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$315m Lost In Baha Mar Tax

By TANEKA THOMPSON

Tribune News Editor

tmthompson@tribunemedia.net

IT is estimated that the government has lost $315m in tax revenue from the beleaguered Baha Mar resort due its opening delays and the court appointed receivership process, according to an economic impact report of the $3.5 billion property obtained by The Tribune.

Of this figure, the government has lost an estimated $25m in stamp conveyance at a rate of 10 per cent; more than $30m in casino taxes on winnings; $16m in business license fees; $33m in National Insurance Board contributions; $13m in departure tax; $114m in import duty and $81m in occupancy tax/value added tax, among other losses.

The report also estimates that $451m in wages and salaries for direct and indirect workers has been lost, as well as a $48m loss in government utility payments and a gross domestic product (GDP) loss of $1.9m.

The report noted that more than 2,000 direct jobs were lost in 2015 due to the resort being placed into provisional liquidation and later receivership, adding that “the employment impact from (the) project once completed and fully operational (is) uncertain given slower ramp up resulting from delays and reputational damage.”

According to the document, the resort was expected to create more than 9,000 jobs, with 3,000 being direct employment at the property.

The study also revealed that an estimated 800,000 stop over visitors have been lost due to the resort’s opening delays, with each visitor expected to spend $576 per day.

The report takes into account estimated losses over an 18-month period.

Reacting to this revelation yesterday, Free National Movement Senator and former Attorney General Carl Bethel said the party would push for a Commission of Inquiry into Baha Mar if it wins the next election.

He said a large-scale investigation into the resort’s implosion is needed to “name and shame” those responsible.

“I recommended that the FNM should, once we return to office, have a full Commission of Inquiry into this debacle,” he told The Tribune yesterday. “I think that as you know by now, the estimated economic (losses) for this country are a disgrace, but putting aside project figures and numbers, the cost in human capital and lost expectations is equal distressing for this country.”

He said in view of this, there has to be a full accounting of what went wrong at the property.

He said the government’s apparent siding with Chinese entities involved in the project is an “affront to any principal of sovereignty.”

The Export-Import (EXIM) Bank of China is the resort’s secured creditor, while China Construction America (CCA) Bahamas is the property’s general contractor.

“It is unacceptable that Bahamian people are suffering - something went wrong,” Mr Bethel said.

He did not give a timeframe when asked how soon a Commission of Inquiry would be appointed if the Official Opposition wins the next election.

“We don’t want to just throw together any patchwork operation,” he said. “It’s a question of finding the very best people to assist the commission in their work. We’d be looking at a lot of contracts, status reports of the pace of the construction, room audits, so judgment can be made as to who did what.”

Baha Mar’s developer Sarkis Izmirlian filed for Chapter 11 bankruptcy protection in the United States in June 2015. The government vigorously opposed this process, saying it threatened the Bahamas’ sovereignty. The government instead petitioned the Supreme Court to place Baha Mar into liquidation. Baha Mar’s bankruptcy cases for its Bahamian entities were later thrown out of the US court. The reason given was that the Bahamas government made it clear that the US court’s decision would not be recognised because of “sovereignty”.

Mr Bethel said he never bought into the Christie administration’s legal argument for opposing the bankruptcy process in Delaware.

“The government decided that it would intervene for its own reasons and in doing so they basically came to favour one side over the other and that’s why we are where we are.”

Mr Bethel said Prime Minister Perry Christie “damaged” his credibility on Baha Mar through his continued assertions over the past year that good news was on the horizon and that the resort would be open soon. “One thing a prime minister has to be is if he is not liked, not loved, at least he should be believed, he is not any of these things. He is a shadow of what he ought to be and what the office should be. He is a nice man but he has put himself in a position that is untenable.

“He should do the honourable thing and go back to the people and step down.”

The report obtained by The Tribune also notes that other impacts of the resort’s receivership include “reputational damage for the Bahamas in light of project delay and handling of the situation” and “lost marketing spent on promoting the destination.”

In July, Mr Christie said he believes the EXIM Bank is prepared to present a possible buyer for the resort, as he declared a resolution to the Baha Mar debacle was “imminent.”

At the time, Mr Christie, while a guest on the “Ed Fields Live” show on Kiss FM, said the government is “closer than we’ve ever been before” on a resolution to the Baha Mar controversy, and that talks towards the same “have been taking place rapidly.”

Baha Mar was initially expected to open in December 2014 but has been delayed several times since then, something Baha Mar officials have blamed on CCA.

The Supreme Court placed the property into receivership last October at the request of the EXIM Bank.

Comments

ohdrap4 3 years, 7 months ago

i think people want to hear an anti corruption campaign, austerity and fiscal responsibility.

fnm is failing to seize the day, so is the DNA.

the party will just be in someone else's house.

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kaytaz 3 years, 7 months ago

What a waste....this place is so beautiful!!!! Things Dead Good ...words of Perry Christie

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proudloudandfnm 3 years, 7 months ago

But its ok.

The chinese paid Perry and his crew very well....

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Honestman 3 years, 7 months ago

Even if by some miracle Baha Mar were to open for business at some point in the distant future, I doubt it will have any of the vibrancy, excitement and potential that the resort would have had under the control of the original investor. Any new owner of Baha Mar is going to have a huge challenge in re-building the brand, re-hiring top management and making a trading profit in the longer term. Look around the world at the many failed Chinese projects and ask yourself the question: will China be motivated to complete this project unless our hapless government gives them the family silverware in return? China doesn't give a damn about the Bahamas - it's agenda is worldwide domination by use of economic warfare. It can only achieve this with the help of corrupt politicians. The Chinese struck gold in The Bahamas as successive administrations fell into their honey trap. Now China has The Bahamas by the "short and curlies" aided and abetted by Christie and The PLP. A genuine investor has been kicked out of his own project because of a corrupt pact between China and the PLP government and friends. There should indeed be a Commission of Enquiry over this crime against The Bahamian people. What a wonderful opportunity squandered and Christie et al have the temerity to ask us for another five year term?????

