Bill For Tax Relief For Bermudiana Beach Resort
A Bill tabled in Parliament seeks to offer relief from customs duty, hotel occupancy tax and exemption from the employer’s share of the payroll tax for a period of ten years for the Bermudiana Beach Resort.
Titled the “Tourism Investment [Bermudiana Beach Resort] Order 2018,” the Bill is in relation to the Grand Atlantic property on the south shore, which is slated to become a hotel called the Bermudiana Beach Resort.
The application for tax relief was submitted by the Bermuda Housing Corporation on behalf of its wholly owned subsidiary Bermudiana Development Company.
In March, it was announced that the property — which was originally planned as a housing development and went on the market in 2012 — will become a “new mid market boutique resort to to be re-named the Bermudiana Beach Resort.”
Renderings of the planned design:
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At that time, the Minister stated, “The project involves the conversion of the existing 78 two and three bedroom condominiums into a full-service condo hotel with resort leisure amenities at a cost in the region of $23 million.
“The majority of the condominiums – 71 in number – are being refurbished with new kitchens and bathrooms, additional windows and new floor coverings. The remaining 7 condominiums are being converted into a reception area, bar, restaurant, meeting room, commercial kitchen, spa and operations support areas.
“Elevators are to be installed in 8 of the 9 condominium blocks on the property. Two swimming pools will be constructed within the resort grounds and two Hill Hiker trams are to be installed to provide access to the beach below.”
““It is anticipated that the conversion works will be undertaken during 2018 and 2019, with an anticipated opening date for the resort of April 2020. The conversion works is likely to provide 70 construction jobs and, once open, the resort will employ approximately 100 persons.
Video of the planned design:
The Bill stated, “Whereas the Bermuda Housing Corporation has submitted an application dated 1 November 2018 on behalf of its wholly owned subsidiary Bermudiana Development Company Limited for a tourism investment order under section 3 of the Tourism Investment Act 2017, as applied by section 138 of the Bermuda Housing Act 1980, in respect of the Bermudiana Beach Resort development;
“The hotel developer shall in respect of the hotel be entitled to the following relief-
- “[a] full relief from customs duty for a period not exceeding 10 years after the hotel’s opening date in respect of any building materials, furnishings, fixtures and equipment which are necessary for the building, furnishing and equipping of the hotel
- “[b] for a period beginning with the opening date and ending with the tenth anniversary of that date, full exemption from hotel occupancy tax otherwise payable in respect of the hotel
- “[c] for a period beginning with the sixth anniversary of the opening date and ending on the tenth anniversary of that date, full exemption from land tax otherwise payable in respect of the hotel
- “[d] for a period beginning with the opening date and ending with the tenth anniversary of that date, exemption from the employer’s share of the payroll tax otherwise payable in respect of persons employed by the hotel
- “[e] a deferral of the land-holding charges payable under section 96[2] of the Bermuda Immigration and Protection Act 1956 [if so authorised by regulations made under section lO2C[l]{a} of that Act] for a period not exceeding ten years alter the hotel’s opening date;”
The Tourism Investment [Bermudiana Beach Resort] Order 2018 follows below [PDF here]:
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How is that government subsidy fair to other
hotels? And there are plenty struggling. Or have they had similar concessions?
What the??!! Are Bermudians going to be allowed access to the beach?!?!
Any time the OBA gave tax concessions the PLP whined about it, called it ‘corporate welfare’, and organized a march against foreigners.
Whoa! This is completely wrong!
Those same exemptions must be provided to all hotels and to vacation rentals!
The BHC is now in a position of having an unfair competitive advantage in the tourism business. Why? Because the PLP built a disaster and are now trying to fix it?
Unbelievable!
These condos have already cost Bermuians millions of dollars and based on history will cost Bermudiians millions more. The Order does tie the developer down to some ‘terms & condition’ history shows that “relief” is always extended there too. There is no one auditing developers tax relief to see if the tax relief was a good or bad investment. Just because other developers got tax relief it does not mean the government has to continue the practice. The tax reliefs are a major factor in the huge deficit that continues to pray on the Bermuda economy. Who is financing the development???
Do we know who owns Bermudiana Development Company Limited?
Bermudiana Development is controlled by Robert MacLellan, Managing Director MacLellan&Associates. MacLellan’s experience includes manager of Holday Inn Bermuda. MacLellan in 2016 bought Grand Atlantic from Bermuda Housing Corp. for bargain price of $9M paid over four years. MacLellan had expected to develop sooner but had some delays with financing. BHC, essentially the government, after the sale still owed Butterfield Bank $36M on Grand Atlantic. It is impossible for Bermuda to recover the millions already lost let alone the future millions.
Couple sticks of dynamite don’t cost much!!
That beach disappears in almost all big storms, the current sea wall in place is already separated from the cliff and anything built on the bottom of the cliff will be washed away in any hurricanes. Dopey.