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Johann

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Registered: Mar 2010
 
 Posted December 13th, 2011 03:07 AM   IP           Reply with quote Edit Post Delete post
Sigh...

$1.5 billion development rejected

By Yasmin Popescu
yasmin@nasguard.com

In an interview with the press after acknowledging being axed from the Cabinet of The Bahamas, Member of Parliament for High Rock, Kenneth Russell told the story of an investment that promised a lot for Grand Bahama that was denied.

Questioned by The Freeport News about the plans, Russell said, he was working with a gentleman from the United States who owns a company that was seeking to do a major development in Grand Bahama.

"It was supposed to go first of all in the Freeport area; however, he later decided on East Grand Bahama, but that was rejected by the government after four attempts. Rejected by the government and right now that's it."

Asked why it was rejected, he said, the rejection came from Prime Minister Hubert Ingraham, adding that it was rejected because the Port Authority wasn't selling any property. He noted the investors had applied for the property from the Port Authority and that request was also denied.

"My simple goal was to put Grand Bahamians to work, that's all I was after," he stated. "Unfortunately, that is a misstep, in me trying as a Minister, trying to get my people to eat and clothe and feed their families."

Asked about the scope of the project, Russell said, it was supposed to be a $1.5 billion touristic development.

"It was supposed to go first of all in Sharp Rock, but because of the problem with the Port Authority they decided that they wanted to look at Blackfoot Point up East End, but the government did not see any (way for) this project and didn't agree to it."

He noted that Sharprock is in the Port area. The potential investors, he said, were trying to purchase 2,100 acres in the Eastern part of the island.

While in Grand Bahama yesterday, Prime Minister Ingraham, confirmed that the project was rejected by the government.
beachbum

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Registered: Feb 2008
 
 Posted December 16th, 2011 12:44 PM   IP           Reply with quote Edit Post Delete post
Almost yearly there is some new "big" project being discussed for Grand Bahama. They have ranged from the ridiculous (Moon Bahamas) to a few with some limited construction (Ginn Sur Mer, Arawak Hotel, Shannon Golf Course).

The all had the same common issues - lack of funding and a business model that made no sense. This one always seemed full of extravagant promises but was very vague about the source of funds to build anything. I doubt many on Grand Bahama took this seriously.

In an era where some Freeport resorts have closed and others are for sale, expecting significant new real investment is unrealistic until the economic picture changes, both in the Bahamas and worldwide. If an investor had $1.5 billion, they could probably buy all of Port Lucaya and have a ready made investment.
Johann

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 Posted December 17th, 2011 09:23 AM   IP           Reply with quote Edit Post Delete post
I'm sorry, beachbum, but if they want to buy the land, sell it to them. You don't need to show where the funds are coming from as long as they pony up the money to make the sale.

Even if only a fraction of their grand scheme comes into effect, something is better than nothing, even if it's just for the destroyed morale of the residents. The Port Authority isn't doing anything with it, so why not sell it? Or better yet how about the Port Authority develops something on its own to help stimulate the economy of Freeport? If you build it, they will come. It took one big well-run resort to destroy Freeport, it will take one to bring it back.

Nobody wants to stay at places like Royal Palm and Island Palm anymore, the world is full of fantastic resorts to choose from, full of entertainment and fun. Grand Bahama just doesn't have that to offer anymore, so why would people spend their vacation on GBI instead of somewhere else? Someone, sometime, has to give them a reason to.
beachbum

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Registered: Feb 2008
 
 Posted December 17th, 2011 02:37 PM   IP           Reply with quote Edit Post Delete post
Quote:
Johann wrote:
I'm sorry, beachbum, but if they want to buy the land, sell it to them. You don't need to show where the funds are coming from as long as they pony up the money to make the sale.

Unfortunately, they may have wanted to buy land, but were lacking the one commodity needed - funding. As Sir Jack said in the Freeport News, they completely failed to "check out." In the past, often due diligence was not done to determine if a project had any chance of success. That has proven very costly to the people of Grand Bahama time and time again. This time, it was done.

Quote:

Even if only a fraction of their grand scheme comes into effect, something is better than nothing, even if it's just for the destroyed morale of the residents.

There is a long history of grand projects that were basically con games to hook unsuspecting investors (particularly foreign investors) than a real opportunity for economic growth. Most Bahamians are realistic and recognize these "projects" often do more harm than good. Another failed project that leaves a mess for the Bahamians to clean up doesn't help morale. There is nothing positive about eye sores like Arawak and destroyed ecosystems left behind by failed projects like Ginn.

Quote:

Nobody wants to stay at places like Royal Palm and Island Palm anymore, the world is full of fantastic resorts to choose from, full of entertainment and fun. Grand Bahama just doesn't have that to offer anymore, so why would people spend their vacation on GBI instead of somewhere else? Someone, sometime, has to give them a reason to.

