Law passed giving taxpayers more protection over hotel plan
New structures are being brought in to protect the Government regarding large financial breaks for Gencom, developers of the $376 million Fairmont Southampton hotel revamp, the Senate heard.
Owen Darrell, the Government’s Senate Leader, said legislation would adjust the method in which tax and customs duty concessions are granted after the reopening of the hotel.
He said: “They are being structured as rebates instead of direct reliefs.
“This change is a critical component of the redevelopment financing structure and a key protection for the Government.
“In simple terms it means that the hotel must first pay the normal taxes or customs duty in accordance with the existing law before being entitled to a rebate.
“In turn rebate payments will flow back to repay the loan that the Government has guaranteed.”
Mr Darrell said the changes were drawn up based on “detailed advice received in the course of the ongoing closing process for the redevelopment of the Fairmont Southampton hotel”.
Douglas De Couto, the One Bermuda Alliance spokesman on tourism, said the Opposition supported the Fairmont Southampton Hotel Act 2023, but queried why the changes had not occurred earlier.
Dr De Couto said: “We commend the Government for revising its approach to providing these financial benefits to this project.
“We in the Opposition support providing the financial benefit to the developer Gencom through a concept of a rebate rather than an upfront relief because it provides better risk management for the people of Bermuda.
“We had great concerns originally about the scope, the size and the amount of work to which these financial benefits applied – which were greater than any other project.
“I am a bit confused as to why the Government didn’t see fit to put in some mechanisms like that in the first place?
“Unfortunately, it’s in keeping with this Government’s, at best, naive management of the people’s money.”
The Senate passed the measure and also agreed to the Vacation Rentals (Application and Registration) Fees Act 2023.
This imposes a levy on people registering a holiday let and was passed despite the Opposition questioning whether it would have a detrimental impact on the number of holiday beds on the island.
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