Baha Mar Courtyard
By TANEKA THOMPSON
Tribune News Editor
tmthompson@tribunemedia.net
THE government has committed to contribute $4 million a year for eight years for marketing of Baha Mar upon the opening of the resort’s casino, according to the heads of agreement signed between the Christie administration and CTF BM.
The document, signed on April 25, was released to the media last night. It outlines a number of concessions granted to the new buyer of the beleaguered resort, including value added tax (VAT) exemption for the project’s completion until the end of 2019 and write off of $10m in casino debt.
And while stressing that there must at all times be “continued efforts” to maximise Bahamian employment at the resort, the government has allowed for the granting of up to 300 work permits for non-Bahamian workers in senior management positions, those with technical or specialty skills including brand management, “where there is a demonstrable need and lack of qualified Bahamian applicants”.
The Heads of Agreement (HOA) notes that after the first 18 months of operation of the resort and casino, work permit numbers are projected to drop to 200.
The resort will also be exempt from the payment of real property tax for 10 years “commencing on the date of opening for business of each facility within the project.”
The HOA also commits the government to solving the long-standing issues plaguing the New Providence Landfill and addressing the issue of unreliable electricity supply in the capital by the end of this year.
The timing of the release of the HOA coincides with the end of the government’s self-imposed deadline to push for the release of the sealed Supreme Court documents relating to the sale of the resort to Chow Tai Fook Enterprises (CTFE). However those documents remain under the court ordered seal and as a result, the sales price and other conditions involved in the process are still unknown.
On the issue of marketing, the HOA states that the government has already invested $16m for co-operative marketing of the resort. Despite this, the government and Baha Mar’s new buyer have both committed to contribute $10m for a marketing campaign to reintroduce Baha Mar to the marketplace, with $5m of this sum due by September of this year.
“During the eight year period commencing on the opening of the new casino, the government shall contribute $4 million per annum towards the costs and expenses of the marketing activities of the project company . . . on a basis to be matched dollar for dollar by the project company.
“ . . . The government has already contributed $16m for co-operative marketing to the project pursuant to the HOA with BML (the previous developer). Notwithstanding any contributions already made, the government further agrees to enter into a co-operative marketing campaign with the project company on a match funding basis, to which the government and the project company will each contribute $10m, subject to substantial progress toward completion of the project.
“ . . .As part of such marketing contribution, by September 30, 2017, the government shall contribute up to $5m towards the costs and expenses of the marketing activities” with the balance to be paid on a date to be mutually agreed, the document notes.
The HOA also notes that in order to complete and open the project, “the project company shall be eligible for exemption through December 31, 2019 from value added tax (VAT) and all exemptions granted under the Hotels Encouragement Act and other existing legislation including, but not limited to, exemption from customs duty in respect of all materials and equipment used in the construction, equipping, furnishing, completing and opening of the project.”
Items covered under this waiver include construction materials, bunker oil and diesel, furniture, fixtures, casino games and equipment and other equipment “required for construction and equipping” of the development.
The HOA continues: “All construction plant and vehicles necessary to equip and complete the project may be imported by the project company and its affiliates (or any contractor employed by the project company, its affiliates or by any subcontractor employed by any such contractor) into and exported from the Bahamas free of customs duties, on a pre-approved basis.”
On the issue of outstanding casino taxes, the document also reveals that the government has written off $10.75 million in casino taxes, which were deferred pursuant to letter agreements between the original developer, Sarkis Izmirlian, and the government. The HOA states that this sum “will not be recoverable by the government and this debt shall not be the obligation of the project company or any of its affiliates or subsidiaries.”
The concessions also state that the new owner will be liable for “any fees, taxes, or other amounts related to casino operation or ownership that were due to the government or Gaming Board, or any other relevant government agency prior to the granting of the casino license.”
Infrastructure
The government has also pledged to make several infrastructure improvements to maximise the resort’s success, including remediation and improved operation of the landfill; take measures to address electricity supply issues in New Providence and take measures to address the completion of a waste treatment facility to be operated by the Water and Sewerage Corporation, with a end of year deadline for these matters to be addressed.
