03172023 BUSINESS

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$200m airport deal means GB ‘not dead in the water’

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A PROMINENT Freeport attorney yesterday hailed the “lifeline” provided by Grand Bahama airport’s imminent $200m redevelopment, saying: “We’d be doubly dead in the water without it.”

Terence Gape, a partner with the Dupuch & Turnquest law firm, told Tribune Business that numerous multi-million dollar investment projects targeted at the island were reluctant to proceed without the security of knowing there would be an airport capable of facilitating the

DPM: ‘Three credible offers’ for Lucayan

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THREE “credible offers” to acquire the Grand Lucayan resort are presently being studied, the deputy prime minister said yesterday, as he and others touted $1bn worth of investments being “in the pipeline” for Grand Bahama.

Chester Cooper, also minister of tourism, investments and aviation, told the Grand Bahama Business Outlook conference that the Government was most concerned that any chosen buyer possesses the financing to develop the island’s so-called ‘anchor

property to a “world class standard”.

Having heavily touted the previous Electra America Hospitality Group deal, only to subsequently see it collapse and have to begin the buyer search anew, he indicated the experience had been a lesson learned, adding: “I ain’t saying

nothing else until money is in the bank.”

While not naming any of the three potential purchasers, Mr Cooper told attendees: “It is critically important to this government and Grand Bahama that we find a buyer for the Grand Lucayan resort. Far too much money has been spent, and far too many opportunities await us not to have this on our agenda.

“I’m advised by the chairman of Lucayan Renewal Holdings [Julian Russell] that there continues to be considerable dialogue and interest in this resort. We recently received three credible

SEE PAGE B7

Property value boost drives insurer’s 39% profit increase

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

A $3.2m gain from revaluing its property assets enabled Bahamas First to shrug off a decline in its core insurance underwriting business and post a 39 percent total comprehensive income increase for the 2022 full-year.

The property and casualty insurer, unveiling its unaudited financials for the 12 months to endDecember 2022, revealed that underwriting income fell by more than $3.5m or 11 percent year-over-year to $29.404m compared to $33.031m the prior year.

Patrick Ward, the BISXlisted carrier’s president

and chief executive, said the “material dip” was caused in part by an increase in Bahamian motor vehicle accident claims as more motorists returned to the roads post-COVID. He also cited continuing issues with the company’s Cayman Islands health insurance portfolio that it is now moving to address.

And, while Bahamas

First’s top-line gross written premiums rose by 7.3 percent in 2022 to $191.2m, Mr Ward bemoaned the fact this growth could have been higher but for reduced reinsurance capacity which prevented the underwriter from taking on more new business.

SEE PAGE B4

Port chief eyeing Abaco power cable connection

By NEIL HARTNELL and FAY SIMMONS Tribune Business Reporters

THE GRAND Bahama Port Authority’s (GBPA) president yesterday suggested running an electricity cable between his island and Abaco as a way to “stabilise” electricity costs and bring rates down.

Ian Rolle unveiled the plan at the Grand Bahama Business Outlook conference, where he suggested that such a venture would potentially expand Grand Bahama Power Company’s customer base and provide additional redundancy for Abaco consumers who

presently rely on Bahamas Power & Light (BPL).

“We feel if we are able to stabilise the cost of electricity.... we envision a cable possibly running from Grand Bahama to Abaco that would help to spread the cost over a larger population and add redundancy for our brothers and sisters next door to us,” he explained. “We hope that with the spreading out of cost, the rate, it will have a positive effect for all of us.”

Back solely on Grand Bahama, Mr Rolle confirmed that the transition to renewable energy was “a big push for this island”.

necessary airlift and customer access.

Speaking after Chester Cooper, deputy prime minster and minister of tourism, investments and aviation, confirmed that a Bahamian investor group and their international partners will invest $200m to transform Dorian-devastated Grand Bahama International Airport, he said of the deal: “It means we have a future, which was very much in doubt without the airport.”

“The main thing it means is that we have the potential to increase tourism, which we don’t now, and we have the potential to cause a number of investments that are about to start, but wouldn’t start without knowing the airport was coming, particularly Weller Development, to move forward,” Mr Gape told this newspaper of the airport project’s importance.

