Details have emerged for the first time of the package of incentives that the former Keith Mitchell-led New National Party (NNP) government had signed off with Grand prix driver, Lewis Hamilton and his company to woo them to take over the Grenada Grand Beach Resorts.
The NNP-Hamilton deal was signed off by then Governor-General, Sir Daniel Williams, the day before Grenadians went to the polls on July 8, 2008 to elect a new government.
However, the acquisition of the hotel, operated by Trinidad business tycoon Issa Nicholas fell through when the Hamilton Group failed to complete the transaction.
THE NEW TODAY understands that Hamilton’s Time Bourke Holdings (GRENADA) Limited had made an initial downpayment of 4 million to acquire the hotel property from Nicholas but failed to hand over the remaining 36 million by the stipulated deadline.
Hamilton had earlier entered into a separate agreement with Mitchell’s NNP to purchase the freehold lands occupied by Nicholas and his hotel on the world famous Grand Anse beach.
The property was valued at US$15 million and it was agreed that this value would be realized by the grant to the Government of Grenada, “the right to use and reproduce approved photographs and recordings of Lewis Hamilton and Lewis Hamilton’s name, autography and biography for and in connection with the promotion of the State of Grenada for a period of four years…”.
The Hamilton Group is currently locked in a court battle with the Tillman Thomas-led National Democratic Congress (NDC) administration over its decision to put back into the possession of the State the lands that the NNP regime had made available to Time Bourke.
Following is a list of the Incentives package that the former government had entered into with the Hamilton outfit:
(a). Exemption from Corporate Tax, or successor and other like Taxes which replace the Corporate Tax for a period of fifteen (15) years.
(b). A cap on income tax or other taxes on salaries of up to three (3) alien or expatriate managerial staff and directors of land owner as nominated by the land Owner for a period of ten (10) years.
(c). A cap on property taxes for a period of ten (10) years so that the value of each residential property/unit within the Project site is capped at EC$500,000 during the period of this agreement.
(d). Exemption from stamp duties, other duties and taxes related to the purchase of the remaining life of the lease from Issa Nicholas (Grenada) Limited, and on the transfer of the land situate at Grand Anse, St George’s, from the Government of Grenada to TIME BOURKE HOLDINGS (GRENADA) LIMITED.
(e). Exemption from stamp tax, other duties and/or taxes related to loans and encumbrances on the Project during the period of fifteen (15) years and on the purchase contract for first/initial property sales provided for those properties only that are registered within the rental pool/rental programme and let for the accommodation of short term guest for at least 40 weeks in the year. The rate of stamp tax will be capped at the current rate for the period of the agreement for all other property sales and re-sales.
(f). Exemption from the Common External Tariff (CET) and General Consumption Tax (GCT), its successor and any other liked taxes on building materials, articles of hotel equipment, furnishings, fixtures and fittings, boats and other water sports equipment, shrubs, plants, garden, landscaping and agriculture equipment for first installation and equipping of building and facilities within the Project site including the residential units. This exception does not include Custom Service Charge (CSC)
(g). Exemption from the Common External Tariff (CET) and General Consumption Tax (GCT), on construction machinery and spares (if such equipment is not available locally) for exclusive use in the construction of the Project.
(h). Exemption from the Common External Tariff (CET) and General Consumption Tax (GCT), its successor and any other liked taxes on promotional material (brochures) during a period of ten (10) years. This exemption does not include the Custom Service Charge (CSC)
(i). Exemption from the Common External Tariff (CET) and General Consumption Tax (GCT), its successor and any other liked taxes on building materials, articles of hotel equipment, furnishings fixtures and fittings, boats and other water sports equipment, shrubs, plants, garden, landscaping and agriculture equipment for the maintenance and refurbishing of facilities and residential units, villas and condominiums within the Project every five (5) years, provided that the Project is licensed as a tourism resort and that the residential units/properties (villas and condominiums) within the Project are registered in the rental pool/rental programme are made available for let for the short term accommodation of guest. This exemption does not include Custom Service Charge (CSC)
(j). 100% exemption from duties and taxes on a total of six (6) vehicles during the development and operation of the Project; 50% exemption from duties and taxes for four (4) vehicles for use during operation of the Project as a tourism resort provided the Project creates jobs for over 200 nationals and realises annual audited revenue from operation derived from the hotel/residential properties in excess of EC$3,000,000 once the property is fully constructed and operational. This exemption does not include Custom Service Charge (CSC)
(k). 0% property transfer tax to hold shares in TIME BOURKE HOLDINGS (GRENADA) LIMITED, or its successor and on acquisition of properties to be used for the purpose of carrying out the Project.
(l). 0% property transfer tax for the first time sales by the Developer.
(m). 0% property transfer tax for first time property buyers within the Project provided that the buyer is in possession of a signed agreement for the placement of the property within the hotel rental pool/program and the property is available for let for at least 40 weeks.
(n). 2 1/2% property transfer tax, payable by each buyer and seller on all subsequent transfer of property title within the Project provided that each buyer is in possession of a signed agreement for the placement of the property within the hotel rental pool and the property is available for let for at least 40 weeks in the year for the duration of the agreement.
(o). 5% property transfer tax payable by the buyers on the purchase of all other residential properties within the Project.
(p). Exemption from withholding tax on interest charges, license charges, fees, royalties and management charges related to and associated with the operation of the Project as an “approved tourism development”.
(q). Exemption from all taxes on the use, income, sale and benefits of the assignment of the intellectual property rights to the Government of Grenada by TIME BOURKE HOLDINGS (GRENADA) LIMITED and Lewis Hamilton
(r). In addition to the above incentives, the developer will have the right to freely, unconditionally and without hindrance:
* repatriate dividends, earnings and capital from the project
* remit proceeds in the event of sale or liquidation of the company or interest attributable to an investment
* pay interest on international loans
* pay for imports
* pay fees for trademarks, royalties, and management fees and other fees
* pay licensing fees for franchising agreements
(s). to own home countries or to third countries through a corporate body licensed under the Banking Act No. 19 of 2005 to carry on banking business in Grenada subject to the following:
*paying all applicable taxes,
*bankruptcy, insolvency, or protection of he rights of stockholders or creditors;
*circumstances where criminal or penal offences against the develop/company are outstanding before the courts:
*ensuring compliance with orders or judgments in legal proceedings: and
*when there is a balance of payments emergency.