H O R I Z O N S

On the 4th of July weekend,  Cat Cay south of Bimini Bahamas,  has never seen so many customers.  The Marina was overflowing where usually it might only be 50% full.  Historically Cat Cay and Bimini would be a stop over on the  way to more extensive travels throughout the Bahamas but due to the high cost of Fuel,  boaters are content to end their travels in the Bimini Chain,   Just  50 miles from Miami. 

With this decision traveling to the Bimini chain gets the US Boat owner a world away from  South Florida without costing the world to get there.   Likewise many yacht owners who prefer to travel further afield are opting to keep their vessels in The Bahamas in Marinas in places like The Abacos,  Exumas,  Grand Bahama,  Harbour Island and New Providence.  This has the effect of acting as a boon to marina owners in the “Near”  Bahamas,  while marina owners further afield are beginning top feel the pinch. 

The government of the Bahamas yesterday took a big leap in lowering taxes which we believe will be beneficial to the economy.   There are a number of changes afoot that pertain to the real estate industry and will affect our clients and customers.   These are in the property tax areas and stamp tax areas.

The changes are as follows.

The Cap on Property tax of $35,000 per annum for homes valued at over $5,000,000 will be removed

Import duties on construction materials  be removed for the following islands

 • Sweetings Cay and Water Cay (Grand Bahama);
• Grand Cay and Moores Island (Abaco);
• Current Island (Eleuthera);
• Andros;
• Cat Island;
• San Salvador;
• Rum Cay;
• Long Island;
• Crooked Island;
• Long Cay;
• Acklins;
• Ragged Island and Cays;
• Mayaguana; and
• Inagua

Home-owners will become eligible to benefit from the following additional revenue measures:

• exemption from the payment of Stamp Tax (a) applicants purchasing a lot zoned for residential development upon which he/she proposes to construct a primary dwelling place;

(b) applicants purchasing a newly constructed dwelling place; (c) applicants purchasing a dwelling unfit for occupation with the intention of occupying the dwelling upon completion of its renovation or (d) applicants purchasing an existing dwelling to serve as their primary residence.

• exemption from Stamp Tax on the transfer of a mortgage of a dwelling place from one financial institution to another, and exemption from stamp tax where the applicant seeks to consolidate debts by mortgaging a dwelling home up to a value of $500,000.

• First-time homeowners will benefit from an increase in the ceiling for exemption from real property taxes, from $250,000 to $500,000, for the first five years.

Property tax will be reduced to .75% down from  1% on properties valued at over $5,000,000

If you have any questions on how this will affect you please free to call me (john Christie at 242-322-1041) or any of our professional agents throughout the islands.

Yesterday, I found an interesting and fitting set of comments by J.W. “Bill” Marriott, Jr., Chairman and CEO of Marriott International, Inc. in his address to the World Travel and Tourism Council summit last week in Dubai. Today’s post title came from his speech.

Amidst telling the crowd that the Marriott organization was reducing its impact on the environment by buying 50 million recycled BIC pens and offsetting its 2.9 million ton carbon footprint by sponsoring the protection of 1.4 million acres of Amazonian forest, Mr. Marriott inferred that carbon-wise, tourism and travel was a more available - perhaps more responsible - economic activity than manufacturing or primary resource.

Mr. Marriott’s observation is something we in the Bahamas have known for some time, although more from situation than choice. We do not have natural resources in any type of quantity, and secondary manufacturing relies on factors we cannot provide.

Travel and tourism is the lifeblood of our country, whether it be the casual short-term visitor, or those who have a long-term relationship in the form of a second home. We are recently experiencing additional traffic in the form of international travelers other than Americans who are showing a preference for visiting and buying in places other than the US, due to stricter homeland security routines at US airports.

Tourism is The Bahamas largest export, generating much welcomed revenues. But relative to global warming, purity of air, and wasteless use of energy, is our version of operating such activity a responsible one?