“We had no choice but to move ahead with the airport. I think Carnival were saying they were nervous without it, and Royal Caribbean, if they intend

• ‘Lifeline’ to unlocking multimillion investments

• Attorney: ‘We now have a future’ for the island

• ‘First of three legs’: Airlift, product fixes remain

to home port, wouldn’t come without it. It’s really a lifeline to future investment. We were doubly dead in the water without the airport. It’s very, very critical.

“With that here we can then move ahead with a lot of other potential investments that wouldn’t do it without the airport. Nobody could build a hotel here without the airport. It’s all good news from our point of view. It means we have a future, which was very much in doubt without the airport

SEE PAGE B5

‘Air cargo hub’ ambition for GB’s $200m airport

By NEIL HARTNELL Tribune Business Editor nhartnell@tribunemedia.net

THE DEPUTY prime minister yesterday unveiled a $200m Grand Bahama International Airport redevelopment that aims to ultimately transform the facility into an international “air cargo hub” for the Caribbean and Latin America.

Chester Cooper, also minister of tourism, investments and aviation, in confirming the long-anticipated deal at the Grand Bahama Business Outlook also disclosed that the mixed Bahamian and UK joint venture consortium that won the bid plans to “consistently generate 1,200 construction jobs” over the project’s five-year build-out.

• Winning bidder aims to serve Latin America

• Freight plans to generate up to 500 positions

• DPM: 1,200 construction jobs over buildout  CHESTER COOPER

Signalling that the group’s ambitions extend beyond re-establishing a tourism gateway, and the return of US pre-clearance, he said their plans to establish an air freight hub for the region were designed to create an extra 500 jobs over a 10-year period.

Mr Cooper confirmed previous exclusive Tribune Business revelations that Bahamas Hot Mix (BHM); its chairman, Anthony Myers; and CFAL president, Anthony Ferguson, were all members of the Bahamian investor group

DAMAGE FROM HURRICANE DORIAN TO GRAND BAHAMA AIRPORT

IAN ROLLE

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NAVIGATING THROUGH FIVE LIFE CYCLE STAGES

Every new micro and small business that grows into a medium-sized enterprise goes through five stages of evolution. These phases include existence, survival, success, take-off and resource maturity. All stages of small business growth come with challenges that every company has to overcome. Whether you are still toying with a business idea or have already taken the plunge into entrepreneurship, this column will help you navigate the challenges of starting and growing a business.

Stage 1: Existence

In the existence stage, also called the start-up phase, the company’s business structure is simple. For the most part, the owner manages the operations or performs all-important operating activities. At this point, in the absence of

investors, the owner is also the one funding the whole venture. The business is no longer just a hobby. The first plunge has been

taken and everyone around you knows that you mean business. Having the necessary capital is critical in this stage. The business needs funding to develop a viable product, plus deliver the product and/or service offerings to customers, plus cover daily operating expenses.

Stage 2: Survival

Survival is the next phase after the existence stage. At this point, the business has proven it is a viable brand and has found a market for its products or services, as well as acquiring customers. Most companies in this stage still operate with a simple structure. Even if the company now has employees, the owner oversees and makes the major decisions. They may not have systems in place yet for hiring practices and marketing models. In addition, some businesses may still be operating with minimal

formal planning, with the goals for the company existing only in the mind of the owner.

Stage 3: Success

The third stage of business growth is success. At this maturity phase, the company is thriving. It has established a strong presence in the industry to ensure consistent profits. As a mature business, it has the brand recognition and size to be financially healthy.

At this stage, the business would have grown enough to add more employees and probably a couple of managers. The brand might even be completely separate from the owner at this point. Accounting practices, marketing plans and production systems will also be in place. With other skilled leaders in place, the owner will not need to supervise every aspect of the company.

Stage 4: Take off

Even if a business owner simply wants to maintain their successful position, market changes and trends in the industry may compel expansion. This next stage is where companies can experience rapid growth because they can leverage the streamlined sales, marketing and operating strategies, and processes they have in place. The main concern now is how to grow and how to fund that growth. Some take the route of merging with another business or buying out a smaller, similar enterprise.

Stage 5: Resource Maturity

After a successful takeoff where the company has achieved the rapid growth it aimed for, the main concern of businesses entering the resource maturity stage is proper management of financial gains from the last

GB Power’s $15m deal over utility-scale solar

GRAND Bahama’s electricity provider and its regulator yesterday signed a $15m agreement for the island’s first utility-scale solar project that will supply up to 9.5 Mega Watts (MW) to the grid.