“In the event that the government is unable to address the forgoing concerns by December 31, 2017, the project company shall consult the government as to the alternative measures that may have to be made by the project company to ensure proper operation of the project and the foregoing shall be deemed a force majeure event, provided that if the government’s inability to address the concerns by December 31, 2017 is itself as a result of force majeure, the government’s commitment to address the foregoing concerns shall be extended for a reasonable period of time not less than the duration of such force majeure.”
A ‘force majeure’ is any unforeseeable event that causes elements of a contract to go unfulfilled. The HOA states that in the event of this, the company “shall be excused” from performing and the incentives in the agreement “shall be extended for a reasonable period of time.”
These infrastructure conditions may appear lofty to some observers, as recurrent fires at the landfill have been an issue for years, with a blaze reported at the site just last week. Bahamas Power and Light, formerly the Bahamas Electricity Corporation, has also struggled to provide a consistent power supply since the management of the state-owned utility company was assumed by American company PowerSecure.
Baha Mar held a soft opening on April 21.
Comments
ThisIsOurs 7 years, 6 months ago
This is not the agreement Mr Christie promised to release. The details of that document are still hidden
banker 7 years, 6 months ago
Why should Bahamians pay to market Baha Mar when Izmirlian did it for free and was getting traction until he was screwed by the Chinese and the PLP Chinese surrogates?
BaronInvest 7 years, 6 months ago
Excuse me, but it wasn't the chinese - it was your government. And now you paying the bill for letting them do so.
Alex_Charles 7 years, 6 months ago
Awesome, increase the deficit more will ya.
Don't worry though, the PLP is gonna win by a landslide and Christie will usher in a new era of prosperity and a good life for all with lots of sunshine... If you smoke crack on Dodswell Street.
This administration had invested interest in fking Izmaralian out of that deal, so they fucked the resort and got into bed with the Chinese. Now WE the people are footing the bill for this whole debacle as usual. How many times does this story have to be repeated?
I need to run in 2022, have a platform of thievery, rape and economic stagnation with a promise of a 21st century plantation. I'd win my seat by a landslide. This is what the Bahamas is about. Fking Bahamians and their families for generations.
Awesome.
Sickened 7 years, 6 months ago
You seem upset!
Alex_Charles 7 years, 6 months ago
how can you not be? Are you not tired of this plantation? Sick of the lies and manipulation?
Sickened 7 years, 6 months ago
Oh I am beyond tired of it. The corruption is sickening and having to see those 'okay' signs, when all I see is that one middle finger sticking up at us, honestly makes me want to vomit. The PLP party should be dismantled for what they have done to this country and every cabinet minister should be made to spend their final years behind bars!
BoopaDoop 7 years, 6 months ago
Which crony will get the marketing contract?
OMG 7 years, 6 months ago
Bet Fitzgerald has applied already.
The_Oracle 7 years, 6 months ago
Even the cronies ain't getting much from this crew, They keeping it all within the families!
ohdrap4 7 years, 6 months ago
FYRE THEM!!!
TalRussell 7 years, 6 months ago
Comrades! Can you imagine what today's strength of a UNITED Red Opposition Party would be - if only they had not over the past 5-years - bothered to engage in the most elementary of self-destructive petty internal political fights and stupid distractions?
Considering the relatively weak organizational, financial and lack clear policies state of the readiness of the Red Party for battling the 2017 General Election - how so politically stupid to have wasted sooo many PLP gifts over the 5-year time period!
Sickened 7 years, 6 months ago
If the FNM didn't have so many internal problems this would have been a slam dunk election and I would be looking to upgrade some things in my life. Unfortunately, as it stands now, I'm going to have more stress next week listening to the results.
It goes to show that in order to have an effective government you really need an effective opposition.
TalRussell 7 years, 6 months ago
Comade Sickened, the way Minnis, Eleuthera's Ricky, Freeport's Pintard and Montagu's (Free Town) Wash em, Dry em, Press em, are going about campaigning - you'd think this comes as all new news them four red shirts?
Space 7 years, 6 months ago
And who gets the contract for that? 'Fitzgerald Marketing Extraordinaires' by any chance?
Wouldn't even put it past them.