According to Larry Smith writing in BahamasPundit.com, the Caribbean region’s carbon intensity relative to GDP is currently the world’s highest. Being a relatively small country, this is not necessarily bad news for the Bahamas. Again, citing information in Mr. Smith’s blog, a reduction of 36% could be experienced with working out our technical inefficiencies, and we could become carbon-neutral with some additional individual effort.

Even the smallest activities contribute. When the issues of global warming were brought to light fifty years ago, nations who lead the charge into global responsibility rallied their early efforts behind, ‘reduce, reuse, recycle’. A growing number of our visitors and new residents come from parts of the world where this not just a slogan but a way of life. Uncomfortably, I have heard their observations many times on how the Bahamas should generate its electricity with solar and wind energy rather than diesel, begin aggressive recycling programs, mandate more efficient transportation vehicles, sail rather than motor (my personal favourite… ), and develop its own agri-food production rather than import.

Certainly not that this is the only reason, but the effects of our country’s aggressive participation in the global effort toward stabilizing the environment translate rather directly to the industry of real estate in the Bahamas. Bluntly, should the world’s icecaps melt, the Bahamas land mass will be surrendered beneath the rising waters.

As the world turns its consciousness to supporting organizations and businesses that clearly demonstrate responsible stewardship of the basics of life - air, water, energy, temperature - it is obvious that it is now well past the time for those of us in the Bahamas to individually and collectively see what we can do right here in our own country toward reducing our nation’s disproportionate carbon footprint.

This works on two fronts - first, we are behind the rest of the world in getting on board. Our effort will do nothing but help. Second, we will most assuredly be passed over as a desirable destination when an environmentally aware prospective visitor finds us lacking in effort.

I’m in Turks and Caicos Islands right now for the Opening of Lucayan Realty, our new exclusive affiliate in the TCI. Things are hectic today, as the opening has caused a good deal of local excitement. We should have pictures for you tomorrow.

Owned and managed by Titus de Boer, Lucayan Realty involves itself in exclusive properties and a prime market of buyers and sellers. This will create synergies for us as we have a number of buyers who are looking to purchase in TCI and vice versa. This way we can help each other’s clientele in a mutually beneficial manner.

Once we get the opening out of the way, we will be sending out a formal news release, and I invite you to watch for this in the next week.

Please enjoy this clip of the Turks and Caicos while I get back to the party…

In the wake of turmoil caused by the announcement that Harrah’s was pulling out of its involvement in the redevelopment of Cable Beach, it seems much has come to light about Bahamian process in the international investment arena.

Once a project with its decidedly huge participants literally gushing in the international business press about the possibilities and potential, (Harrah’s, Heyer’s Starwood Team On Giga-Resort, Forbes Magazine, November 7, 2005), today the Baha Mar project is now struggling to stay alive.

What happened?

Here is a chronology of the significant milestones of this business deal:

November, 2005: One of the largest deals in Bahamian history is announced in late 2005 between world-leaders in hospitality and entertainment and a Bahamian company. The plan is to roll immediately upon receiving government approval.

March 10, 2008: Key partner Harrah’s announces they are not continuing, citing lack of government approvals. Meanwhile, they will continue a Spanish project of roughly the same scope.

Surprising, but that’s about it. The deal died on the vine, waiting for approval.

In an era where in less time than between the first kiss and the last goodbye of this deal, as a matter of necessary business practice, partners of this size assemble, build and begin returns on large projects, overcoming a maze of environmental, regulatory, and code regulations.

In the wake of the bride abruptly leaving the wedding, blame is being meted to every corner, by every corner.

Bahamas Chamber of Commerce President Dionisio D’Aguilar suggests it was the fault of the government for taking too long to approve the project. ( D’Aguilar: Gov’t Took Too Long To Seal Baha Mar Deal Bahamas Journal - Tameka Lundy)

The week previous in the Bahamas House of Assembly, Prime Minister Ingraham relayed his position that he was not satisfied that Baha Mar has the financial resources to pull off the project.