The Grand Bahama Power Company (GBPC), together with the Grand Bahama Port Authority (GBPA), signed a deal that will see Lucayas Solar Power begin construction on the Devon and Fairfield solar plants this month.

The build-out of the two sites, which will provide 4.5 MW and 5 MW, respectively, is set to create some 80 construction jobs and be completed by the 2024 first quarter.

Derek Newbold, the GBPA’s chief investment officer, said in a statement: “We have been working with the GBPC, Lucayas

Solar Power and its investors on this deal for quite some time. Of course, we had to contend with a myriad of challenges stemming from a catastrophic hurricane and global pandemic, which created a level of economic uncertainty.

“Nonetheless, this undertaking highlights the fact that we have committed equity partners who are fully invested in the success of this project and the transformational impact it will have on the electricity sector in Grand Bahama.” The solar power initiative is also being supported by the Inter-American Development Bank (IDB) through its IDB Invest arm.

Jorge Marquez, Lucayas Solar Power’s chief executive, said: “This project is innovative on several fronts. We will be employing the latest in generation

control, monitoring and remote security systems and, with the help of IDB Invest, we will be implementing a gender programme to include women in the construction phase.”

He added that 70 percent of the solar plant’s design and engineering is being led by women. The plants

will employ panels that are 67 percent more resistant to winds than the standard variety in a bid to mitigate any damage from future Hurricane Dorian-strength storms.

Lucayas Solar Power will operate as an independent power producer (IPP) that sells the electricity it

produces to GB Power, which will then distribute it to its customer base via Grand Bahama’s electricity grid. Dave McGregor, GB Power’s president, said: “Not only does this project represent a small step in reducing our carbon footprint and supporting the Government of The Bahamas’ green energy mandate, but allows us to replace a portion of our heavy fuel profile with a renewable source.”

He added that GB Power will purchase the solar energy produced by the plants at a locked-in price of $0.09 cents per kilowatt hour (KWh) over the duration of a 25-year power purchase agreement (PPA) with Lucayas Solar Power. “Customers benefit because we are able to increase our generation availability without having

phase. It should also carefully review its systems and processes to resolve inefficiency issues that come with rapid growth. At this point, the goal for the company is longevity. The business has the staff, the financial resources and well-developed systems to achieve this goal as long as the owner keeps their entrepreneurial spirit and takes advantage of the talent available to maintain the company’s standing in the industry.

• NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at tcconsultants@coralwave.com.

to make a substantive capital investment in additional generation ourselves, and it helps smooth out a portion of the fuel charge with the solar cost, which is less volatile than heavy oil prices,” Mr McGregor said.

Sarah St George, the GBPA’s acting chairman and chairman of the regulatory committee, said: “This development represents the very first utility-scale solar plant in The Bahamas, and places Grand Bahama as a renewable energy leader in this country.

“Our operating protocol and regulatory framework agreement implemented in 2013, which is another first of its kind in The Bahamas, sets forth the mechanisms that allow for these prudent and revolutionary investments that benefit the residents of our island.”

‘Air cargo hub’ ambition for GB’s $200m airport

that will spearhead what was billed as a complete overhaul of Grand Bahama International Airport. They are joined in Aerodrome Ltd by two fellow Bahamians - Anthony Farrington, an engineer; and Greg Stuart, a businessman.

BHM’s involvement in the project is through its UK-based international arm, BHM Construction International. The group has teamed with UK-based Manchester Airport Group as its operating partner, with financing for the project being provided by UK Export Finance, a British government body that provides credit guarantees and helps to arrange funding for that nation’s exporters.

Acknowledging that upgrading the airport, which was left in a state of disrepair following the devastation inflicted by Hurricane Dorian in September 2019, is “a key factor” in facilitating both Grand Bahama’s economic rebound and the Grand Lucayan’s sale, Mr Cooper pledged: “Grand Bahama, your new airport is coming and will be here very soon.”

He added that the Government has signed the agreement with Aerodrome Ltd, and its partners, in February 2023 for the airport’s redevelopment via a public-private partnership (PPP) that will see the consortium design, build, finance, upgrade and maintain a new main aviation gateway for Grand Bahama.

The consortium’s role, Mr Cooper said, will be to “generate [aviation and passenger] traffic, and to grow revenues and further enhance Grand Bahama International Airport”. He added: “Their mission is to transform Grand Bahama International Airport into a carbon neutral, climate resilient, commercially viable world-class airport.