Regardless 7 years, 6 months ago
Mark Finlayson. CEO
OMG 7 years, 6 months ago
Wow this is a god send for this company with all the incentives. All the while Bahamians struggle with ridiculous power bills, incredibly high food prices, VAT on everything and on some family islands pathetic water supplies.
Islandboy242242 7 years, 6 months ago
Fix the dump and BPL by the end of the year or else what??? The company “shall be excused” from performing and the incentives in the agreement “shall be extended for a reasonable period of time??
DDK 7 years, 6 months ago
Interesting that a government that does NOT have a mandate to run the country for the next five years would sign these horrific contracts with this fooking company two weeks before a general election, with a facility that is still not open for business. Too amazing. Also interesting that the 'new owners' would not be worried about a change in government.
Islandboy242242 7 years, 6 months ago
Could very well become the FNM's cross to bear. And it will be a heavy cross for whoever wins next week.
DDK 7 years, 6 months ago
'TIS A MASSIVE PINK ELEPHANT!
PastorTroy 7 years, 6 months ago
It's interesting to see how a once promising resort has become a major L.I.A.B.I.L.I.T.Y to the Bahamian treasury. No VAT, no customs, we have to pay for marketing, etc, etc These DINO's need to sit their tired backsides down! #WeGettinPlayed
Sickened 7 years, 6 months ago
And all of these concessions after we agreed to complete the resort. We probably owe CCA another couple hundred million dollars to complete and open the rest of the property. The PLP really fooked our country good.
TalRussell 7 years, 6 months ago
Comrades! I questioned at the time the PLP Cabinet had agreed to take the states monies to renovate the Convention Center at the then long closed Baha Mar Resort - if the renovation funds would indeed be paid back by whomever took over the resort? As we blog - the only reason we retain a government, once the House has been dissolved - is to stand by for emergency actions should they occur. There is no ongoing cabinet in place to be signing contracts - that is ILLEGAL. They are not binding on the Public Treasury?
ALL government vehicles and license plates of ALL the politicians should have long been surrender back to whichever department is responsible for the government's fleet vehicles - no exceptions.
There is no longer an active cabinet in place to sign new contracts. No MP, government or opposition, senator, or parliamentary secretary, should be caught cruising around in his/her government issued vehicle...And, if you spot one - tell them you going to call the tow truck?
Sickened 7 years, 6 months ago
Show us the original agreement; not this 'staged' 11th hour agreement!!!!
John 7 years, 6 months ago
If the dirt keep piling up, the country soon need a bigger rug to sweep it under.
bahamiangoddedd 7 years, 6 months ago
Rug won't help us, we need a landfill!
hallmark 7 years, 6 months ago
This HOA seems very skewed toward the prospective purchasers, especially as the government doesn't own the hotel so the funds from the sales isn't going into the treasury but to the owners (the Chinese). So will these incentives be removed from the sealed agreement that has yet to be released? No Double Dipping!
TalRussell 7 years, 6 months ago
Comrades! Ask any man's or woman's on the street corners - just how many man's and woman's arms does this PLP's Baha Mar Octopus have? Only six - cause the other two are the long reaching legs of belonging to the man's Jerome and the woman's Allyson?
banker 7 years, 6 months ago
I was trying romance a communications expert at a fancy restaurant downtown (y'all know which one, the owner sometimes wears jeans at the fancy, price-hefty place) and we got to talking about Baha Mar. Her specialty is branding and communications. I posited that they should have changed the name from Baha Mar, because that name is poisoned to a lot of consumers who booked weddings and such and had to cancel when it didn't open. I asked her opinion as to why in hell they didn't change the name.
She had quite a cogent answer. Sarkis had already spent millions promoting Baha Mar and they want to ride on those millions coat tails instead of spending the money to start branding from scratch. I asked her if this strategy could possibly work. She doubted it because a mega-resort needs to be written up in the media where the customers live, and with the name Baha Mar, every article will at least mention the failure to open several times.
So once again, someone is doing a schitte-poor job on the cheap (just like the hotel was built) and expecting wonderful results.
I still am anxiously waiting to see the booking numbers or the number of tourists on opening day. I een holding my breath.
TalRussell 7 years, 6 months ago
Comrade Banker, I am not so sure that Chow Tai Fook Enterprises (CTFE) would not have been smart to partner up with Izmirlian, to be wooing guests from around the world.
