NASSAU, BAHAMAS — The previous lead negotiator of the committee to sell the Grand Lucayan Hotel yesterday suggested the negotiation to finalize the sale of the resort are dragging on because the customer requires substantial commitments from the federal government on the event and reconstruction of the Grand Bahama International Airport.
Michael Scott said: “What’s critical in finalizing any agreement are government guarantees on the development and refurbishment of the airport in Freeport.
“Any investor with any degree of skill or ability just isn’t going to speculate mega tens of millions in a project and there isn’t any proper staffed, modern constructed airport facility which is able to accommodate pre-clearance and enable the conventional trafficking that happens with visitors out and in without having to transit via Nassau and being, if my information is correct, restricted to possibly one flight a day or simply several per week. That’s not the strategy to feed a hotel.“
Scott’s comment to Eyewitness News comes after his successor Julian Russell, the present chairman of the Lucayan Renewal Holdings Limited, said in a press release yesterday that the sale of the resort is steadily progressing toward completion but that the parties have agreed to a 45-day extension to finish essential legal documentation.
Russell said renovations are anticipated to start during January 2023.
The federal government announced in May that Lucayan Renewal Holdings LTD made an agreement with Electra American Hospitality Group to purchase the Grand Lucayan Hotel for $100m.
Minister of Tourism, Aviation, and Investments Chester Cooper said the agreement was subject to a 60-day due diligence period, with closing no later than 120 days.
Cooper also said in June that three credible investors expressed interest in redeveloping the Grand Bahama airport. He said a world-class facility, when accomplished, will increase airlift to the island.
Scott nonetheless believes that without guarantees on the airport, the initial announcement concerning the take care of Electra could have been premature.
“I believe that government in its anxiety to announce excellent news could have been a bit premature, that’s my hunch,” he said.
“Every little thing is dependent upon a selected commitment to reconstructing the airport and modernizing that facility inside the subsequent couple of years. Minus that these negotiations could thoroughly stumble and fail as happened to my committee once we were negotiating the sale of the hotel to the RCl/ITM syndicate. I can’t consider every other rational reason for the delays.”
Scott continued: “One has to assume that whatever the politics involved that governments act rationally and they have to know In the event you don’t make ironclad commitments otherwise you don’t take the time or do as the federal government did with the Vancouver company to create the present model and structure of LPIA, they might be at the tip of their five-year term in no higher position than we were when it comes to any kind of economic and financial renaissance of Grand Bahama.
“My view may be very much to attend and see and I believe that the media and anxious stakeholders, people within the resort and touristic sphere within the Grand Bahama economy should just give the federal government a bit more time.”
“My sources tell me that doing the kind of job that will turn the airport right into a state-of-the-art airport, bearing in mind that a number of the buildings could have to be removed because they’re too low, I believe when it comes to the budget for a correct redeveloped airport facility’s you’re about $80m.
Scott said: “Given what’s happening within the markets and the world economy and the prospect of particularly the North American world being on the cusp of a recession, the one way in my opinion that might be logically progressed is to either do it as a three way partnership or get some international funding from the IDB or world bank or something like that.
“I think the investor just isn’t getting the kind of guarantees they need and require as a way to put their very own funding in place and go ahead with the project. Those guarantees would have to return from the federal government and the logical way that will be advanced is thru a heads of agreement.”