“Subject to final design, this is expected to be

an investment of $200m in that range, and this investment will begin its preliminary work this quarter, this month; March. The airport will consist of two phases which are expected to generate 1,200 construction jobs consistently over the next five years.

“Ninety percent of these jobs will be reserved for Bahamians, and work permits will only be granted where Bahamians cannot be found in accordance with our Immigration laws and policies. During the construction of phase one of the new Grand Bahama International Airport, which we expect to be completed no later than the first quarter of 2025, 300 construction jobs will be created along with 50 engineering, management and accounting jobs.”

Messrs Myers and Ferguson could not be reached via phone for comment yesterday, and messages left for them were not returned before press time last night. However, Mr Cooper made clear the consortium’s air cargo hub ambitions will only be pursued once it has restored Grand Bahama International Airport to an acceptable standard for tourist arrivals and airlines, facilitating sufficient airlift to support several multi-million resort and real estate projects in the pipeline.

The phase one redevelopment will feature a new domestic terminal, US preclearance terminal, new taxiways and aprons, new roads and car parks, a flood mitigation system, a flood mitigation basin, renewable energy systems, a sea defense berm and support bridges, and infrastructure for air freight cargo facilities. Particular emphasis appears to have been placed on combating flooding and storm surge given how vulnerable the airport has proven to such events.

The consortium’s second phase will result in the creation of expanded taxiways

and aprons, a new domestic parallel runway, expanded roads and car parks, and an expanded heavy lift air freight cargo centre. Mr Cooper said the second phase is expected to begin construction around three years after the first phase start.

“We have many international airlines and partners interested in making Grand Bahama an air cargo hub for Latin America and the region,” the deputy prime minister added, although he did not provide further details. “The cargo zone’s construction is expected to commence within three years. New business at the cargo zone will create 50 permanent jobs consistently every year over ten years, creating 500 jobs in Grand Bahama.”

Establishing Freeport as an air cargo and freight transhipment hub is not a new concept. The idea was previously mulled by Dionisio D’Aguilar, Mr Cooper’s predecessor as minister of tourism and aviation, with the aim of exploiting Grand Bahama’s proximity - just 60 miles off the US coast - to develop an overspill cargo and break bulk facility given the lack of expansion space available at US airports.

Several sources, speaking on condition of anonymity, yesterday suggested that the airport consortium will need to either acquire or lease a portion of the nearby Sea Air Business Centre if it is to obtain the necessary warehouse and storage space to serve an air cargo facility.

Mr Cooper, meanwhile, said the winning bidder was poised to make an immediate start on transforming Grand Bahama International Airport.

While Aerodrome, the Bahamian investor group, will lead the project’s financing and management under a contract with Airport Authority-owned Freeport Airport Development Company, BHM will

serve as the design and construction partner. Manchester Airport Group will manage the airport and develop a fee structure, including passenger user and management fees, to ultimately finance the overhaul while repaying UK Export Finance and other lenders and ensuring the Bahamian group get a return on their investment.

Any net profits produced by the airport will go into the Government’s planned Airport Infrastructure Development Fund.

Although Mr Cooper did not say it, this structure implies that Grand Bahama International Airport will be operated under the same model as Lynden Pindling International Airport (LPIA), where the Government - via the Airport Authority - retains ownership of the real estate but leases the facility to the consortium long-term, which is likely to be for 30 years.

“We expect the work to begin before the end of this quarter,” Mr Cooper said, a period that closes at the end of this month. “Full design works are underway, and a design team will be on the ground on March 27. Demolition of the old international terminal and storage building will begin at the end of this month, or by the first week of April.”

He pledged that repairs to the air control tower will “begin immediately”, while those for the old Customs building will also start this week and “be given to Grand Bahama contractors for the benefit of residents of Grand Bahama”. The airport’s operating hours

have also been extended to 8pm. As for the prospects of having US pre-clearance restored, Mr Cooper said negotiations were taking place with the relevant US federal government agencies. “We will not belabour this issue except to say the Ministry of Foreign Affairs and Ministry of Tourism, Investments and Aviation are in active discussions with US Customs and US Border Patrol. That’s been going on for several weeks,” he added.

Airport construction, maintenance and improvement is listed as one of Bahamas Hot Mix (BHM’s) specialty areas on its website, and it has long experience of working

at LPIA on areas such as runway paving and resurfacing. The company also last year announced the expansion of its Freeportbased concrete and asphalt production capabilities, and its plant will enable it to supply Grand Bahama International Airport with these needs during reconstruction.

