The government has spent a total of $13 million to keep the Grand Lucayan resort in Grand Bahama operating, according to the government’s budgetary performance report for the first six months of this fiscal year.
In its summary of its fiscal performance, the government noted that it had $48.7 million in equity, and had contributed $16.6 million to the debt sinking fund.
“On the equity side, developments continued to be dominated by the government’s investments in the special purpose vehicle, Lucayan Renewal Holdings Limited, formed to acquire the Our Lucaya properties in Grand Bahama during the first quarter of this fiscal year,” the government said.
“For the first half of 2018/2019 these investments totaled $45.4 million — reflective of the original $32.4 million in equity contribution alongside an additional $13 million for operational expenses.
“The $49 million in the comparative period included the collateralization of a restructured swap transaction, with part of these funds to be released to the government over an agreed timeframe.”
The government purchased the resort for $65 million, with $30 million paid up front.
It borrowed the balance from the former owners, which will be a government-guaranteed mortgage paid over three and a half years with interest.
As part of the purchase agreement, the government paid Hutchinson Lucaya Limited (HLL) and Bahama Reef Limited $1.5 million as a subsidy for operational losses while keeping the Lighthouse Pointe open during the completion of the purchase.
Nearly two months, ago Deputy Prime Minister and Minister of Finance Peter Turnquest told Eyewitness News Online that there were several “exciting business opportunities” on the horizon for the property, and if realized, the resort could stop operating at a loss and turn a profit under government ownership.
The government announced last year that it plans to spend just over $3 million to upgrade the property and maximize the resort’s potential earnings during the high tourist traffic season.
The ongoing voluntary separation package (VSEP) is intended to reduce the resort’s operational costs.
That process was expected to be completed for both unions at the resort in December.
While VSEPs for the line staff could be wrapped up in a matter of weeks, according to officials, it remains unclear when the government will complete the process with managerial staff, of which there are approximately 60 who accepted offers.
Another 150 line-staff have accepted VSEPs.
The resort has around 400 employees.
The resort features three brands: Memories, Breaker’s Cay and Lighthouse Pointe.
The all-inclusive property closed its doors following Hurricane Matthew in October 2016.
The Lighthouse Pointe was the only hotel reopened.