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Well_mudda_take_sic 3 years, 7 months ago

Typical Carl Bethel....his only solution to the Baha Mar debacle is to replace the corrupt Christie-led PLP government with what would undoubtedly be an even more corrupt Minnis led-FNM government and then focus on holding a Commission of Inquiry. Not a word from Carl (or Minnis) about what could and should be done to get the project completed and operational at the earliest possible time. We need to get rid of all of these old dead beat incompetent politicians, period!

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Hogfish 3 years, 7 months ago

'Commission of Enquiry' my foot.

Don't makes me laugh. Look what good that did in 85. Jack SHIT.

Jokes and Jackasses. !

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Alex_Charles 3 years, 7 months ago

I think the Bahamian people got exactly what they bargained for. Next election should be better, to ensure that let's vote on emotions again, because that always works. Maybe we'll get another great and glorious leader for 25 years again. We love our Strong man Politics

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TalRussell 3 years, 7 months ago

Comrades! I know you've heard about the extent this newspaper goes to when it comes to the preservation of unnamed sources but the Tribune is now using unidentified surveys to support their front pages news headlines. What in heaven's name could possibly have prevented a newspaper from naming the 'source' of the survey?
The 'survey' contains a number major wacky economic projections that should be obvious to even the most casual observer of tourism economics.
Sure, why not. Just pick your numbers out of a white hat and do the additions and the subtractions while you leave the readers' on their own to believe you?
Why not, generations of your readers have. Right?

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BoopaDoop 3 years, 7 months ago

In case no one has told your ignorant a$$, Bahamians never refer to one another as "Comrade"

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crimestopper 3 years, 7 months ago

I'm so glad you finally said this, it so annoying "comrade this and comrade that", maybe Tal should move to Russia where they say this crap, this the Bahamas "bey".

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Reality_Check 3 years, 7 months ago

The Tribune reporter who wrote this article (Taneka Thompson) should be ashamed of her poor standards as a supposed journalist. She refers to "an economic impact report", "a document", "a study", but fails to mention who commissioned the report and who authored it. Shoddy journalism to say the least and par for the road for The Tribune these days!

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John 3 years, 7 months ago

Bah Mar is basically a dead horse on the track and it will take some time to clean things up. What every Bahamian should concern themselves with is what is going on at The Pointe. What concessions did the government give China Construction on this project? What tax breaks? Why is the construction force still mostly Chinese while so many Bahamians remain unemployed? Who will be operating the Pointe and how many Bahamians will be employed when it is complete? What steps are being taken to ensure The Pointe does not become a second Bah Mar? Is there any truth to the talks that The Pointe is already missing deadlines and will not be completed in 2017? How is it that the government allowed a (Chinese) company accused of creating the problems at Bah Mar and causing the project to miss deadlines and eventually not open to own and construct a competiting property while Bah Mar sits idle with $1 billion or more of the Bahamian assets invested and the chances of opening growing slimmer by the day? A

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Greentea 3 years, 7 months ago

How can the Bahamian government give the same group free reign for the redevelopment of downtown Nassau - historic Nassau - after capable Bahamians have put forward wonderful proposals over the years only to watch them gather dust? I am not against change but the Pointe has ZERO architectural appeal - Just as bad as Flowers office building in that regard. but I guess its new and we sure like 'new tings' Hopefully will be well maintained. At least you cant fault Flowers on maintenance. In fact the government need to take a page from his script. The place is pristine. I feel like getting out my putter every time I pass there.

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John 3 years, 7 months ago

It would be interesting to hear the opinions of some of the persons who were interested in taking over Bah Mar and the reasons why they backed out.

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Greentea 3 years, 7 months ago

Now that is a good comment. If we had real journalists in this country- you might get an answer.

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BaronInvest 3 years, 7 months ago

With the words of Fred Mitchell ... "Bring money, shut up!" http://www.tribune242.com/news/2015/a..." rel="nofollow">http://www.tribune242.com/news/2015/a...

Now didn't that turn out well... Good job!

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killemwitdakno 3 years, 7 months ago

And signing away $2B in Freeport concessions.

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killemwitdakno 3 years, 7 months ago

What report and study?

We need real journalist in this country. I expect ZNS to just be reporting androids but even Cable12 isn't giving us the CNN level questioning.

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killemwitdakno 3 years, 7 months ago

This is all from Baha Mar. It's not lost , it's estimated accountants receivable. Let's get the right terms, forecasted estimated revenue.

They haven't got it yet to lose. (Cause we know that's what will happen anyway).

"Of this figure, the government has lost an estimated $25m in stamp conveyance at a rate of 10 per cent; more than $30m in casino taxes on winnings; $16m in business license fees; $33m in National Insurance Board contributions; $13m in departure tax; $114m in import duty and $81m in occupancy tax/value added tax, among other losses.

The report also estimates that $451m in wages and salaries for direct and indirect workers has been lost, as well as a $48m loss in government utility payments and a gross domestic product (GDP) loss of $1.9m."

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C2B 3 years, 7 months ago

The Chinese got exactly what they wanted; they now control the fate of the government and the Nation. They got it by out-negotiating the Bahamian government. This is reality.

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