Manchester Airport Group owns and operates three UK airports - Manchester, London Stansted and Birmingham East Midlands. Collectively, it says some 60m persons pass through these three airports every year and that they provide jobs for a combined 40,000 people. Grand Bahama could be its first venture outside the UK.

Property value boost drives insurer’s 39% profit increase

“The economic landscapes in both the Cayman Islands and The Bahamas were very much supportive of business development endeavours but constrained somewhat by a lack of reinsurance capacity for catastrophe property damage covers, in particular,” Mr Ward told Bahamas First shareholders. “During the fourth quarter of 2022, we booked gross income of $42.7m, which is 0.9 percent above the premium levels achieved during the same period in 2021.

“Based on the level of GDP improvement in our operating jurisdictions, we believe that the top-line performance for the current quarter and, indeed, the full year, would have been better if we were able to access additional capacity from the international reinsurance markets during the year. For reasons previously identified, this was not possible. However,

because it was a marketwide problem, we did not find ourselves at a competitive disadvantage.

“As foreshadowed in the preceding quarter, the negotiations for our reinsurance contracts for 2023 proved to be especially challenging. The combination of regional and global factors that led to this scenario will likely persist for the next 12 months and possibly longer. We were able, nevertheless, to successfully place all of our reinsurance contracts for 2023 at the best terms available in what has been described as a once-in-a-generation renewal cycle.”

Analysing Bahamas First’s performance, Mr Ward added: “The full-year top line grew to $191.2m, which exceeds the prior year total of $178.2m by 7.3 percent. The property and casualty and health business segments registered growth in both jurisdictions, with the health segment leading the way with a robust

year-over-year increase in premium.

“Overall net underwriting income, however, saw a material dip, compared to the prior year, finishing at $29.4m compared to $33m in 2021. The motor portfolio in The Bahamas experienced a reduction in underwriting profitability due mainly to a return to more normal frequency and severity of damage claims, and prior year adverse loss development. Additionally, the Cayman health business continued to perform below our expectations.”

Focusing on the issues in the Cayman Islands, the Bahamas First chief said: “The roll-out of new technology and connected systems, together with a change in key personnel within the health segment, has caused a number of operational challenges for our Cayman subsidiary, leading to negative market perceptions about the company’s ability to

fulfill its obligations to policyholders.

“The Board and management are focused on the remedial actions that are required to resolve these issues, and to ensure that the benefits of the new systems are experienced by our clients in that market in the shortest possible timeframe.”

Breaking its business down into segments, Bahamas First’s Bahamian property and casualty business saw profits fall by $770,000 year-over-year, declining by 16 percent from $4.796m to $4.025m. However, this was largely compensated for by its Cayman equivalent, which increased to $3.163m from $1.975m in 2021 - a rise that offset losses on the health side, which rose to $1.546m from $1.149m.

Turning to a mixed investments outcome, Mr Ward added: “The investment returns for the year represent a mixed bag of results, with our equity

Port chief eyeing Abaco power cable connection

FROM PAGE B1

He added: “We have three to four solar plants

proposed for Grand Bahama to stabilise the cost and transition to clean energy. I’m so happy to

say that one of the projects the Port has been working feverishly on will break ground tomorrow.”

Applications must be submitted to yachts.recruitment@thlmarine.com

Hours later Mr Rolle and the GBPA were joined by Grand Bahama Power Company in signing a four-party agreement, also involving the Inter-American Development Bank (IDB), for construction of a $15m utility-scale solar project at two sites that will supply a combined 9.5 Mega Watts (MW) to the island’s electricity grid.

The deal will see Lucayas Solar Power begin construction on the Devon and Fairfield plants this month. The build-out of the two sites, which will provide 4.5 MW and 5 MW, respectively, is set to create some 80 construction jobs and be completed by the 2024 first quarter.

Lucayas Solar Power will operate as an independent power producer (IPP) that sells the electricity it produces to GB Power, which will then distribute it to its customer base via Grand Bahama’s electricity grid.

GB Power will purchase the solar energy produced by the plants at a locked-in price of $0.09 cents per kilowatt hour (KWh) over the duration of a 25-year power purchase agreement (PPA) with Lucayas Solar Power.