In their last public release, March 10, Baha Mar claims their partners have breached the agreement, alluding that the breach is based on the comments made by Prime Minister Ingraham.

In the same breath as now announcing a few hours ago that Baha Mar approvals have been given, several members of government have now gone on record finely slicing the issue of late government approvals and blaming it on the government of the former Prime Minister, Perry Christie.

To business people, particularly those who deal internationally, I am afraid that the reasons behind this great loss of opportunity are at once simpler and more obvious than being the fault of any one entity.

This is a failure of purpose.

Businesses are not principally driven by faith, morals, ethics, social goals, or promises.

The purpose of a business, any business - for the case of this commentary, the Baha Mar/Starwood/Harrah’s venture - is to make money.

The rule of business is that a venture will inevitably fail when it finds itself in a position where profits are not possible, or where returns are further out than the comfort zone determined in the initial agreement period.

For whatever reasons - or blame if you must - the result is that the time to get a Bahamas venture off the ground is now approaching legendary status in the international business community. Word is getting around, and whatever advantages we had - proximity, tax advantage, etc. - as a country, we do not seem to be able to master the art of the international business deal.

Much as it is painful to contemplate, it seems unlikely that an entity of the size and momentum of Harrah’s will reverse its stance. They are now off chasing their profit potential in what they now consider to be greener pastures.

Rather than look to lay blame for yet another stillborn deal, I think it would be better to consider how to avoid this type of thing in the future.

When business deals seem to be able to be easily created but cannot survive the pre-natal period, it may be time to move some of the power controlling the overall business environment back to the people.

Perhaps it is time to consider evolving our viewpoint of the leadership abilities of our own business community.

Business decisions should be made by the country’s business people, not leaving them entirely in the political. There are several world leading business people in the Bahamas who should quickly be assembled to review every business proposition in front of the Bahamian people.

Under some simple rules such as non-partisanship, no pay for public service, and majority vote decisions, any of the Bahamas business community members now on the Business Development Committee would be in far better position to tell the government which propositions would be likely to succeed or fail.

The government’s role would be to accept the business community’s decisions regarding projects, then serve as a fast-track manager for a positive and swift conclusion of the paperwork involved in regulatory issues.

There are several entities that could serve as the consensus body regarding a submitted business plan - the Chamber of Commerce takes a vital and active role in promoting business direction in other communities and other countries.

I think it is obvious that The Bahamas wants to get to world pace, but that we are frustrated in our attempts. We need to place the responsibility for the solution with ourselves, and stop looking at blame as a mechanism, turning instead to self-empowerment.

Today, we have a tremendous amount of power and responsibility vested in one man who must follow the will of the people, control the purse strings, and lead the charge for international investment.

Leading this charge is just too much work for one person, regardless of how great a man or woman they are. The Bahamas has grown substantially in size and consciousness since this colonial viewpoint of economic management was last effective.

Making our leaders in the business community feel welcome to become responsible for driving the country’s business environment would solve many issues.

Yes, it will undoubtedly create other problems, but it would spread the great workload of quickly making important business decisions for our country to many shoulders, shoulders already accustomed to bearing the load.

We have restarted our online newsletter, ‘Bahamas Real Estate Review’, with the latest for March coming out in the next few days.

An interesting article in this month’s newsletter will present sales statistics from 2007 as an indicator of the Bahamas real estate market.

Our sample base quantity is estimated to be approximately 30% of the total sales culminated in the country last year, enabling a very interesting panorama of what is happening in Bahamian real estate. To our knowledge, this is the only statistical analysis available for our industry, and we are pleased to share the figures.

At any rate, the numbers tend to suggest that real estate values continue to climb, despite the influence of being beside the world’s largest economy as it reels from its own problems.

To read more about what happened last year, you will have to read our March newsletter. We hope you will enjoy the other articles and features there as well, and please watch for the newsletter monthly.

To subscribe, please joining our mailing list on the front page of HGChristie’s main site.

