The incentives that have been given to Sandals by the National Democratic Congress (NDC) government of Prime Minister Tillman Thomas have finally been made public.
The lucrative package was unveiled last week Thursday by Finance Minister Nazim Burke during a reception to mark the acquisition of LaSource by the Sandals Group.
According to Minister Burke, it was agreed that corporate taxes would be waved for 25 years and government also decided to place a cap on property taxes for 25 years, and to wave all import duties, the Value Added Tax (VAT) and Customs Service Charges for 25 years on all capital inputs.
In addition, the world renowned hotel chain received a waver on import duties for 25 years, and VAT for 15 years on consumer goods, as well as a waver on import duties for 15 years on food, alcohol and other drinks, and to cap the VAT for 25 years on occupancy.
The Finance Minister said government took the position that if it had to entice Sandals into Grenada then a little bit more in terms of incentives needed to be done.
Burke pointed out that by taking these steps, the Tillman Thomas-led government recognised that it was doing something special for the country.
“We did it because we recognise the enormous benefit that the presence of Sandals can have and will have for Grenada,” he said.
Minister Burke disclosed that in exchange for the package, Sandals agreed to invest US $100m in Grenada, which would be done in three phases.
In the first phase, approximately US $30m would be spent and it is anticipated that one hundred workers would be employed in the renovation process, and most of the staff compliment of 225 workers who lost their jobs due to the closure of LaSource would be reinstated.
Phase two would see the addition of 65 rooms bringing the number to 165 by December 2013.
Minister Burke said that this phase of the project would involve about US $25m, and that an additional 225 workers would be directly employed in the construction field. As a result the compliment of workers at the hotel would reach 325.
In phase three, an additional one hundred rooms would be built at a cost of US $46m to bring the total capacity of the hotel to somewhere between 250 and 265 rooms will see an increase in the staff to around 425 persons.
The senior government minister said that Congress as a cautious government in dealing with investors, there was no hesitation in embracing Sandals.
“When we heard the name Sandals, we had no such concern because the history and the record speak for itself,” he remarked.
This was clear reference to those foreign investors like E.J Miller of the United States who had duped the previous New National Party (NNP) government on plans to build a luxury Four Seasons hotel in the Mt. Hartman area in the south of the island.
Miller was able to draw down on a government guarantee of just over $20 million with a Belgian Bank for the project but never built the promised hotel.
Minister Burke said the government is pleased to have attracted Sandals as an international brand given its business and investment.
Chairman of Sandals Gordon “Butch” Stewart complimented Minister Burke for the transparent way in which he explained the concessions that are being granted to the group.
“I want to tell him (Burke) that he has not made a mistake because it seems as though in “sandalizing” LaSource we have a significant amount of work that we have to do,” Stewart said.
He announced that it is now more than likely that in the first phase of the expansion work at the hotel that almost 105 rooms would be built.
The Sandals Group has already flown into the island several interior designers, architects, project managers and engineers to start work on the expansion of the hotel.
Stewart promised that the commitment of Sandals that were spoken about by the Finance Minister would be acted upon in a timely manner by his group.