Grand Bahama News

Another big let down for Grand Bahama

Collapse of Grand Lucayan deal leaves many disappointed

After six months of waiting to hear that the Grand Lucayan resort was finally sold, Grand Bahamians were left disappointed with more questions than answers, when Lucayan Renewal Holdings (LRH) announced that the deal for the hotel’s pending purchase had collapsed.

In May, Deputy Prime Minister and Minister of Tourism, Investments and Aviation Chester Cooper, and Minister for Grand Bahama Ginger Moxey announced that the government had accepted Electra America Hospitality (EAHL) Group’s offer to purchase the property for $100 million and that Electra had committed to a $300 million development of the resort.

He said Electra America Hospitality would create 2,000 construction jobs and 1,000 permanent jobs.

Officials said Electra had a 60-day due diligence period and closing would take place no later than 120 days, but there were multiple extensions to the due diligence period.

In a statement last week, Lucayan Renewal, the special purpose vehicle established by the government to sell the property, announced that Electra advised that “shifting global capital markets and related inflationary pressures resulted in higher construction costs and costlier access to credit”.

LRH said accordingly, the company had difficulty securing development financing at terms that would allow it to fully execute the vision outlined in its business plan.

It was not the kind of news many Grand Bahamians had been anticipating.

“This is another big let down for Grand Bahama,” said Gretchen Flowers, 45, a straw vendor.

“We (vendors) were waiting to hear that the hotel was sold, even though we were hearing about one extension after another. I still held out hope trusting that the government would finally come through for Grand Bahama this time.

“Vendors, shop owners, taxi drivers, hospitality workers on this island have been suffering for too long. It is like, when is Grand Bahama going to catch a break?”

Flowers recalled three months after taking office last year, the Davis administration canceled the deal between the government and Royal Caribbean Cruise Lines/ITM Group for Grand Lucayan resort, which had been entered into by the Minnis administration.

Cooper said at the time the deal with RCL was not in the best interest of Grand Bahamians.

“Well, it appears as though this deal was not in our best interest either,” Flowers said.

Veteran taxi driver Elmina Smith was also looking forward to the sale and redevelopment of the hotel.

“Drivers have been financially challenged for more than a decade now in Grand Bahama,” Smith said.

“This economy continues to struggle. Having the news of a potential buyer with all the fanfare during the announcement earlier this year was a sign of hope.

“But then, it kept getting put off, so it made you wonder what was really going on; however, you still wanted to believe this time around will be the charm. Unfortunately, again, we are left disappointed, holding an empty bag.”

Smith is hopeful though that the construction of Carnival Cruise Line’s multi-million-dollar cruise port ongoing at Sharp Rock, East Grand Bahama, continues smoothly.

“That is some hope for Grand Bahama in the next few years, but we need something now,” she said.

The Minnis administration bought Grand Lucayan from Hutchison Whampoa in August 2018 for $65 million.

While many Grand Bahamians remain hopeful that the island’s economy will soon turn around, LRH executives said discussions are now taking place “with a well-capitalized entity” that has expressed its interest in acquiring Grand Lucayan resort.

Cooper said an announcement will not be made regarding the new entity until a deal is reached with the new entity.

“I believe that the government was just excited that something was going to happen for Grand Bahama under their watch and that’s why they made a big deal of the pending sale,” said a craft vendor, who only gave her name as Chrystal.

The 33-year-old, who has worked in the business with her mother since childhood, added, “They did not wait to make sure everything was signed.

“I know what it is like to make money in this business and right now that is not happening. People in the tourism business are barely making it, and to have the hotel deal fail is another dark day.

“We are getting hardly any boats in, while, in Nassau, the harbor is crowded. I think serious attention must be paid to build this island’s tourism business.”

Cooper said the government is committed to improving the circumstances on the ground in Grand Bahama.

“So, what I am saying is, yes, we are committed to making a transaction happen at the Grand Lucayan, but we’re not sitting waiting for it,” he said.

“We are doing things to enhance the economy right now and we are working on other developments for the island of Grand Bahama.”

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