The Lucayan Beach Hotel, in Freeport, Grand Bahama, began life, in the early 1960s, as a result of breathtakingly audacious land deals, payoffs, bribery and bargains. But that’s really just a another typical day, in Island life, in the Bahamas.
Few then, except the insiders, really understood the complicated capital financing, which went into this multi-million dollar hotel/casino operation, and how it all contributed to the Lucayan Hotel’s spectacular series of financial busts, within such a short period of time, from opening.
One simply cannot understand what a gleaming emerald of a jewel the Lucayan Beach Hotel was in its heyday.
In 1964, its bright star could be seen everywhere. From the internationally rich, to the globally famous and the criminally infamous, all walked their tanned skin and Panama hats, through its expensive doors, just to feel the magic of the newest, most glamorous resort playground in the world.
Though just as quickly as it rose from conceptual representation to superlative concrete highs, the Lucayan came crashing down.
From grand private ownership to a desperate midnight purchase by the Bahamas government, in an attempt to save it from a sallow-hole demise and to support the new Bahamianization ideology in the Bahamas, the Lucayan Hotel and Casino seemed destined for a rollercoaster existence.
1962 – 1963 BRIBES, GANGSTERS, WHEELER-DEALERS AND FORMER CONVICTS – BIRTH OF THE LUCAYAN BEACH HOTEL
Through bribes recorded as government consultancy fees for top Bahamian officials, in the United Bahamian Party, Sir Roland Symonette UBP administration, including government minister, Sir Stafford Sands, moonlighting as Groves’s lawyer, Freeport, the Grand Bahama Port Authority and the Lucayan Beach Hotel, was born in 1963.
Wallace Groves secures for himself and his Grand Bahama Port Authority, gambling rights to TWO casinos, blanket tax and customs duty exemptions and unfettered control of the newest city in The Bahamas, Freeport, Grand Bahama. With two casino licenses locked away in the vault, all that was needed was an actual casino.
Mob Gangster and Casino Gambling Financier Myer Lansky
(The Vancouver Sun, Canada, Saturday, 15 November, 1969)
WALLACE GROVES AND LOUIS CHESLER SELL THEIR INTERESTS IN LUCAYAN BEACH HOTEL BUT RETAIN INTERESTS IN CASINO
1963 – Canadian Allen S. Manus president of Molly Corp. the world’s largest producer of wall fastener BUYS a still under construction LUCAYAN BEACH HOTEL at Freeport, Grand Bahama
When Allen S. Manus president of Molly Corp. purchased the Lucayan Beach Resort, he immediately leased the casino portion of the hotel to Grand Bahama Amusement Company.
Lucayan Beach Resort, hotel, casino, golf course and marina, still under construction, was set to be completed and open by December 1963.
(The Palm Beach Post, Friday, June 7, 1963)
1964 – LOUIS CHESLER AND WALLACE GROVES, AFTER SPENDING MILLIONS IN BRIBES TO BAHAMIAN GOVERNMENT OFFICIALS TO SECURE TWO CASINO LICENSES TRY TO PLAY DOWN THEIR INTEREST AND ENTHUSIASM IN GAMBLING
In January 1964, a most extraordinary interview with Wallace Groves and Louis Chesler was reported in the America newspapers.
Both Groves and Chesler said they only had a passing interest in the casino gambling part of the new Lucayan Beach Resort. According to them, casino gambling was of little interest to either of them.
As it turned out, because Wallace Groves was American born, he couldn’t directly hold ownership in Bahamas based casinos. His wife however, qualified. Mrs. Georgetta Groves owned 50% of the new Lucayan casino in her own name and Louis Chesler owned the other half.
Louis Chesler, utter ridiculous nonsense, said that he was so uninterested in casino gambling that he was thinking about giving all his profits from it to charity or the Bahamian government.
After bribing a number of Bahamian government officials, including Premier Sir Roland Symonette, in order to secure two casino licenses for Freeport, Wallace Groves said… “all stock [casino stock owned by his wife] is pledged in trust with the Bahamian government.”
(Fort Lauderdale News, Friday, 17 January, 1964)
1965 – ALLEN MANUS, OWNER AND MANAGER LEASES HOTEL TO GROUP OF GERMAN BANKERS UNDER A NINE YEAR LEASE AGREEMENT JUST AS LABOUR DISAGREEMENT ENDS IN WORKER WALKOUT
Allen Manus, the Canadian hardware millionaire who bought a controlling interest in the Lucayan Beach just two years before in 1963, leases the hotel out to a German consortium.
Manus would receive $500,000 in Hotel rent, $750,000 in casino and shopping arcade rent and 50% of the net profits.
As Manus was getting ready to wash his hands of the Lucayan, due in part to a growing, unpredictable labour dispute by negro workers at the hotel. A 2:00 a.m. dynamite blast, which tore through the ship bunkering facilities of the Grand Bahama Port Authority, was enough to scare of the Canadian investor. Manus leased out the Lucayan to a German banking group, who had grand visions, of bringing a new monied, European clientele to the island resort.
