Morgan's Point resort set for tax bill relief
Developers of a $2 billion luxury resort could receive millions of dollars in tax concessions as part of legislation tabled to finalise the land-swap of the former US Navy base lands.
Minister of Works and Engineering Derrick Burgess tabled the Morgan's Point Act yesterday.
It paves the way for Government to exchange land in Morgan's Point, based in Sandys and Southampton, for the Southlands property in Warwick.
In total 80 acres of Morgan's Point will be owned outright by developers Southlands Ltd, and a further 128 acres will be leased out for a period of time not exceeding 262 years.
If passed the Act would give developers planning permission in principle to build a $2 billion tourism resort including a 325-room main resort hotel, 80-room boutique hotel, condominiums, beach villas, golf course, boat club and retail plaza.
The developers will also be allowed to build 60 hotel residences which can be sold to foreigners. A proposed water park is not mentioned in the lease. The property will be built in stages over the next 20 years.
The Act outlines various subdivisions of the land, such as which portions will be used for residential units and which will be used for the hotel.
The developers are looking to reclaim approximately 7.2 acres of land from the sea. They also plan to build a 19-acre marina.
Government outlined the concessions the developers would receive in the first five years of the hotel's operation.
These included offsetting payroll and land tax in exchange for the developers advertising the hotel, educating Bermudians in hospitality and hiring local entertainment.
Stamp duty on fractional units and the hotel's residences will also be lowered.
Stamp duty on fractional units was 18 percent but this has been dropped to ten percent.
If buyers choose to allow their fractional unit to be used by the hotel for nine months of the year, stamp duty will be waived completely. However, if they renege on this agreement within the first five years of owning the unit they will be required to pay 6.5 percent in stamp duty.
In addition to these concessions the developers would also have import duty waived on all items used for construction, furnishings, and fixtures needed to build and equip the hotel.
Government and developers Southlands Ltd agreed to swap the parcels of land in September after years of protracted negotiations, including a public falling out ten months ago.
Environmentalists had fought hard against plans to build a luxury resort on Southlands in Warwick, one of Bermuda's last unspoiled plots, in 2006.
Former Environment Minister Neletha Butterfield granted an SDO the following year.
It was then proposed that Southlands Ltd developers Craig Christensen, Brian Duperreault and Nelson Hunt hand over the Warwick estate to Government in exchange for land at Morgan's Point, the former US Naval Annex.
A Government spokesman announced in September that Southlands would become a national park.
Work on the first phase of the Morgan's Point project an 80-room boutique hotel on the west of the site cannot start until the former base lands have been cleaned.
The US Navy left waste and pollution in the area, including jet fuel and heavy oil plumes, landfill and abandoned fuel tanks.
Government has committed to give the developers “clean” land but has yet to explain how it will pay for the $35 million cleaning cost or when it will take place.
The Act will be debated when the House of Assembly resumes in the New Year.