"The promise of retaliation through the courts
certainly does not help the cause of Freeport ’s economic development, nor does
it act as an incentive for prospective investors. It is in fact a ‘red flag’ and
a negative signal to all current and hopeful licenses to curl in their
investment plans until such time as the ownership battle is settled. We all know
this can take years to resolve and prove painful for all sides, including the
licensees."
The Chamber president was referring to the battle
over the assets of the late Edward St. George, the Port shareholder, whose
ex-wife, Mary, is now demanding 50 percent of his assets, as was reportedly
their agreement when they divorced many years ago.
As reported in The Bahama Journal on Wednesday,
Mr. St. George’s daughter, Caroline, is claiming that her father’s assets are
co-mingled with hers and she is determined to protect her interests.
Dr. Coakley noted that the Grand Bahama Port
Authority Ltd. is no ordinary company.
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The Hawksbill Creek
Agreement
created what was to
become The Bahamas’ second largest city, Freeport/Lucaya, on Aug. 5, 1955.
Freeport was designed to be exactly that, a “free port” that would encourage
foreign investors to come to Grand Bahama Island through a variety of tax
exemptions.
This agreement is a contract between the
government of the Bahamas and the Grand Bahama Port Authority Limited (commonly
referred to as simply the Port Authority), a private company founded by
Virginian financier Wallace Groves.
Under the Hawksbill Creek Agreement, the
government of the Bahamas granted the first 50,000 of Crown land in the center
of Grand Bahama Island to the Port Authority and gave the Port Authority the
exclusive right to develop it. In return, the Port Authority was required to
dredge a deepwater harbor; construct an airport, hospitals and schools and
provide other services and amenities. Later, the Port Authority acquired
additional land from the Crown and from private sources, giving it a total of
150,000 acres, or 233 square miles for development.
As an incentive for doing this work, the
government of The Bahamas granted the Port Authority the right to grant business
licenses. Later, the Port Authority was given permission to license casinos and
to develop tourism within the Freeport area.
The cornerstone of the Hawksbill Creek Agreement
is that residents or licensees in the Port Area are free from personal income
taxes, corporate profit tax, capital gains tax, death taxes or property taxes
until 2015.
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"It is also very unfortunate that licensees of
the Grand Bahama Port Authority, being party to the Hawksbill Creek Agreement,
have not been involved in the process as they ought to," Dr. Coakley stated.
"With the second party being cannibalized from within, the government being the
third party to the agreement must now closely weight its options."
Dr. Coakley noted that the government was
previously encouraged to take "a forensic look" at the workings of The Grand
Bahama Port Authority, and circumstances of the day show that the suggestion has
merit. Now the scene is being played out openly in the courts of New York and
elsewhere."
He said that under the current circumstances, the
big question is whether the Grand Bahama Port Authority can fulfill its mandate
as provided for under the Hawksbill Creek Agreement.
"It would seem that every time Freeport tries to
get up something happens to lull it back to sleep," Dr. Coakley stated.
"While every other part of The Bahamas seems to
be well on the development path, Freeport is languishing in apathy and
regression. It is a must that the Hawksbill Creek Agreement be visited, and the
government must get involved in what is going on in Freeport before it is too
late."
Concerns about the state of the Grand Bahama Port
Authority have persisted in recent months, fuelled by the departure from the
Port of top Bahamian executives, including former CEO and Co-Chairman Julian
Francis, the former Central Bank governor who served at the Port for exactly a
year.
The appointment of Austrian-born Hannes Babak as
chairman also fuelled great debate with some suggesting that a Bahamian should
have been appointed to fill that position, and others suggesting that because he
has business interests in Grand Bahama he would clearly be in a conflict of
interest position.
Now, Damian Gomez, Caroline St. George’s
attorney, says his client is considering suing Mr. Babak, claiming that he is
unfairly positioned to benefit from the Port’s profits.
So far, the government has decided to take a
hands-off approach to the present state of affairs at the Port.
Both Mr. Babak and Port CEO Sir Albert Miller
were said to be out of town this week, but a source close to the Port had said
the company planned to release a statement aimed at easing the worries of
licensees and other observers.
The report stated that: "In the midst of
litigation over the ownership and control of the Grand Bahama Port Authority,
the president of the Grand Bahama Chamber of Commerce says "an air of
uncertainty permeates Freeport and Grand Bahama." Dr. Doswell Coakely in a
press statement on Wednesday declared that Freeport continues to drift on the
"sea of nothingness."
