The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government has been urged to address “the gross inequities” in Freeport’s service charges, an outspoken QC suggesting it was among the issues potentially being ignored in its Hawksbill Creek Agreement review.

Fred Smith QC, the Callenders & Co attorney and partner, told Tribune Business there were numerous positive opportunities to reform Freeport’s commercial and governance environment if the Government was “inclusive” in its approach.

He was speaking after multiple Tribune Business sources, speaking on condition of anonymity, confirmed that Prime Minister Perry Christie quietly visited Freeport on Friday to meet with the Grand Bahama Port Authority’s (GBPA) owners.

Members of the Hayward and St George families were understood to have arrived in Freeport for the dinner meeting, during which the Prime Minister was thought to have discussed the Government’s planned approach to Freeport’s investment incentives that expire on February 5, 2016.

The GBPA’s potential sale is also thought to have been on the agenda, with most observer predicting the real property tax, capital gains and income tax breaks will likely be renewed - albeit with conditions attached.

Mr Smith, meanwhile, added that Freeport’s bye-laws could also be brought into “conformity” with central Government laws and policies so that the city’s regulations were consistent with what was happening nationally.

Mr Smith, describing service charges as “the other side of the coin”, said development companies could currently repossess/sell property sometimes worth millions of dollars for miniscule sums owed to them.

“Real estate, property taxes are a real issue,” he told Tribune Business. “Unfortunately, despite my urgings, Hubert Ingraham and Perry Christie, as Prime Ministers and in Opposition, have failed to address the gross inequities which most of the population are subject to in service charges.

“Unless addressed by legislation, service charge companies can take property sometimes worth millions of dollars for mere hundreds or thousands of dollars owed in service charges.”

As a result, Mr Smith said a development company could repossess a $300,000 property for just $2,000 in past due service charges. And, if they subsequently sold it for full market value, the company would pocket the $298,000 differential - and the former owner has no recourse.

“This is one of the areas that the Hawksbill Creek Review Agreement Committee, the Government and the Port Authority should be focusing on,” Mr Smith said, pointing to Freeport’s bye-laws as another.

He explained that these, and the 1968 and 1969 amendments to the Hawksbill Creek Agreement, had given the Grand Bahama Port Authority (GBPA) “a host of regulatory” powers in areas ranging from waste management to jet skis, and recreational parks to utilities.

Acknowledging that this often created friction with Nassau, Mr Smith said: “All these areas, subject to the control of the Port, could be subject to negotiation and the creation of bye-laws that provide conformity, consistency and co-operation with central government legislation and policies that do not apply in Freeport, because it is a state within a state.

“They could be moulded into confluence with bye laws by the Port Authority. There are a lot of issues that are not fiscal in nature, but go to the quality of life of people in Freeport.”

Mr Smith, though, said it was impossible to know whether the Government and its advisers were focused on these and other Freeport-related issues without the provision of more information and better consultation.

“There is so much that can be constructively and positively negotiated if they provide us with the McKinsey report, which has doubtless gone into detail on these issues if properly done,” he added.

“That’s why citizens want to see it, because if it’s not done properly and these issues are not addressed by McKinsey and the Government, then they are ill-informed as to why the tax exemptions should or should not be included.”