PM Minnis Contribution to Debate on Resolution to guarantee the purchase of Grand Lucayan
Sep 20, 2018 - 5:06:04 PM
Nassau, Bahamas - Contribution to the Debate on the Resolution to Guarantee the Purchase of the Grand Lucayan Dr. the Hon. Hubert Minnis Prime Minister Wednesday, 19 September, 2018:
I rise in support of this Resolution, a necessary and critical step in the rescue and renewal of Grand Bahama.
The redevelopment of Grand Bahama is essential for the ongoing economic recovery and development of the economy of The Bahamas.
I note at the outset that the Grand Lucayan Property includes three distinct hotel properties:
The Property referred to as Memories, the Lighthouse Point and Breakers Cay.
To clarify any misunderstanding there may be in the public domain, at present The Lighthouse Point property is currently open.
I often speak of the common good.
The common good means acting in the interest of all Bahamians, not just the interests of the residents of New Providence.
We must be equally committed to the needs of our Family Islands and the needs of Grand Bahamians, who are an integral part of our Commonwealth.
I note the sentiment of Michelle Dorsett of the Commonwealth Union of Hotel Services and Allied Workers union who represents the line staff at the Grand Lucayan, who said of the Government’s stance on the Grand Lucayan:
“We have to pull together, we cannot be divided.”
She went on to say: “We have suffered for too long and I thank the Government from the bottom of my heart for what they have done”
Under no circumstance could this FNM Government in good conscience allow Freeport or Grand Bahama to sink economically.
Let me make this point clear, the effects of the full closure of Grand Lucayan would be catastrophic, with a severe effect on Port Lucaya Marketplace and Marina and over 50 businesses located in Port Lucaya.
Millions of dollars would be lost from the economy of Freeport and Grand Bahama with the full closure of the Grand Lucayan property.
This would include economic displacement and loss for taxi drivers, straw vendors, restaurant owners and the many ancillary businesses that rely on the hotel.
Let me acknowledge at this point, the employees of the Grand Lucayan, who have endured during some very difficult times.
I commend also the many small businesses in Freeport and at Port Lucaya and the surrounding areas, who have endured with hard work and courage and determination.
This Government is acting to secure these employees and these small business owners, the future of their children, and the future of Freeport and Grand Bahama.
I say to all of those employees, businesses, taxi drivers, straw venders and to the entire island of Grand Bahama; a new day is truly beginning in Grand Bahama.
I note that with the purchase of the Grand Lucayan that the Government has provided for the continuation of the Union Agreement, and current employee contracts to ensure that the employees are fully protected.
While the Government did not have to do this, it was the right thing to do.
Here is how the payments are structured. The Government of The Bahamas “financed the initial Thirty Million Dollars ($30,000,000.00) of the Purchase Price for [the Grand Lucayan properties] by an advance from the Contingency Fund authorized by the Minister of Finance pursuant to Article 133 of the Constitution.”
Today’s Resolution: “Authorizes the Government of The Bahamas to guarantee the loan to LUCAYAN RENEWAL HOLDINGS LTD, in the said sum of Thirty-Five Million Dollars ($35,000,000.00) for the purpose of paying the balance of the Purchase Price of the Properties pursuant to the Sales Purchase Agreement …”
The assets of the Grand Lucayan that are being purchased include:
- Approximately 1,270 hotel rooms and suites;
several restaurants and lounges;
several meeting rooms
One golf course;
A casino; and
Many have asked why did the Government make this decision.
We were faced with certain options with the full closure of the Grand Lucayan.
We could let the Lighthouse Point, the last remaining open section of the hotel, close.
This would lead to the economic collapse of much of Freeport, with even higher unemployment, greater despair and a loss of hope for many Grand Bahamians for many more years.
In essence, we could sit idly by and watch the Grand Lucayan sink into a state of disrepair, becoming a ghost town like the once vibrant but now dying International Bazaar, which is a shell of its former self.
The Royal Oasis hotel has been closed for several years, at that time no government intervened to save the hotel from closing or to act to reopen the hotel. The people of Grand Bahama know too well what damage inaction can cause.
On the other hand we could have entered into an untenable agreement with a private entity seeking endless concessions, which would not serve our national interests.
We have been down that road before.
In the operation of the Grand Lucayan under the last PLP Government, the PLP granted combined subsidies to Hutchinson and Sunwing, which would have totalled approximately 21 million dollars annually for a period of at least 7 years.
This would have amounted to the payment of over $147 million.
In 2013 the PLP agreed to pay Sunwing, subsidy for electricity, consumables imported, freight charges, and insurance. Did the PLP ever table this document?
The PLP was content to pay out these subsidies with no equity in the Grand Lucayan, and with little to no prospect for the rebranding and redevelopment of the property.
To continue such a massive subsidy would have been a mistake.
It was because of Hurricane Matthew that this arrangement ended.
I find it amazing that the Leader of the Opposition, whose party arranged this deal when they were last in government, is now offering financial and other advice about the future of the Grand Lucayan.
The PLP had no plan for the Grand Lucayan and Grand Bahama during their last time in office...
To read full PM Minnis' HOA Contribution, Resolution to Guarantee Purchase of Grand Lucayan see attached
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