Elsewhere, Juan Fernandez, Carnival’s vice-president of port operations, said site clearance for its Grand Port project was now complete and it was working to elevate the location some 12-15 feet above its present level. This work was now 50 percent finished, and he added that landside construction was likely to start towards the end of this year.

Some 80 Bahamians are working at the site currently for various contractors, he added, and

holding in Commonwealth Bank showing improvement, while our fixed income investments posted an unrealised loss.

“The Commonwealth Bank share price increased by 18 percent during 2022, which resulted in increases in the unrealised gain. However, these were offset by the decrease in unrealised gain when we sold a portion of our holdings. Consequently, we experienced a net increase in unrealised loss of $0.3m while posting a realised gain included in other income of $2m during the year.

“Our global bond portfolio has reported an unrealised loss of $1.5m due to market factors. This was offset by an unrealised gain of $3.2m on revaluation of our land and buildings.”

It is unclear where this property revaluation gain was booked, but Bahamas

First’s “other net income” more than doubled, growing by 155.6 percent from $1.6m to $4.091m.

Carnival is forecasting that by the second year of operations its port project will be responsible for creating around 1,000 jobs on Grand Bahama. Ground breaking for the development took place in May 2022.

Mr Rolle said yesterday of Carnival’s cruise port:

“This was a long overdue project that took a while to get over the finish line but we managed it. My team and the shareholders of the Port Authority worked feverishly to get this deal over the finishing line.”

Marc Weller, Weller Development’s president and founding partner, told the Grand Bahama Business Outlook that its 36-acre Six Senses project is due to complete construction and be operational by 2026. ‘‘That site, there’s gonna be 45 waterfront and canal villas, and then there’s to be 20 branded residences,” he explained.

“And then we have amenities including the Six Senses spa, several restaurants, Earth Lab, and the marine research and dive centre. We’re slated to open in 2026. We’re actually getting close but it’s subject to approval by the Department of Environmental Planning and Protection. But it’s, as you can see, it’s low slung. These are all single and kind of one-anda half storey buildings.

“We’ve got 27 villas, 15 one-bedrooms and five two-bedrooms, a few three bedrooms and reserved. Then you got a beach club, you know, which is not huge. This is 4,300 feet, hotel lobby receptions, only 5,000 feet, spa and wellness, another 6,000 feet. That’s actually the biggest building because that’s where they think people want to spend time, a great bar and then back of house.”

And the carrier also enjoyed a positive $1.838m reversal on its other comprehensive income, which stood at $982,357 for the 2022 full-year compared to an $855,618 loss the year before. “We saw a sharp rise in comprehensive income in the current quarter, amounting to $7.1m compared to $5.8m in the fourth quarter of 2021,” Mr Ward wrote. The revaluation of our land and buildings in the fourth quarter was the largest contributor to this result.

The Group’s comprehensive income for 2022 is $6.6m, compared to $4.8m in 2021..... Despite the difficult reinsurance market conditions and our continued dependence on this vital component of our business, we are encouraged by the bright economic outlook in both The Bahamas and The Cayman Islands, which should provide an impetus for improved results in 2023.”

Turning to the project’s economic impact, Mr Weller added: “There’s a possibility for incredible economic revitalisation. There was also an opportunity for job creation, both on the construction and development side. But then in the permanent side and the training side, and then also on the environmental sustainability side.

“Six Senses core values, it fits right in with what it is we’re trying to accomplish here - local sensitivity, global sensitivity. It’s a very thoughtful brand… they work really hard to fit in locally. They’re not coming in and trying to impose this big huge project or product that could be put anywhere near water or could be put anywhere in the United States. Their projects, they’re all unique.

“Their menus are unique, they source their foods uniquely. Everything’s unique about the project; the architecture, the design. They’ve crafted experiences. And what’s neat about crafted experiences is they’re different from place to place. So here they’ll develop and come up with their own ways to do that, which will be great. Emotional hospitality with an emotionally intelligent approach to service that begins with empathy,” he continued.

“I think The Bahamas thinks about it a lot more than than other municipalities - the model for sustainable tourism - and I think it’s a model that is sustainable and they can go forward. It’s about investing in businesses that think outside the box, that think about the environment, that put the environment first and really think about that and then how to create jobs and how to create eco-tourism off of that.”

$200M AIRPORT DEAL MEANS GB ‘NOT DEAD IN THE WATER’

being there. Now we’ve got the other big problems to deal with.”

