilized in urgent rebuilding of the airport and an agreement that proceeds from the recently announced Carnival Cruise Lines deal be held in escrow to “finance the shortfall of cash to insurance proceeds” needed to design and build the airport’s international and domestic terminals.
To this, St. George said, “It is unfortunate that individuals are making such negative comments without facts. As stated previously, the Grand Bahama Port Authority, the government of The Bahamas and Hutchison are working together to ensure that the airport is reopened to receive international traffic as expeditiously as possible.”
No potable city water
Potable city water to the island has not yet been restored since the passage of Hurricane Dorian, with GBPA’s president revealing that a timeline for the resumption of potable city water supply by the Grand Bahama Utility Company cannot yet be determined.
Though test results indicate that the water being delivered to about 80 percent of customers is free of bacterial contamination, high salinity and water hardness levels make the water unfit for drinking or food preparation.
This not only poses challenges to businesses that require potable water to resume operations, but it also poses health risks as notwithstanding advisories against consumption of the city water, residents are likely to do so because the water is flowing through their taps and is therefore easier to access than free public water depots provided by the Utility Company and GBPA.
“The storm brought about [an] unprecedented amount of saltwater to our well fields,” Rolle pointed out. “In the short-term solution we have engaged the services of expert hydrologists to assess the situation of the high salinity content in our water.
“We would then take action upon the report we receive from these experts, therefore, we cannot say at this moment the timing of when the salinity will get to a state where the water is potable.”
Businesses are fighting to survive
When Perspective visited businesses in the downtown and Queen’s Highway districts, the familiar hum of generators filled the air as several proprietors and managers attempted to provide what services were possible given the extent of the damage suffered.
Kelly Russell, proprietor of H&L School Supplies and Bookstore downtown, stood inside her gutted shop space with the lone employee she has left on staff.
Though she is insured and plans to reopen, she acknowledges that rebuilding is akin to starting again from scratch.
“I am going to come back because the Grand Bahama community has been really great to us over the years,” she said. “I just have one person now because at this point there is no income so you are just paying out of what you already had, but I will try to work with the one person until we can get back up and running.”
A short distance away at FDK Laminators and Digital Imaging, Store Manager Kirk Smith was sifting through inventory amidst piles of damaged equipment.
“Every day you are not able to service your community you’re losing money,” he reasoned. “I am still serving people as they come in to provide whatever limited services we can do.”
When questioned about the company’s ability to hold onto staff after the storm, Smith said, “The staff understands, so there is a balance here. They have been supportive in us trying to get this place back up and they have assisted in the cleanup and restoration. We are all in this together.”
Dolly Madison Home Center on Queen’s Highway suffered catastrophic damage, as did other businesses in the vicinity, and has since downsized to a smaller facility several blocks from its original location.
Store Manager James Rolle said the company’s limited inventory for now mainly consists of essential building and reconstruction materials to facilitate the needs of homeowners and businesspersons.
“The main store is going to take a long time [to] get up and running and then there are some other considerations that are being given as to whether we can operate the main store as it was originally laid out structurally,” Rolle revealed.
“Unfortunately, we reduced our staff last Friday by 22,” he added. “We had several of our staff who were displaced by the storm who moved elsewhere but out of the 63 full-time employees prior to Dorian, we now have 39 of those persons working.”
For its part, Chamber President Laroda said the organization has made some “critically specific recommendations to the government” that it feels will arrest the unemployment and get businesses back online as soon as possible. The vast majority of respondents to the Chamber’s survey, some 86 percent, said they planned to reopen – a testament to the resilience and dedication of the island’s business people.
“We will share those recommendations in due course,” he assured. “In the meantime, we look forward to working with our government at the earliest possible opportunity to put tangible assistance and resources in place so that we can all truly move forward, upward, onward, together.”