~ Govt. looking into possible incentives for all resorts ~
MAHO–The Maho Group, operator of Sonesta Maho Beach Resort and Sonesta Ocean Point, and the Canada-based Sunwing Group, current owner of Great Bay Beach Hotel, have asked Government for soft loans of US $12 million and $43 million respectively from the Dutch Recovery Fund to reconstruct and renovate the three large resort properties to withstand category-five hurricanes.
All three properties were extensively damaged when category five-plus Hurricane Irma hammered the island on September 5, 2017. All three remain closed seven months after the storm.
The request for assistance was sent to Government in late February. The laundry list also covered numerous other items that could also be applicable to other struggling hotel properties that are still shuttered months after Irma.
Finance Minister Michael Ferrier tasked several key department heads on March 6 to review the laundry list and put together “a possible package” they think “could be offered to any/all operator(s) of large resort/hotel properties as incentive to either re-open calamity-ravaged properties, or establish new ones.”
Ferrier urged department heads, when discussing what in their opinion is or is not possible, to come from an angle of “how to get the Hurricane Irma-ravaged island/country economy back on track, while ensuring (through direct, or indirect contributions) that Government can continue to afford to carry out its nut-function.”
Asked about the request package, Ferrier told The Daily Herald on Friday that the civil servants are to advise the Council of Ministers next week on the items that were possible to grant to the resorts. Following that, Government will answer the letter of the Maho Group and Sunwing.
In his March 6 e-mail, Ferrier tasked the Finance Department, to look into the possibility, as requested by the resorts, to exempt them (and their contractors) from the five per cent turnover tax (TOT) for the duration of the (re)construction, for the Inspector of Taxes to issue an exemption within two months after application, and to exempt or waive wage tax for the resorts from September 6, 2017, until the date of reopening for all employees.
The Ministry of Spatial Planning and Infrastructure VROMI has to advise Government on the possibility to grant demolition permits and building permits within 30 days (after a complete application is submitted according to rebuild and/or expand).
In case any statutory notice, publication periods or notice of publication will take place within 30 days after the permits application, VROMI is to advise whether granting of permits can be done within seven days after the notice or publication period has elapsed.
The resorts have requested that zoning permit applications be handled promptly and without delay.
Sunwing wants long-lease water rights for the front of the property for purposes of constructing a jetty and/or marina to the resort. The Maho Group has requested water rights for its Porto Maho Project.
Also requested is the handling within 30 days of the application for the long lease to the parcel of land opposite Great Bay Beach Resort now used for parking and tennis court. Government is also asked to grant extensions of the existing long leases for Great Bay Beach Resort parking and tennis court for a term of 60 years.
The right of long lease for Sunwing for the land now being used as water channel adjacent to the resort to enable Sunwing’s development plans is also requested by the resorts and is to be advised on by civil servants.
The civil servants of the Ministries of Labour and Justice are to advise Government on the issuance to the resorts and contractors of all working and residence permits for foreign workers for construction and certain key positions in resort operations.
Government is asked by the resorts operators to finance and execute a project to replenish, expand and protect Maho Beach for a period of 25 years, connect Great Bay Beach Resort to the public wastewater treatment facility at no cost, extend Boardwalk Boulevard at no cost to the boundary of Great Bay Beach Resort and for water and electricity company GEBE to enter into electricity and water supply agreements against large consumer rates.
The Ministries of Economic Affairs and VROMI are to advise the Council of Ministers on the issuance of hindrance permits required to rebuild and operate the resort, including back-up diesel generators, desalination plants, water-heating facilities and wastewater treatment systems.
Being explored is exempting resorts from ground tax and any duty and/or value-added tax (VAT) and/or sales tax (or any similar or analogous tax).
Low or no tax
The resorts want to enjoy a lower profit tax rate of two per cent, including surcharges, as levied over its realised profits for the maximum allowable term, which shall be no less than 11 years from the date on which the resorts reopen. The National Decree to make this happen is to be submitted to the Governor within 45 days after application.
The resorts call for an amendment to the room tax to make them to exempt from room taxes for a period of five years from the date the resorts reopen. This draft amendment, once positively advised on by the civil servants and approved by the Ministers, will be submitted to Parliament within 45 days.
Once the exemption stops, Government is called on to commit to invest in marketing and advertisement of the destination by at least the same amount that would have been paid by each of the resorts in room tax in the final year of the exemption and thereafter in the amount of any year’s previous room tax.
The Ministry of Economic Affairs is to look into the possibility of exempting resorts from casino licence fees and casino controller fees during the period of time the casinos are closed, issuing Sunwing and Maho Group all business licences and director licences, including any shuttle/tour/excursion services, and membership vacation club licences.
The issuance to the resorts of (renewed) operational licences for resorts, restaurants, bars, shops, pharmaceutical, spa, nightclub, beach chair rentals, dive shops, water sports and beach vending are on the laundry list.
US $1 rent
Government is asked to broker the possibility for the resorts to enter into a lease agreement with Princess Juliana International Airport for the resorts to have a “meet and greet” customer service area for US $1 per annum in perpetuity.
The resorts have also requested that government provide a 50 per cent discount on parking, landing and other fees due to the airport for all airplanes operated by or on behalf of TUI, Sunwing or their affiliates.
The Ministry of Labour is to outline whether it is possible to exempt or waive all resorts from social premiums from September 6, 2017, until the date of reopening for all employees.
Source: The Daily Herald https://www.thedailyherald.sx/islands/75417-maho-group-sunwing-ask-for-us-55m-soft-loan-from-govt