Ingraham FNM Govt States Position on Bahamas House

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Rt. Hon. Hubert Ingraham /Prime Minister of The Bahamas

Nassau Bahamas – In parliament Wednesday, Prime Minister Hubert Ingraham stated the government’s position on proposals to assist in repairs and restoration of Bahamas House in Harlem, New York, listing the history of this matter dating back to March, 2006.

Though Fox Hill MP Fred Mitchell accused the FNM government of lacking regard for culture by choosing not to proceed with this matter, the Ministry of Foreign Affairs file on the matter reveals that the former PLP Cabinet in fact never agreed to fund this undertaking, with the Ministry of Finance repeatedly refusing to support various funding proposals put to it on the matter.

Statement by Prime Minister Hubert Ingraham:

Question by MP Mitchell: What is the status of the development of the building (Bahamas House) at 137th Street, Harlem and whether there have been any developments in that matter?

Answer by Prime Minister Ingraham:

Honourable Members will recall that the Deputy Prime Minister and Minister of Foreign Affairs responded to this question by advising Honourable Members that the Government had determined not to proceed with proposals to assist with the repair of Bahamas House in Harlem, New York. The building is owned by the Bahamas American Association Inc. (formerly the Nassau Bahamas Association) and has served as the Association’s Headquarters.

The Member for Fox Hill, in a recent press conference, relayed his disagreement with the Government’s decision and suggested that it reflected my Government’s less than genuine commitment to the promotion of cultural matters and, specifically, its lack of support of Bahamians in Diaspora.

I advise Honourable Members that the relevant Ministry of Foreign Affairs file indicates that a proposal for the Government of The Bahamas to become involved in the repair and restoration of this privately owned building dates to March, 2006. It would appear that up to the time of the general election on 2nd May, 2007 the former administration considered, without success, alternative means of assisting the Bahamas American Association in funding repairs to its building.

All alternatives proffered by the Association appear to require the Government of The Bahamas to assume full responsibility for funding the repair of the building on terms to be arranged by the Association and subsequently, to agree to become the tenant of the building for 100 years, or in perpetuity, but without ownership control.

Nothing on the file suggests that alternative funding arrangements to that proposed by the Association had been investigated or were being investigated by the Government.

Further, nothing on the file suggests that any discussion had been initiated with the US Department of State with regard to the Government’s intention to become involved in this commercial undertaking in the United States of America.

Honourable Members are advised that the acquisition by a foreign Government of real property or the entry into a 100 year lease for real property in the United States of America requires the prior approval of the US Department of State. This requirement is usual and applies, for example, to any foreign Government seeking to acquire fee simple title or long-term lease arrangements for real property in The Bahamas.

It is not clear to my Government that the former Administration’s commitment to assist in this venture was a serious one.

A Chronology of the Government’s consideration of the matter is as follows:

In May, 2006 the Ministry of Finance having been requested to comment on a proposal for the Government to assist in the repair of Bahamas House in Harlem, New York recommended to the Ministry of Foreign Affairs that the Government limit its contribution to the renovation of the building to a donation of $25,000.

The then Minister of Foreign Affairs did not include that recommendation in his submission to Cabinet on the matter.

Rather in June, 2006 Cabinet was advised that funding to repair Bahamas House in Harlem was available from a number of sources in New York City but it was recommended that the Bahamian Government undertake to acquire the building or fund its repair, estimated to cost between $885,000 and $1.75 million.

Further, Cabinet was invited to agree that the Government rent/lease the premises as residences for Bahamian diplomatic/consular officers posted in New York City thereby providing income to the Bahamas American Association.

Cabinet did not agree, instead Cabinet appointed a Committee from the Ministries of Finance, Culture and Foreign Affairs to travel to New York to conduct an inspection of the building to further guide Government’s consideration of the proposal.

The delegation endorsed the earlier recommendation that the Government agree to either:

  1. The outright acquisition of the building and thereafter to undertaking its restoration and use as residences for diplomatic and/or consular officers posted in New York; or
  2. Entering into a 100 year lease of the building so that the lease might be used by the Association to support its loan application to an appropriate institution in New York.

The Association did not agree to any arrangement that would result in the fee simple title of the building being transferred to the Government. Reportedly, the Association is not in a position to transfer title as title is held in trust.

In January, 2007 the Cabinet noted the advice tendered by its appointed Inspection Committee and agreed that the “Committee work with the Ministry of Finance to settle financial arrangements by way of lease to support the project”.

In March 2007 having reviewed the provisions of a proposed Memorandum of Understanding to be concluded between the Government and the Association providing for the perpetual lease of the building by The Bahamas Government, the Ministry of Finance advised that the terms of the MOU were:

“highly unusual in that as a member of the Association the Government will be liable for the loan and as the entity leasing the property in perpetuity would also be the means of servicing the loan. In essence the Government would be fully responsible for Bahamas House without ownership or control.”

As such, the Ministry of Finance indicated that the proposed arrangements as then structured should not be supported.

The Ministry of Finance went on to advise that the Association needed to develop an alternative arrangement which could withstand “independent scrutiny and be compatible to those between the Government and a disinterested third party.”

The file reflects that further meetings were held between representatives of the Government and of the Association and on 2nd April, the Ministry of Finance provided further advice to the Ministry of Foreign Affairs informing that the lease arrangements sought by the Association called for the Government to provide some $13,000 in lease payments during the construction phase of the repairs (representing interest payments on a loan to cover the repairs).

Subsequently, the Government’s lease payments would change subject to market conditions. The cost of funding for the project would have been around 9%, significantly higher than the Government is able to obtain. Again, the Ministry of Finance did not support the recommended funding arrangement.

The Ministry of Finance suggested for consideration whether either the Government or the National Insurance Board might agree to the lease of the building at a nominal rate in perpetuity, undertake the repairs to the building and subsequently have the Ministry of Foreign Affairs relocate its overseas staff from present rented residential accommodation to Bahamas House.

The rent payments by the Ministry of Foreign Affairs would then offset Government’s (or NIB’s) funding of the repairs to the building.

The Ministry of Finance also drew attention to the fact that the proposal from the Bahamas American Association called for a member of the Association to be both the contractor and the project manager. The Ministry of Finance recommended that these two positions be filled by separate entities and that one be subject to competitive bidding.

The former Administration took no further action on these recommendations prior to the May general election.

Given the circumstances my Government has determined not to pursue this matter any further.