Tribune Business previously exclusively revealed that Bahamas Hot Mix (BHM) and its chairman, Anthony Myers, together with CFAL president, Anthony Ferguson, were involved in a bid for Grand Bahama International Airport that was one of the leading contenders to secure the deal.

Mr Cooper yesterday confirmed that all three, with BHM’s involvement occurring through its London-based international arm, were participants in the winning bidder. Messrs Myers and Ferguson are being joined by two other Bahamian investors, Anthony Farrington, an engineer, and businessman Greg Stuart, in the Aerodrome Ltd group that has teamed with UK-based Manchester Airport Group as its operating partner (see other article on Page 1B).

The joint venture partners are said to be planning a $200m investment that envisions, as its ultimate goal, developing Grand Bahama International Airport into more than just a tourism gateway by transforming into an international air freight and cargo hub for the Latin American and Caribbean region.

Magnus Alnebeck, the Pelican Bay resort’s general manager, told Tribune Business that the airport announcement “sets the tone” for reviving Freeport’s tourism and economy while also boosting investor confidence by confirming that work is set to shortly begin. However, he added that transforming Grand Bahama International Airport is only the first step in fixing the island’s economy.

“The important part is the Government is investing in the airport, and that shows they care about Grand Bahama,” he said. “It’s good news, and gets everyone upbeat and builds confidence that something is actually happening. But just getting a new airport will not solve the problem

because we need airlift, and we need properties that are open so we get the airlift. This is the first leg of a three-legged stool, and let’s hope the other two legs happen.”

The Pelican Bay chief added that the airport redevelopment appeared to have a very aggressive timeline, with initial demolition work forecast to start within weeks by early April at the latest. “That’s what Grand Bahama needs to see; things actually happening,” he said. “We are constantly told things are going to happen.

“When we drive past the airport in the coming months and see things happening it will make us feel good, and the psychology is important. It builds up everybody’s good spirit. It’s the first thing that is happening, and it will hopefully set the tone for everything else. It definitely increases investor confidence that we’re about to get a functioning airport. Even though we are a few years away from that airport, they are seeing the Government is serious.”

Hurricane Dorian’s flooding and storm surge left Grand Bahama International Airport in a state of disrepair in September 2019. Mr Alnebeck, though, credited the Government for the improvements made to-date that have at least created a workable facility even though much more remains for the new investor group to do.

“Hopefully this is the turnaround point that has now started,” he told Tribune Business of Grand Bahama’s economic fortunes. “I think it was really badly needed. It’s a very strong signal, and will be even stronger when the earth is being moved and we see construction going on. Who would invest in an island that does not have a functioning airport?

“It’s been a long time coming. After Hurricane Matthew, when Memories and Sunwing left, we lost a lot of airlift, and after Dorian we lost the airport for pre-clearance and everything else. It’s the first

JOB OPPORTUNITY

ACCURAD IMAGING CONSULTANTS SEEKING RADIOLOGIST

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positive thing relating to airports and airlift that we’ve seen in six-and-half-years. The airport needs to be able to accommodate the airlift.”

Mr Alnebeck said Pelican Bay, which is focused more on the corporate market, stood to benefit from “any increase in economic activity” on Grand Bahama including the airport project. He added that skilled expatriate professionals

brought in to work on the latter would likely tend to stay at the resort. Meanwhile James Sarles, broker and principal at James Sarles Realty, yesterday backed Mr Alnebeck’s position that Grand Bahama International Airport’s transformation is just the first step in reviving the island’s tourism product. “The airport is an integral part of the

success and growth of Grand Bahama, but it’s not just the airport,” he said.

“It’s airlift. Putting money into an airport is the first step, but that airport needs airlift and to get airlift you need hotel rooms. It’s a good first step, it’s all very positive, but all these things work together.” Besides being the first and last impression for visitors, the airport is also critical to

facilitating the airlift that drives tourism and other commercial activity on the island. Its transformation goes hand-in-hand with the long-running, and so far unsuccessful, efforts to sell the Grand Lucayan resort as one needs the other to be financially sustainable. The redevelopment, led by the winning bidder, will also play a key role in attracting the US government to reinstate pre-clearance facilities in Grand Bahama.

offers for this resort.... and they are already undergoing due diligence. We are committed to achieving the best possible result for the Bahamian people.”