That being said, we had a fantastic time with the old newsletter, and it was quite well received. It was much more than a newsletter. Actually it was a magazine, with upwards of ten articles in each issue.

At the time it was published, we tried very hard to offer articles of lasting interest and to have them contain information that would be continue to be valid for decision-making long past the publishing date.

The articles in our “Bahamas Real Estate Review’ archives remain surprisingly timely and you will still them to be full of some very good information.

If you would like to check them out, you will find them online in the permanent home for ‘Bahamas Real Estate Review’.

The recent generation of Bahamians are coming home in masses, armed with world-class educations, or - pining for home - with cv’s from illustrious careers in corporate America, Britain, and Canada, or from assignments that pointed the people of the world to our country.

Over the last few years, HGChristie team-building has benefited immensely from this rich influx of talent.

Several people joining our ranks during this homeward migration have brought additional strengths to our already great team, and today I wanted to introduce you to Iola Saunders, our most recent sales associate.

Bahamian-born, European-educated, and fresh from the American tourism-business world, Iola is pretty well a poster child for the new Bahamian generation. I think we are just beginning to understand that this generation is developing an amazing potential.

Our newest Estate Agent, Iola’s main thrust is communications, a modern discipline that is very good for our clients, and for our company.

One of the greatest traits in bringing together people in a good real estate transaction is the ability to set a tone of open communication in an environment of current concise information, orchestrating results that over-deliver to the needs and want of the parties.

For us, Iola is the newest of several people now part of our company who represent the new breed of business executive expected at real estate’s business table. Our international clientele is conversant in the ways of efficient business and well-accustomed to smoothly flowing transactions. Iola came to us equipped with well-developed understanding of how to deliver in this arena.

The most exciting part of all this is to contemplate the impact Iola and others just like her are unleashing onto the future of the Bahamas as they come back from the big world to repopulate our country’s workforce.

People talk about tourism, or banking, or shipping as the roots of the economy, but I think the most substantial gain felt by our country in the next twenty years will be created from the depth that people like Iola Saunders and her generation are providing to our communities and businesses.

If you would like to read a little of Iola Saunder’s quite interesting background, please have a look at Iola’s personal area on our main website.

Reading Tameka Lundy’s article in the Bahama Journal the other day:

27th February-PM Predicts ‘Decoupling’ of US And Bahamas Economies

Byline - Prime Minister Hubert Ingraham has introduced the term ‘decoupling’ into the flurry of local commentary on economic prospects for The Bahamas in 2008, suggesting that there will likely be a marked difference in performance between the economy here and that of the United States.

There are several truisms presented by Prime Minister Ingraham that directly affect real estate decisions to be made regarding the Bahamas in the next while.

Of particular interest is the statement that a very large portion of the Bahamian economy is not America-centric.

I agree that the general market place in the Bahamas will be less effected by the current slow down in the US. The Bahamas economy is intimately connected to several world systems, each operating on dynamics quite independent of the recent situation in America.

These include old ties with the British in the form of product and trade agreements, business investment and large holdings by British nationals and expats.

One of the largest port operators in the world - Hutchison Whampoa, operating one of its 45 world-wide ports in Freeport is a large multi-national concern with 220,000 employees world-wide, a number equivalent to approximately two-thirds of the population of the entire Bahamas. They are Hong Kong-based, and a private company. Freeport is its only operation in North America.

Canadian business is active here in the form of banking, investment and operating trusts. The Canadian economy remains buoyant despite its own proximity and interconnections with the American economy.

Businesses from the European Union have become a major player in the Bahamas, with entry of several companies increasing their North American holdings in an environment of favourable taxation and business costs.

Rising from a long history of conservative banking, we also have no banking problems, read bank collapses, problems from involvement in off-market securities, or derivative-based investment programs.

Nassau still remains one of the busiest transit points in the world for international money, due to its banks, trusts and other depositories. It is estimated that a significant portion of these funds - well over half - originate in economies other than American.

