by Larry Smith
Freeport lawyer Fred Smith is threatening to sue the Grand Bahama Port Authority, on behalf of licensees and landowners, for failing "to act as a responsible municipal, administrative, regulatory and development authority, and to develop, maintain and improve the physical infrastructure and amenities."
Smith represents the widow of the late Edward St George (who was co-chairman of the Port Authority for over 22 years until his death in December 2004) in a legal dispute with Sir Jack Hayward (the other co-chairman) over ownership of the Port companies. A Supreme Court ruling on that dispute is expected on August 30.
On August 24 Smith delivered a letter to the Port Authority, the Grand Bahama Development Company, the Lucaya Service Company and the court-appointed receivers who are supervising Port business pending a resolution of the ownership dispute.
The letter points out a number of issues affecting the future of Freeport that need to be addressed. Extensive excerpts are quoted here:
"Things have reached a critical stage and cannot be allowed to continue. Soon there will be no more Freeport. Your companies are partners with the licensees and residents. Freeport needs attention.
"My clients do not want to fight. They simply want to work and live in a decent community, not a ghetto – which Freeport is fast becoming.
"Unless these issues are taken seriously my clients will be left with no alternative but to bring an action and to apply for the appointment of a receiver and manager of Lusco, and a receiver of GBPA, Devco, FCI and others in respect of service charges, license fees, harbour dues and charges, throughput fees and landing fees. They do not wish to do this!"
Smith points to collapsing infrastructure, lack of maintenance and general neglect of Freeport:
"I write to remind you of your obligations, firstly, that of GBPA as the municipal authority and recipient of license fees under the Hawksbill Creek Agreement and service charges (as well as FCI); secondly, that of GBPA and Devco as the developers of the Port Area, and thirdly that of Lusco as the recipient of service charges, and, fourthly, to each of you as officers and directors having regard to your fiduciary obligations.
"I also remind Devco that it was a party to the Freeport, Grand Bahama 1993 Act, and also therefore that Devco has municipal and developmental obligations under that Act, as well as separate contractual and fiduciary developmental and maintenance obligations.
"My clients have licenses from the GBPA and also own and occupy land, houses, offices, and approved premises throughout the Port Area. Please accept this letter as formal notice requiring your Companies to comply with their municipal and developmental obligations, and the directors to comply with their fiduciary obligations.
"This matter has become critical. Freeport is collapsing under the weight of neglect and incompetence."
Smith says that setting up or conducting a business has become more onerous in Freeport than in the rest of the Bahamas:
"The GBPA’s complete capitulation to illegal central government oversight and interference in the administration of the Port area; the failure to uphold, promote and protect licensee rights; the improper expenditure of income for purposes other than provided for under the Hawksbill Creek Agreement; the partial delegation of licensing rights and duties to Local Government and the challenges arising from the conflicting objectives and preferential treatment brazenly and unapologetically given by the GBPA to the remaining Port Group of Companies must stop!
"My clients require you to protect licensee rights, protect the Port area from discriminatory treatment by central government, conduct business through the GBPA and Devco (as regulatory, municipal and development authorities) responsibly and without conflicts of interests with licensees.
"My clients require your companies to put in place a GBPA city manager, town planners and landscape managers, who are experienced and can dedicate themselves full time, and who are competent to administer the public, developmental and regulatory functions and responsibilities of your companies.
"Similarly for LUSCO, except the board of directors should be changed and populated by interested and responsible land owners and licensees of Lucaya. LUSCO should become a homeowners association.
"The service charges received by LUSCO and the service charges and license fees received by GBPA and its subsidiaries (such as FCI and Devco) do not belong to them. These funds are impressed with a trust and your companies are obliged to spend them on Freeport and to account. My clients ask: 'Where has all the money gone?'
"My clients have been complaining about the collapse of the physical infrastructure throughout Freeport and the deplorable state of the physical amenities and infrastructure at Fortune Bay Unit 3.
"Your companies’ failure to properly develop, maintain and improve the physical infrastructure of the Port Area and Lucaya continues to cause my clients loss and to devalue their properties, businesses and operations.
"It further prejudices the quality of life of residents of Freeport. In addition, your companies’ negligence and willful failure to abide by their obligations also causes danger and health hazards. It also negatively impacts the conduct and development of business and decreases the value of property generally.
"Why, despite the growth of downtown, no sidewalks have been built downtown since 1984? All that exists are the remnants of the past. Just look at the sidewalks at the Mall and Explorers Way, on the doorstep of the GBPA building! Why is there no sidewalk along the Mall in front of the Hospital, in front of the Chamber of Commerce building, along to the beautiful new Courthouse, and in front of all of the new buildings along the Mall? How can you drive past that state of affairs every day and do nothing about it!
"More to the point, do you really think investors are impressed with such a state of affairs?
"We would have expected that since the Port Group is in the business of promoting and developing Freeport, and Devco is in the business of land sales, they would spend time and money on maintenance, repair, improvements and beautification of the Port Area and the Lucaya area so as to seduce buyers to buying land! They would try to make it a desirable place to live.
"We should be selling quality of life. Now we look and smell like the armpit of the Bahamas. You can be sued for negligent town planning…it’s coming!
"Please do something to stop the unnecessary bulldozing down of every pine tree when a lot is cleared. Although there appear to be a lot of pine trees in the Port Area, if careless development continues, one day, in the not-too-distant future, there will be no more pine forests; result, no more fresh water!
"The airport is the most user unfriendly terminal in the world. The domestic facility is an insult to residents. People are tired of being arrested just for dropping off or picking up family members.
"People are being injured and dying at the industrial sites and there is no accountability. And we don’t even have a fire department facility in the entire Port area. And not even any fire, air or sea rescue facilities; or even a decompression chamber! Yet, you want to invite tourists, boaters and yachts and scuba divers? It is criminally negligent on your part as the regulatory authority.
"No wonder Sir Jack Hayward says he is moving to New Zealand!
"It is very important for the Port Group to appreciate that this monopoly which they have under the Hawksbill Creek Agreement is not only a license to enrich themselves! They also have responsibility and duties. “To whom much is given; much will be required.
"It is also crucial for you to appreciate that your actions and inactions do not only impact Freeport. East Grand Bahama and West Grand Bahama, although having their own quaint and less developed histories, are dependent on a vision for Freeport."
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