Excellent points. How to get people to return to Grand Bahama has been the theme for decades. A nice resort like Our Lucaya can be built, but that doesn't mean people will come. Vacationers need value for their money, and in today's economic times, fewer people are traveling for vacations. The tourism industry keeps looking for the answer, but hasn't found it yet.
Johann

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 Posted June 14th, 2012 01:38 PM   IP           Reply with quote Edit Post Delete post
$1bn Project Eyeing Revival

By NEIL HARTNELL

#Tribune Business Editor

#EFFORTS are being made to revive a former $1 billion resort project cited by ex-Prime Minister Hubert Ingraham as a key factor in firing his then-minister of housing, Ken Russell, Tribune Business can reveal.

#Multiple sources have informed this newspaper that Lawrence McDonough, who together with his Chinese-born wife submitted the Sharp Rocks Resort proposal to the Bahamas Investment Authority (BIA) in 2010, has returned to Grand Bahama with talk of reviving the project - albeit on a smaller scale.

#Tribune Business was also told that Mr McDonough had been seen on numerous occasions in the company of former Grand Bahama Port Authority (GBPA) chairman Hannes Babak, who was a major supporter of the new government during the 2012 election campaign.

#Mr Babak, when contacted by this newspaper, effectively confirmed that Mr McDonough had been back in Grand Bahama in recent days and weeks, but downplayed any attempt to revive the Kylin proposal, saying the latter was "just checking things out".

#He did not comment on suggestions that he was working with Mr McDonough to revive the Sharp Rocks proposal, merely saying: "I don't know about it and can't comment on it. I know him [Mr McDonough] from three years ago. I saw him and know him from three years ago. I just think he's checking things out."

#Ian Fair, the Grand Bahama Port Authority's chairman, told Tribune Business that he had received no revised proposal from Mr McDonough to-date, saying: "Nothing's coming across my radar screen." This newspaper understands that the same position is also true of the Grand Bahama Development Company (Devco).

#These two entities are crucial to any prospect of success that the Sharp Rocks project, proposed by Mr McDonough and his wife as the owners of Kylin International Group, has. The development, as originally conceived, was contingent on acquiring 2,000 acres, at a purchase price of $100 million, from a combination of Devco and Port Group Ltd, the latter being the GBPA's sister company and affiliate.

#A copy of the original 2010 Kylin submission to the BIA, which has been obtained by Tribune Business, talked of constructing five luxury hotels, a cruise ship port, Blue Flag Marina, and gaming, retail and restaurant facilities.

#"Kylin will invest more than $1 billion in the physical development of the resort," the submission said. "It is anticipated that the resort will employ over 5,000 staff.

#"Kylin has negotiated a construction loan commitment in the amount of $1.5 billion from Beijing Construction-Engineering Group. While an agreement in principal has been reached, the loan commitment is contingent upon the approvals of the Port Authority and Government of the Bahamas."

#Former Prime Minister Ingraham's firing of Mr Russell as his housing minister was at least partially linked to the latter breaching collective Cabinet responsibility by continuing to push the Kylin proposal when it had been rejected by the Government.

#The main concern with the Sharp Rocks proposal, Tribune Business can reveal, was Kylin's ability to put in place the necessary project financing. Both the Government and Hutchison Whampoa, as a 50 per cent Devco shareholder with management rights, were both said to harbour reservations on the issue.

#"Devco met with them [Kylin] two years ago, and they didn't have the horsepower to do it then," one informed source told Tribune Business. "The problem with Kylin so far is that they showed no ability to raise any financing."

#In particular, Hutchison, as a Hong Kong-headquartered conglomerate with numerous contacts in China, was said by sources to have been unable to uncover much information on Kylin, despite doing extensive due diligence.

#Kylin's 2010 proposal suggested that more than 6,000 construction workers would be hired to complete Sharp Rock's construction over a 24-28 month period.

#"The construction of Sharp Rocks Resort will generate nearly $1 billion in construction spending over a 24-28 month period from July 2010 through August 2012," the proposal promised.

#"It is anticipated that many of the materials and services will be procured through the local economy, and of that $1 billion in construction, nearly $400 million is anticipated to directly remain in the local economy."

#Pledging that Sharp Rocks would create 5,165 full-time jobs, Kylin said this alone would generate an $80 million economic impact for Grand Bahama.

#"In addition to the jobs created directly by the resort operations, it is estimated that another 2,000 jobs will be created, enhanced or improved by the resort operation," the Kylin document read.

#"Goods and services from the island are anticipated to be crucial to the operation of the resort, and it is anticipated that the resort will generate a minimum of $20 million in revenue on a yearly basis through its operations unrelated to payroll."

#However, sources briefed on Kylin's revised plans, described them as "scaled down from what was really envisaged. It appears they're now just doing a standalone cruise ship port and high-end hotels".
charles

Friend of the Island
Posts: 122
Registered: Feb 2008
 
 Posted June 14th, 2012 09:22 PM   IP           Reply with quote Edit Post Delete post
From the beginning GBI originated as a business venture. GBPA's goal was to create infrastructue to attractive industry and generate business license revenue. Hutchen's goal is increased habour revenue. The government and Tourism Board's "goals" are to project hope and keep their jobs. The first two have business plans. The others are spin doctors for tourism based ventures that just won't happen.



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