The Bahamas is a very good place for an American national to consider as a location for stabilizing value in real estate in particular. So far, land and property values here have stayed on a steady rise, with a continued supply of buyers and sellers from many places in the world.

So, although it is unlikely that there will be no effect felt in the Bahamas relative to the American downturn, it will be found as a pleasant surprise by the more-than-casual observer that America’s woes should not affect us as much.

As they are our nearest and oldest neighbours, we will be sure to keep our eye on things over the next while.

For many properties in the Bahamas, particularly communities such as Harbour Island, Rose Island, Abacos and Exuma, having a boat or two is like having a car anywhere else.

For going about the same island, a 12′ skiff is handy for shopping, moving small items and visiting.

To go island to island, a 16-18 foot runabout with a good solid engine and radio is the standard.

Buying a boat in the Bahamas is much like anywhere else. Buy new and you must carefully select the dealer for such features as good warranty service record, ability to either keep parts or get them quickly. There is a large boating community in the Bahamas, and it is not hard to get recommendations as to who will service you and who will not.

Buying second-hand is also a good alternative, but it is like buying cars or horses. Open the hood, and check the teeth. Understand what you are getting into. Again, a good dealer will also have an inventory of used equipment, and is likely to be more forthright about problems, as they are trying to build or keep a reputation.

You can also have a boat built for you. Abaco and Spanish Wells each have a vibrant boat-building industry, and if they don’t know how to put a good craft in these waters, I don’t know who does.

About the only thing that is different is that you should not make your choice based on one recommendation, for two reasons.

Newbies everywhere have a tendency to take advice from any place offered, and it is a bit of a thing here to consider it polite to offer up praises of someone, even if they are average, and to be thought of as an ‘expert’ in all things Bahamian. Add to that the situation that it seems everyone is related to everyone here. If you just ask one person, you stand a very good chance to find yourself at the receiving end of a glowing recommendation that was offered by someone who was a relative or just doesn’t know anything about the boating subject.

The resident boating community depends heavily on the marinas spotted about the islands, and they are generally staffed by people who love water and boating. You will usually find plenty of good information within their ranks. Seek out the one in your area to access their expertise by talking to the marina’s management.

But above all, get a boat and get out on the water as soon as possible. The Bahamas is just fine for the land-locked life, but is absolute paradise for water people.

Here is a some links to marinas for you to get started on your search. Have fun!

Marinas

Bahamas Marinas Guide
http://www.bahamas-travel.info/marinas.htm

Marinas in the Bahamas
http://www.geographia.com/bahamas/marinas.htm

Caribbean Information Portal: Bahamas Marinas
http://bahiaredonda.com/ip/marinas-bahamas.php

Welcome to the first post in ‘Horizons‘, our new blog site!

We hope to bring you a steady stream of pleasant distractions and diversions, all (sometimes loosely, we admit in advance… ) connected to life in the Bahamas.

Consider this your invitation to use us as your regular coffee-break reading, and to join in if you wish. Mostly we hope that you will enjoy our tidbits, news, and inside info on this wonderful place we call The Bahamas.

Once we get over the excitement of this new way of talking with you, we are going to try to make ‘Horizons‘ a place that you can rely on for fresh informed interpretation of the events and news shaping Bahamas real estate investment.

I’ve started with the first article but over time, you will see contributions in ‘Horizons‘ from the many others in our talented and knowledgeable crew sharing their versions of today’s Bahamas.

Also, please have a look at our new logo, used above in ‘Horizons‘ for one of the first times. Over the next few months, our updated variation is replacing our widely recognized logo of the last fifteen years.

Our new look is meant to symbolize the combining of strengths and tradition from our long history in the Bahamas, with our passion for quickly adopting modern approaches available in today’s world. We feel this is what creates our unique opportunity to present value and benefit to our clients and customers.

So thanks for joining us! Once again, we wholeheartedly welcome you to ‘Horizons‘, HGChristie’s newest exciting way to share our world with you!

Warmest regards,

John Christie