In what Prime Minister Perry Christie said will be a transformational project for Mayaguana, the government on Tuesday signed a heads of agreement with an American group for a $1.8 billion project, which will result in 50 percent of profits going to the Hotel Corporation on behalf of the Bahamian people.
“It is a great day for Mayaguana,” declared the prime minister during the signing ceremony at the Cabinet Office in downtown Nassau. “It is an historic day for the southeastern Bahamas.”
The 50/50 joint venture agreement with the I-Group out of Boston will mean the establishment of Mayaguana Island Developers Limited, which will be 50 percent owned by the government and 50 percent owned by the I-Group.
But the prime minister stressed that the government will not have to come up with any capital for the project. However, the government will transfer approximately 9,999 acres of Crown Land to the new company.
“Effectively, the government has earmarked and dedicated this acreage to be developed in an equal partnership between Bahamians and non-Bahamians in a fashion that will benefit all involved,” Mr. Christie said.
“It should be noted that the government has agreed to the release of this land to the joint venture company in stages and not all at once. It will be released as clearly specified development milestones are achieved.”
In addition to the land, the government will contribute development concessions and the expertise inherent in the Hotel Corporation and its planned successor, The Tourism Development Corporation, the prime minister said.
At the time of closing, the I-Group will pay the government $2 million and the government would within 60 days convey to the joint venture company the first tranche of 5,825 acres of Crown Land, Mr. Christie also revealed.
The prime minister said that the heads of agreement establishes that if, for whatever reasons, the developers are not able to meet the agreed milestones, appropriate portions of the tracts of land will be re-conveyed to the government, based on the level of development achieved so far.
The government on Tuesday also executed a joint venture agreement, management agreement, and related documents relative to the development.
The prime minister said the new partnership will undoubtedly be a “long-term and fruitful relationship all centred around the creation of development zones on the island of Mayaguana.”
He said the other islands in the southeastern Bahamas will also directly benefit from the project.
The $1.8 billion investment is expected to materialize over a 15-year period, but the developers are expected to spend a minimum of $14 million over the next two years.
The first phase of the development will include the rebuilding and upgrading of the current airport with a runway to a minimum length of 7,000 square feet, improved terminal facilities, and security features which meet international standards. The airport, Mr. Christie said, will be capable of accommodating international commercial traffic.
The first phase will also include the creation of a 25-unit upscale boutique resort at North Beach, including luxury hotel accommodations, eco-sensitive resort amenities, a 100-lot residential community, utility services and roadways.
This component of the development will also include hiking trails, a sauna and spa, a small clinic, a golf putting green and driving range.
Mr. Christie said it is also proposed with the approval of the environmental authorities and the relevant government agencies to revitalize a dormant eco-system in the Flamingo Pond vicinity.
The prime minister, who emphasized his government’s commitment to protecting beach access, also said the developers have committed to attracting a well-recognized hotel operator to develop and operate a 225-room hotel resort on Mayaguana.
Additionally, the developers have committed to attracting a cruise operator “of familiar international repute” to establish Mayaguana as a port of call for cruise lines.
Following the signing, an elated Prime Minister Christie told The Bahama Journal that “this is a different type of agreement”, and he said it is a version of Freeport, except that the government has 50 percent ownership in the development.
“It requires synergy between private and public sector owners,” said Mr. Christie, who pointed out that the population of Mayaguana is only around 400 people, but is expected to grow to the thousands when the development comes on stream.
“It involves full participation of the Bahamian people,” he said of the development. “This is a defining moment for my government.”
The new Minister of Financial Services and Investments Vincent Peet, who recognized the work that his predecessor Minister Allyson Maynard-Gibson did to advance the project, said the impact on GDP from the development is estimated to be more than $116 million.
“Coupled with opportunities for new employment will also be opportunities for training, a vital component of any successful development,” he noted while pointing out that an economic impact study has determined that within five years, there will be 1,700 new jobs created for Bahamians in the resorts, residential communities, recreational facilities, industrial ventures and other areas within the development.
“Additionally, the size and scope of this development will call for the establishment of a thriving service industry to support the new residential and business communities,” Minister Peet said.
“Bahamians will be therefore called upon to establish business ventures to service the resorts, private residences, commercial and industrial enterprises, and the people who live and work in them.”
An entirely new economy will be created as a result, he added.
“Mayaguanans will be at the forefront of fulfilling these needs, as they possess the key advantage of being on the ground and having familiarity with the community,” Minister Peet said. “However, all Bahamians are invited to utilize this project as a veritable breeding ground for the development of their respective entrepreneurial talents.”
I-Group President Stephen Roy, who was described as a successful entrepreneur and pioneer of many US based and international businesses, said the joint venture is a significant opportunity for Bahamians to benefit.
“Because it’s a joint venture, it really means that we’re integrated at all levels of the government to make sure the project is carried out in a manner that benefits both our company and the people of The Bahamas and especially the people of Mayaguana,” Mr. Roy said.
He also assured that his company was committed to environmental safeguards, a point Prime Minister Perry Christie made earlier.
The developers have submitted an environmental impact assessment to the ministry responsible for the environment, and have submitted all plans developed to date to the necessary approving authorities, the prime minister said.
To date, I-Group has reportedly spent $8 million and currently employs approximately 25 Bahamians.
By: Candia Dames, The Bahama Journal
