by Richard Coulson

MP Chester  Cooper is parlaying his  successful financial career  into becoming  the PLP’s bumptious  shadow Minister of  Finance.  He loses no opportunity to castigate Prime Minister Minnis for his Government’s decision to buy the Grand Lucayan Resort, the  key to keeping Freeport viable as a tourist center.  Mr. Cooper fails to recognize that real governance often provides  no “good” solutions available , only several  “less bad”  ones.

Of course, it would have been wonderful if the Hong Kong conglomerate Hutchison-Whampoa had reopened  and revived the hotel complex, using insurance   proceeds to restore the effects of hurricane damage and long vacancy. But H-W had lost interest in Bahamian realty and chose to walk away, abandoning any loyalty to their once-upon-a time dream of promoting the area, and threatening the neighboring Marina Village with economic collapse.

As directed by a gutsy decision of the PM and Cabinet, last August Hotel Corporation Chairman Michael Scott used a special subsidiary to negotiate a buy-out price of $65 million from H-W.  Although a 50% share was taken as a purchase-money mortgage, the cost was still a major outlay for our cash-strapped Treasury, with no clear prospect for speedy resale.

But what was the alternative? It was unthinkable to let Grand Lucayan sink into permanent decay. The investment risk is proving its worth. Many buyers expressed interest in Grand Lucayan, and in March a letter of intent was signed to sell to the consortium of Caribbean Cruise Lines and the Mexican ITM  group of hotels cruise ports.

The sales price is just $65 million, so Government will suffer a net loss on the transaction after it has paid employee severance claims of over $7 Million and operating costs of roughly $1 million monthly until the expected closing date at end of September. However, this  loss is far outweighed  by the $195 million that the  buyers are committing to renovate the hotel and surroundings , plus linked improvements  to Freeport Harbour across the island – an over-all renaissance of Freeport and Grand Bahama as tourist magnets.

Despite Mr. Cooper’s dire fulminations, the initial $65 million bet is paying off,  and I am unaware  that he ever offered a rescue formula of his own.  Furthermore, the game need not stop there. With a more profitable outlook, Government can  now put the squeeze on Devco, the long-time partnership  between H-W and the family owners of Grand Bahama Port Authority (GBPA).  Devco’s expensive management of the GB Airport has often been challenged, with the argument it could be better run as a new venture similar to Nassau’s  Lyndon Pindling International. Devco has also been sitting for years on about 70,000  acres between the sea and airport, without finding any use for this prime property as an international wholesale center. Government is quite capable of acquiring and turning it over to  a more imaginative developer of commercial real estate.

When we add Carnival Cruise  Lines planned new cruise port in eastern Grand Bahama, we see  many reasons to scrap that relic of colonialism, the Hawksbill Creek Agreement signed in 1955, and reorganize the whole island under new governance, with or without basic administrative  tasks reserved for the GBPA.

The views expressed are those of the author, and not necessarily those of Weblog Bahamas (which has no corporate view).

First published in The Tribune and posted here with the kind permission of the author.