Mr Cooper added that it was vital that the Grand Lucayan’s buyer possess the financing to not just close the sale but also redevelop the property into a destination capable of attracting sufficient airlift and visitors to Grand Bahama - a project that Electra itself estimated might require at least a $300m-$400m investment.

“The key is to ascertain development financing or financing for actual development,” the deputy prime minister explained. “If we just wanted to sell the hotel, it would be done. The closing finance is important, but the buyer’s capacity to resort the resort to world-class standards is paramount.”

Mr Cooper praised the Grand Lucayan’s management for keeping its sole open property, Lighthouse Point, “in relatively good order and good form notwithstanding the challenges”. He added that more than 100 Bahamians were employed at

credible offers’ for Lucayan

the resort, which was running an occupancy rate of around 90 percent - albeit that its other two resorts, the former Memories and Breaker’s Cay, are closed.

Noting the property’s significance for Grand Bahama, the deputy prime minister added: “While I remain cautiously optimistic, I will only make any further public pronouncements when full due diligence is complete, funding has been identified and placed in an escrow account and we have definitively identified a closing date.

I ain’t saying nothing else until money is in the bank.”

Tribune Business previously revealed that the failed $100m sale to Electra America Hospitality Group is set to cost Bahamian taxpayers a further $9.1m with subsidies to the resort for the full fiscal year neardoubling in the 2022-2023 mid-year Budget.

The Davis administration is increasing funding for the hotel from the originally-forecast $10.3m to $19.4m, an 88.3 percent rise, which has almost certainly resulted from the Government having to hold the property for longer than anticipated after that deal

collapsed in November 2022. The extra $9.1m may seem relatively minor when measured against the Government’s projected $3bn in recurrent spending for the 2022-2023 fiscal year, but the taxpayer’s total Grand Lucayan exposure - including the initial $65m purchase price paid to Hutchison Whampoa’s real estate arm in September 2018 - is now likely to be moving close to the $200m mark. Many Bahamians will likely only believe the resort has been sold when they actually see it happening.

Meanwhile, both Mr Cooper and Ian Rolle, the Grand Bahama Port Authority’s (GBPA) president, touted “about $1bn of new investment projects coming out of the pipeline for Grand Bahama” during their respective presentations. The deputy prime minister referred to a new 95-acre eco tourism project, being spearheaded by a US investor group, that is targeted for an area near Holmes Rock in west Grand Bahama. The land purchase for the development is set to close shortly.

More than half of the $1bn that the two men

identified is likely to come from just two projectsthe $200m Carnival Cruise Port and the $350m-$400m investment by the Grand Bahama Shipyard in two new dry docks, which are likely to become operational by the end of 2025 moving into 2026. Other major projects include the $200m Grand Bahama International Airport redevelopment, plus Weller Development’s $200m-$250m Six Senses resort.

Mr Rolle’s presentation yesterday gave a glimpse of Barbary Town, which is thought to be an additional project that Weller plans to undertake on a 2,000-acre land option it has acquired in the Barbary Beach area. Thought to be close to obtaining government approval, several sources have suggested it will be equivalent to Freeport’s version of Lyford Cay without the gated community, while also featuring at least two resorts alongside the high-end real estate.

Neither Mr Rolle nor Marc Weller, Weller’s founding partner and president, mentioned this in their respective presentations yesterday. However, the former said: “What

we see is major real estate development happening over the next few years as well.

“Over $1bn of investment is in the pipeline. Some of those projects have already started, some have had their business licence applications approved, and some are going through getting their business licences approved.”

The GBPA president confirmed that Royal Caribbean’s $70m cruise port expansion, and redevelopment of Freeport Harbour in partnership with ITM Group and another party who he did not identify remains on the table. He added that both Carnival and Royal Caribbean’s investments are projected to each bring one million cruise visitors per annum to Grand Bahama once fully operational.

Urging Bahamian entrepreneurs to develop new and expanded tours, excursions and attractions in

preparation for this potential visitor influx, Mr Rolle said the second phase of the Western Atlantic Medical School expansion is expected to begin shortly as plans have already been submitted. “The idea is to focus on these types of investment because we believe Freeport has the right environment for them,” he added.

Mr Rolle also hailed the former Minnis administration’s Commercial Enterprises Act for helping to entice the EY accounting firm to establish an international office in Freeport, as its expatriate staff were able to obtain “quickly” BH1B work visas under that law’s provisions. The company is now seeking to expand its Freeport operation and will start construction on a building in Freeport’s Mall area within the next few months.