Baha Mar's 'soft opening' is a far cry from Izmirlian's planned grand opening ceremony that had already been contracted out to be produced by Jamie King and Emilio Estefan.
banker 7 years, 6 months ago
Yep -- my rich clients used to subscribe to magazines that you and I are not privy to -- $1200 for a yearly subscription describing the joys and pleasures of having money -- and there was a 4 page spread on Baha Mar in one of them -- and I gatta say, I was impressed, because if you recall, when Sarkis first announced it, I posted here that I didn't think much of the idea.
At the time, I posted that I didn't think that Baha Mar had anything to offer because tourists were looking for experience. However an uber rich hotel just might fly because it is exclusive and keeps the riff-raff out. I don't think that they will get the ultra luxury experience under the current Sino regime.
TalRussell 7 years, 6 months ago
Comrade Banker, I'm still struggling keep up my yearly subscription to Swim with da Pigs magazine,
http://tribune242.com/users/photos/2017…
ThisIsOurs 7 years, 6 months ago
"#This involves the installation “of all supporting infrastructure necessary to support secure and dependable electricity supplies to the project, without the need for unusual load-shedding or other interruption in electricity supply to the project"
LOL, did anyone else see this??? The government is assuring BAHAMAR that THEY will not be subjected to load shedding. By December. ROTFL
Islandboy242242 7 years, 6 months ago
That and the dump will be fixed. Sounds like Bahamar is the best political party because they got everything moving onward and upward. :) Either that or a ticking time-bomb for whoever wins the next election. Countdown 7 months...
Islandboy242242 7 years, 6 months ago
Still don't know why more people aren't talking about this though. Something that has taken decades to fix is supposed to be fixed by the end of 2017 or we got a whole nother can of worms from Bahamar?
concernedcitizen 7 years, 6 months ago
This is not a HOA ,,this is a right before election contract to give a lucrative advertising contract to a crony ,,just another way of getting our money out of our treasury and into PGC,FITZ the new bagman ,Lady Ping and the Barbadians ,AMG, hands .They are a well oiled criminal organization
alfalfa 7 years, 6 months ago
Try opening your own boutique hotel, and see if you get these concessions. To the contrary, they make it almost impossible with their red tape, requirements, that after reading all of the s--t above, seem only to apply to Bahamian developers. I tried, but got turned around at every corner, by government. Any one able to figure out when the Government will earn any money for this deal (other than that earned by those in the negotiation circle)?
TalRussell 7 years, 6 months ago
Comrades! Not just one but a fleet of armored cars - carrying the peoples tax dollars in the many millions is making its way out to the Cable Beach properties. The only question is - who out west awaits the cash delivery? The PLP cabinet is in hot pursuit to tap the public treasury in advance of May 10, 2017.
PastorTroy 7 years, 6 months ago
When you lie down with fleas (pun NOT intended) you eat dogs... (correction) When you lie down with dogs you will catch fleas. These DINO's need a visit to the Vet, on May 10 some will be 'put to sleep' neutered, spade, groomed, however, we Bahamians and those who genuinely love our country must remain united and rise up against this communist invasion! Tell the PM and his crooked AG and others the bed they're laying in with the Chinees is WET & soiled, its time to change the sheets because they already got 'JUICED!' Haaard!! #PerryYouGotJuiceAye?
Well_mudda_take_sic 7 years, 6 months ago
Yet we still don't hear the dimwitted Minnis passionately shouting at each and every campaign rally stomp speech he gives that his government's first order of business would be to arrange for the holding of a Royal Commission of Enquiry! Ask yourself "Why?" Please wake up Bahamians....THINK, THINK, THINK!!!
hallmark 7 years, 6 months ago
This HOA surely puts a lot of pressure on the government AKA the Bahamian People. All those 2017 deadlines for stuff they couldn't complete and fix in 40 years?
alfalfa 7 years, 6 months ago
Well mudda, I hear you saying think, think. think. So should it be an honest "dimwitted" Minnis, or a proven ineffective, and corrupt, Christie. Think, Think, Think. Then honestly say what is the best alternative.
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