The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Resorts World’s $150 million Bimini expansion project is set to benefit from a ‘double casino tax break’, after the Government permitted it to deduct airport and island infrastructure upgrade costs from these payments.

The details of these, and other investment incentives, are contained in the December 20, 2012, supplemental Heads of Agreement that was signed by the Christie administration to facilitate the Genting subsidiary’s casino joint venture with Bimini Bay’s original developer, the Miami-based Capo Group.

The documents, which were filed with the Supreme Court as part of the recent Judicial Review action that sought to block Resorts World’s construction of its 4.5 acre cruise terminal and associated jetty, reveal that the parties were to enter into another agreement for the upgrade of South Bimini’s airport.

This was to include a runway expansion, the facilitation of night flights, an expanded apron and construction of a new terminal, complete with enhanced fire safety and security systems.

A Fixed Base Operation (FBO) to accommodate private planes is also on the menu, with the airport to be managed either by the Government or a company it appoints.

Resorts World/the Capo Group are financing this, and general upgrades to Bimini’s infrastructure, and the Heads of Agreement commits the Government to effectively paying them back through reduced casino taxes.

“In the event that the developer {Capo Group’s RAV Bahamas] and BB Entertainment {Resorts World subsidiary] contribute financially to the structural upgrade or enhancement to the airport or in Bimini, the Government shall deduct the amounts spent by the developer and BB Entertainment from any casino winnings taxes payable by the developer or BB Entertainment up to a maximum of $10 million”.

This effectively means that the Government, and Bahamian taxpayer, will still be paying for necessary upgrades to Bimini’s infrastructure to support the project - but not via direct capital spending. The payment means will be staggered, and unseen.

The casino tax deduction schedule was to be agreed between the Christie administration and the developers, with the Heads of Agreement also committing the Government to pay $2 million per year, for five years, to help market and promote Bimini and the project.

Resorts World Bimini is to pay an annual basic casino tax of $200,000, with the annual winnings tax set at 10 per cent on the first $10 million, before dropping to a 5 per cent rate thereafter.

Apart from the usual Customs duty exemptions on materials and equipment necessary to build the 3.8 acre Resorts World Bimini casino, the Government also gave this property and any buildings constructed for employee housing a 10-year real property tax break.

A five-year Stamp and Customs duty exemption for all casino games and equipment was also granted to Resorts World’s BB Entertainment, with the incentives previously granted to the Capo Group lengthened for the same period “to enable the developer to complete Phase I of the project, and BB Entertainment to complete the casino”.

Diesel fuel and Bunker oil related to the casino construction were also declared duty-exempt, with the developers given a 20-year ‘break’ from direct taxes being levied on any dividends or debt-servicing interest payments.

The Heads of Agreement also gives permission for the cruise jetty’s construction, although it makes no mention of the planned terminal, and discloses that no economic impact assessment had been conducted prior to the deal’s signing.

The document says 455 new jobs were anticipated, with the casino and new resort generating 150 each, and marina providing 30. And the airport expansion and new cruise terminal and jetty were to generate 25 each.

The final 75, according to the Heads of Agreement, are intended to come from a ‘Nature Park and Eco-Preserve’ that the Government has granted ‘approval in principle’ for.

A Crown Land grant to facilitate this will be forthcoming once approval is granted, with this property to be used for “nature walks and educational experiences”.