(The Miami Herald, Wednesday, 17 March 1965)
1965 – ATLANTIC ACCEPTANCE CORPORATION, WHO HOLDS MORTGAGE ON LUCAYAN BEACH HOTEL, TAKEN OUT BY MANUS TO BUY HOTEL, GOES BUST AND BECOMES TARGET OF CANADIAN COMMISSION OF INQUIRY. SOON OTHERS MILK ACCEPTANCE CORPORATION OF MORE MONEY UNDER THE GUISE OF INVESTING IN THE LUCAYAN HOTEL.
British Mortgage and Trust Co. loaned money ($1,200,000) to Atlantic Acceptance Corp to purchase MORE shares in Lucayan Beach Hotel in 1963. Atlantic Acceptance Corp. went bankrupt in June 1965.
To support the loan, British Mortgage and Trust was told that the Lucayan Hotel was RENTING its casino to the Grand Bahamian Development Corp. owned by E. P. Taylor ( Lyford Cay developer) and Louis Chesler (who in actuality owned 50% of the casino along with Mrs. Georgetta Groves, wife of Wallace Groves) at an annual rent of $750,000.
On the strength of this information and on the name E. P. Taylor, Atlantic Acceptance made a $1,200,000 loan to LUCAYAN HOLDINGS LTD.
When Atlantic Acceptance went bust in 1965, it had a total of $11,000,000 invested in the Lucayan Beach Hotel.
A giant FOR SALE sign was slapped on the Lucayan Beach Hotel by liquidators of Atlantic Acceptance Corp. of Canada.
(The Leader-Post, Wednesday, 13 July, 1966)
ATLANTIC ACCEPTANCE CORP GOES BUST WITH $11 MILLION LOANED TO VENTURES RELATING TO LUCAYAN HOTEL RESORT
(National Post, Toronto, Canada, Saturday, 19 February 1977)
1969 – LUCAYAN BEACH HOTEL SOLD FOR $13 Million to ANDRE J. ANDREOLI
Atlantic Acceptance Corp. liquidators sell the Lucayan Beach Hotel to Andre J. Andreoli. The Lucayan casino was a separate business from the Lucayan Beach Hotel.
(The Akron Beacon, Wednesday 22 October 1969)
1975 – THE ANDREOLI HOTEL AND BUSINESS EMPIRE COLLAPSES AND SO DOES THE LUCAYAN BEACH HOTEL
1969 – Andereoli buys the Lucayan Beach Hotel complex for $13,000,000 through his company ASSOCIATED EQUITIES, Inc.
1971 – ANDREOLI names himself president and chief operating officer and chairman of the board of all of his various hotel corporations.
1972 – ANDREOLI moves Sonesta Beach Hotel holdings to a subsidiary company carrying $1.3 million in Sonesta Beach Hotel debt with it.
1973 – December 5, 1973, Bahamas Amusements Ltd DECLINES to renew Lucayan Beach Hotel gambling casino operation. ANDREOLI tries to obtain new lease from Bahamian government, but is refused.
1975 – Revenue loss from loss of gambling casino revenue pushes Lucayan Beach Hotel into RECEIVERSHIP in January 1975.
Billionaire Howard Hughes expresses interest in buying Lucayan if government grants casino licence.
(The Akron Beacon Journal, Sunday, 18 May, 1975)
WHO OWNED BAHAMAS AMUSEMENT AND THE CASINO LICENSE
(The Miami Herald, Friday, February 5, 1965)
1976 – PRIME MINISTER LYNDEN PINDLING ANNOUNCES THAT THE BAHAMIAN GOVERNMENT WILL BUY LUCAYAN BEACH IN FREEPORT FOR $3,000,000 ($3 million)
By August 1976, the Lucayan Beach Resort, the hotel once likened to the Monaco of the Caribbean, had been CLOSED for more than a year. It had gone into receivership on January 5, 1975.
The Sonesta Hotel, also once owned by Andre ANDREOLI, was also bought by the PLP PROGRESSIVE LIBERAL PARTY GOVERNMENT, as part of its Bahamianization initiatives, and to keep the tourism industry collapsing under the financial failures of foreign hotel owners.
(The Miami News, Friday 27 August, 1976)
1979 – THE BAHAMAS GOVERNMENT GOES INTO THE HOTEL BUSINESS
By 1979, Canadian Hotel firm, CP Hotels were overseeing operations at the Balmoral Beach Hotel in Nassau, the Lucayan Bay Hotel, The Lucayan Harbour Inn and The Lucayan Beach Hotel in Freeport for the government ministry, The Bahamas Hotel Corporation.
1986 – LUCAYAN BEACH HOTEL REOPENS AFTER BEING CLOSED FOR RENOVATIONS FOR 10 YEARS
(Palm Beach Daily News, Sunday 31 August, 1986)
1993 BAHAMAS COMMISSION OF INQUIRY INTO THE BAHAMAS HOTEL CORPORATION REFERENCES THE LUCAYAN BEACH HOTEL
(The Observer, London, Sunday April 18, 1993)