The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent attorney yesterday urged the Government to require that the Grand Bahama Port Authority (GBPA) and DevCo form a marketing organisation to promote Freeport to international investors, arguing that both had ‘pocketed’ millions in tax savings without providing something in return.

Terence Gape, the lead Freeport-based partner at the Dupuch & Turnquest law firm, in a letter sent to Tribune Business, argued that the failure of the GBPA and Grand Bahama Development Company (DevCo) to form such an organisation meant that Freeport - and Grand Bahama - had “missed out” on the previous decade’s real estate “boom”.

Pointing out that Freeport’s real estate market had remained ‘stagnant’ when compared to the rest of the Bahamas, despite having the advantage of no real property taxes, Mr Gape said the GBPA and DevCo had failed to accomplish something they covenanted to do in 1993.

Responding to the plans for Freeport’s development that were laid out by Dr Michael Darville, minister for Grand Bahama, Mr Gape said he was “perplexed” why the Government was not pushing the GBPA and DevCo to establish a Professional Marketing Organisation (PMO) to promote Freeport to international investors.

He added that both had covenanted, as part of the Freeport, Grand Bahama Act 1993, to establish such an organisation “in an efficient, diligent and timely manner”.

“If the PMO had been established 20 years ago, the island would not be suffering the way it is now, and we would have had continued and motivated growth for these past 20 years, especially to include the period from 2002 to 2008, when the world experienced an explosive real estate investment boom totally missed by Grand Bahama and the Port area (except for the Ginn West End project),” Mr Gape wrote.

He added that the GBPA and DevCo (which is controlled by Hong Kong-based conglomerate, Hutchison Whampoa), had committed in 1993 to fulfilling 21 separate covenants.

Most of these had been met, but Mr Gape said the PMO, as “the most important and the most productive covenant, was never instituted.

“I’m surprised that again this is not being demanded to be done even now, at this late stage, and especially when Freeport is at its lowest point.”

Ian Fair, the GBPA’s chairman, did not return Tribune Business’s call and e-mail seeking comment, despite the latter leaving details as to what it was concerning.

Pressing home his criticism, Mr Gape said the real property tax exemption granted to Freeport was meant to be “an incentive” for the renewed promotion and development of the Port area.

Instead, he argued that the GBPA and DevCo, the latter as the biggest landholder in Grand Bahama, had effectively ‘pocketed’ the real property tax exemption.

Mr Gape estimated that this was worth $5 million annually, or around $100 million over the 20 years since 1993, plus the $2 million per year that was saved from not having to invest in a PMO.

By failing to promote the “considerable tax savings” available to investors in residential property in Freeport, compared to the rest of the Bahamas, Mr Gape argued that the city “has not obtained the advantage that such exemption should have delivered.

“It has consistently lagged significantly behind Abaco, Harbour Island and Nassau/Paradise Island in sales and development for the whole 20-year period top now.”

Referring to the upcoming promotional trips to Panama and Brazil, which the GBPA is participating in, the Dupuch & Turnquest attorney said that while they may develop contacts, a PMO was required to ‘work’ these and develop them into tangible business/investment for Grand Bahama.

He added that his $2 million budget for the PMO did “not seem too wide of the mark”, given Tribune Business’s recent revelation that the Grand Bahama Power Company had been paying $500,000 to the GBPA annually for it to promote Freeport’s economic development.