The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

There is “no way” that Freeport businesses could pay two sets of taxes, a senior private sector executive yesterday urging the Government to “definitely” renew the city’s expiring investment incentives until 2054.

Larry Albury, Freeport Jetwash and Auto Mart’s general manager, said the city’s business community were “scared” that negotiations over real property tax and Business Licence exemptions, which ‘sunset’ on August 4 this year, are being left until the last possible moment.

And he told Tribune Business that the continued uncertainty over their fate was deterring both existing and new investors from injecting much-needed capital into Freeport’s still struggling economy.

The Freeport Jetwash boss summed up the situation thus: “The unknown is your worst enemy.”

Mr Albury’s comments come just before today’s Grand Bahama Business Outlook conference, at which Prime Minister Perry Christie will formally announce the membership, remit and timelines for the committee he has appointed to consult Freeport stakeholders on the city’s way forward.

Tribune Business can reveal that the initial three-man committee has been expanded to five, via the additions of Grand Bahama Chamber of Commerce president, Kevin Seymour, and ex-MP Maurice Moore.

They will join the committee’s chairman, Dr Marcus Bethel, James Smith and Sir Baltron Bethel. All will be working alongside McKinsey & Co, the Government’s management consultants who have produced a report charting Freeport’s future course that will likely be relied upon very heavily by the Christie administration.

The Prime Minister will be delivering the Outlook’s keynote address, and Freeport’s private sector has been abuzz over the past week with speculation that he will deliver a speech to rank alongside the late Sir Lynden Pindling’s ‘Bend or Break’ comments.

That may be ‘over-hyping’ it to some extent, but there is an expectation among the city’s private sector that the Prime Minister may address the issue of the Grand Bahama Port Authority (GBPA) and its ownership.

Tribune Business has been told by several sources of suggestions that the Government has been trying to get Middle Eastern investors, principally from the United Arab Emirates/Dubai/Abu Dhabi area, interested in acquiring the GBPA.

Two contacts said these investors had been present on Grand Bahama over the weekend to explore the opportunity.

While that could not be confirmed, there is little doubt that the late Sir Jack Hayward’s recent passing has brought the matter of the GBPA and its ownership into sharp focus again - especially in the context of Freeport’s continued struggles.

And although the Prime Minister may stop sort of calling for an ownership change, sources close to the situation have suggested he is running out of patience with the GBPA and its leadership to ‘make something happen’ in Freeport.

Mr Christie’s Outlook address also comes amid signs of increased tensions between beneficiaries of Sir Jack’s estate, which is creating growing fears that the GBPA - and Freeport - could be handicapped by a legal battle that mirrors to the recent four-year fight that was sparked by a similar situation involving the late Edward St George’s estate.

Meanwhile, Freeport’s travails continue, with five months left before the city’s key investment incentives expire and no decision in sight on whether or not they will be renewed.

“We’re very concerned and scared that it will be left to the 11th hour,” Freeport Jetwash’s Mr Albury told Tribune Business. “We’ve known about this for years, and now some people are not doing any expansion or coming to invest because August 4 is coming up.”

Asked when he would like the situation to be resolved, Mr Albury replied: “The sooner the better for everybody in Freeport to know what’s going on, new and old. The unknown is your worst enemy.

“People coming to invest here want to know what’s going to happen down the road, and by not knowing no one wants to come here.”

He told Tribune Business that he “didn’t see how” Freeport’s real property tax and Business Licence exemptions could not be renewed until the Hawksbill Creek Agreement’s 2054 expiration, given that they were such critical factors in attracting businesses to locate in the city.

“We pay licence fees to the Grand Bahama Port Authority just like everyone else in the Bahamas pays Business Licence fees to the Government,” Mr Albury told Tribune Business.

“There is no property tax, but we pay service fees to the GBPA. We like living here because it’s clean, we have nice, running water and power. This is the place we came to do our business.

“We’re conducting business just like everyone else and paying our share of taxes in the Freeport area.”

If the expiring ‘August 4’ incentives are not renewed, GBPA licensees face the prospect of being ‘doubled taxes’ - paying licence and Business Licence fees to both Port and the Government, and doing likewise with property tax and service charges.

“There’s no way we could pay two taxes; we can’t pay the Grand Bahama Port Authority and the Bahamas Government,” Mr Albury told Tribune Business.

“That’s why people here want to know what’s going on before the 11th hour.”

He pointed out that despite paying the GBPA and its affiliates for all waste and garbage disposal in Freeport, the city and its businesses were still subject to the Government’s Environmental Levy.

Mr Albury used this example to suggest that Freeport’s economy is a net contributor to the Public Treasury, with fees such as the Environmental Levy helping to subsidise Nassau and other parts of the Bahamas.

His comments echo those of the Chamber’s Mr Seymour, who has called on the Government to come to an early decision on the expiring incentives, so businesses and investors have the necessary clarity moving forward.

Given the Christie administration’s desire to use consultation as a means to an end, that appears unlikely.

The probable outcome is that Freeport will be given a temporary extension to its expiring real property tax and Business Licence exemptions until a longer-term arrangement can be worked out and put in place.