Taxpayers in the Bahamas may be getting a break if the Wynn Group is able to close on a $65 million, all-cash purchase on the Grand Lucayan Resort.
Fred Smith, attorney and partner at law firm Callenders & Co., told Tribune Business he was “overjoyed” that the government of Grand Bahama would not be on the hook to buy the resort itself, sparing the public treasury from financing the acquisition as well as operating and maintenance costs. However, he also painted the Wynn Group’s deal as a short term “band aid fix” to what Grand Bahama’s larger economic hurdles.
Last week the Toronto-based Wynn Group signed a new letter of intent to purchase the Grand Lucayan from current owners Cheung Kong Property Holdings. The resort’s acquisition could be completed in the next one or two months.
Smith’s fears can be traced back to the 1980s, when Grand Bahama owned and operated numerous resorts via its Hotel Corporation. Those operations placed stress on taxpayers and the country’s treasury.
“I am overjoyed as a taxpayer, a licensee and a property owner in Freeport that the Government has found a private purchaser instead of it having to buy that hotel,” Smith told Tribune Business. “History has shown that whenever the Government is involved in private enterprise it discombobulates the economy to the detriment of everyone concerned. It breeds corruption, it takes away the profit motive, and it embeds bureaucratic slackness; all features that are anathema to a free market, prosperous economy.”
In late July, prime minister Hubert Minnis announced plans for the government to take an ownership stake in the purchase of the Grand Lucayan due to how important the property’s operation remains for the economics of the island. The closure of the property shutters roughly 59 percent of Grand Bahama’s total hotel room inventory, and has left 1,000 workers without jobs.