By Youri Kemp From Caribbean News Now

FREEPORT, Bahamas — The Canadian property and real estate developer, Paul Wynn of the Wynn Group, not to be confused with Wynn Resorts – with an equally eponymous name and person in that of hotel mogul Steve Wynn — has walked away from its bid to purchase the Grand Lucayan resort property in Grand Bahama.

A source close to the matter stated that the government is relieved that the Wynn Group is not moving forward with its acquisition of the property, stating that the arrangement appeared to be ill-fitting for what Grand Bahama needs in the medium and long term.

The Wynn Group was brought in to purchase the Grand Lucayan on the island of Grand Bahama, after securing a deal to develop condominiums on West Bay Street on the capital island of New Providence under the previous Progressive Liberal Party (PLP) administration.

The West Bay Street property, GoldWynn, broke ground in May 2018 and it is set to top $120 million when completed.

The Grand Lucayan property, on the other hand, was initially estimated to be somewhere between $65 million to $70 million. But, according to Wynn, due to prevailing factors that makes the project more challenging than originally envisioned, it was offering $40 million all in – a price at which Cheung Kong (CK) Property Holdings – the entity into which Hutchison Whampoa transferred all its real estate assets – refused to accept.

In addition to the base price, Wynn also added that any buyer would be seeking the same multi-million dollar taxpayer subsidies that he required to rebuild airlift into Freeport, plus renovate and remediate the existing hotel property, pegging the latter cost at between $45-$55 million, added on, making the value estimate to be anywhere between $120 to possibly $150 million.

Wynn, speaking with Tribune News, said he “feels much more comfortable investing” his time and money in the capital city of Nassau, citing the massive subsidies needed to make the Grand Bahama project economically feasible.

With options disappearing, Prime Minister Dr Hubert Minnis stated that he will not let the Grand Lucayan property fail and is willing to have the government purchase the property in the interim until they find a buyer.

The government had already allocated $25 million in the 2018-2019 budget for an equity stake in the Grand Lucayan’s purchase, estimated to be around 20 percent, plus to fund the provision of airlift and marketing support.

What will happen to that budgetary allocation is unknown at this time. Leader of the opposition, Philip ‘Brave’ Davis, asked Minnis to explain where exactly the money would come from if the government plans to move forward with its bid to purchase the Grand Lucayan.

Wynn, in light of recent events, has also offered to provide a loan to the government of The Bahamas if indeed Minnis feels that the only option is to purchase the hotel in the short-term and then resell it at a later date.

The Grand Lucayan, along with the adjoining port and harbour, was initially sold to Hutchison Whampoa in 1997 by the then Hubert Ingraham administration, a move that was seen by many observers at the time to be an acquiescence to the government of China’s pressure on countries to denounce Taiwan as an independent state and embrace the “One China” policy – moves that took place within weeks of one other.

Hutchison, seen favourably by the government of China, is also closely aligned to the government and senior Chinese government officials. Its strategic investments worldwide have historically favoured the Chinese government’s long term geo-political and geo-economic interests.

China’s investment strategy has also favoured those of strategic quality that serve their geo-political interest, as economists and political scientists have evaluated China’s investment policy as tricky, targeting developing nations with money to persuade them to denounce Taiwan; or to laden them with obscene amounts of debt on projects those countries can never repay, drifting the recipient country into “debt traps” that further increases China’s influence within the recipient country for China continually to further its geo-political influence and spheres of interest.

On the other side, political economists also have observed that China has invested heavily in properties of strategic value, properties that they rarely ever sell at value price, or never sell at all, as the long term interest of maintaining control over developing nations’ assets and the economic lifeblood of recipient countries is the core purpose, not merely investment for economic gains or increased profit margins, primarily.

Considering the history, Hutchison “probably” is not seeking alpha out of the Grand Lucayan Resort property, and Wynn’s lower bids being rejected by Hutchison – even as reports and sources close to the matter suggest Hutchison wants to sell, but maintain the port facilities – the price for which the Grand Lucayan will be sold is apparently not ready to be fully realized and could change at any moment.

With Wynn out, and Freeport needing economic support and investment, the Chinese-owned Hutchison not wanting to broker a deal that may save them the time and money in the short term, coupled with the fact that even if another attractive deal can materialize with another investor group, there is no guarantee that Hutchison will allow the sale to go through.

Considering the desperate state the island of Grand Bahama is now in – a government option may not be off the table, full sale, partial sale, nuclear option or simply re-start the process with a reputable hotel brand and company with concessions and subsidies along with it.

IMAGE: The Grand Lucayan resort in Grand Bahama. Photo: grandlucayan.com

For more on this story go to; https://wp.caribbeannewsnow.com/2018/08/05/with-wynn-group-out-grand-bahama-resort-still-in-chinese-hands/