By NEIL HARTNELL
Tribune Business Editor
Lyford Cay's annual wage bill generates the equivalent of $2,858 for every New Providence household as part of a total $453m economic impact, a government-appointed committee has revealed.
The Economic Recovery Committee (ERC), in an appendix to its 60-page executive summary, said the exclusive community on the island's western tip and associated businesses/facilities were responsible for providing more than 7,000 annual jobs and a $201m annual wage bill.
Drawing on a 2019 economic impact study produced by an Oxford Economics affiliate, which produces similar assessments for other foreign direct investment (FDI) projects in The Bahamas, the Committee said each New Providence household would have to be "taxed an additional $1,286" per year to replace the $90m in annual taxes generated by Lyford Cay.
The study, which appears to have been disclosed to highlight both FDI's importance and to dispel suggestions in some quarters that Lyford Cay and similar gated enclaves generate little for the Bahamian economy, said the community that is home to the likes of Baha Mar founder, Sarkis Izmirlian, accounted for 2.4 percent of Bahamian gross domestic product (GDP) or economic output last year.
"In 2019, the Lyford Cay community generated over 7,000 direct and indirect jobs, which constituted nearly 5 percent of the employment in New Providence," the Committee's report said. "As for income, the community (residents and affiliated businesses) generated some $200m in total income, which is equivalent to some $2,858 for every household in New Providence.
"As for taxes, the residents and businesses of the community paid some $90m to the Public Treasury in 2019. To put this into perspective, each household in New Providence would need to be taxed an additional $1,286 per year to replace the contribution of the Lyford Cay community and its affiliated businesses in taxes and fees."
"Affiliated businesses" were defined as the Lyford Cay Property Owners Association; Lyford Cay Club; Lyford Cay Foundation; Lyford Cay International School; and the Lyford Cay Hospital. Besides Lyford Cay residents, sales from associated businesses were also included by Oxford's Tourism Economics affiliate.
The economic impact will likely have reduced in 2020, due both to the COVID-19 pandemic and closure of the Lyford Cay Club for remodelling. Still, the Committee's report said: "When looking at the direct impact the six arms of the Lyford Cay community have on the domestic economy, the study found that residents and affiliated businesses of the community spent some $238m in 2019 on a myriad of goods and services including retail, lodging, employees, transportation and other operations.
"Likewise, the residents and businesses of the community support over 4,400 jobs, which translated to some $135m in direct labour income."
The $90.3m worth of taxes generated by Lyford Cay were broken down into $35.1m in VAT, which accounted for one-third of the Public Treasury contributions. Real property tax was next highest at $19.96m, with import duties and National Insurance Board (NIB) contributions accounting for $14.77m and $13.21m respectively.
The balance included $6.2m in Stamp Duty, some $0.7m in Business Licence fees and $0.3m in departure taxes.
The Committee's report also focused on a 2016 economic impact assessment conducted on Atlantis, which is now slightly dated. "According to a Tourism Economics study, the Atlantis resort sustained nearly 18,000 jobs in 2015, generated over $200m in taxes and fees, or some 12 percent of total tax revenue, and garnered over $900m in total visitor spend," it added.
"The results of the study found that in 2015 the Atlantis resort generated 10.6 percent of GDP and 9.3 percent of total employment through direct, indirect and induced impact. From 2016 to 2026, the resort is expected to invest some $140m in capital infrastructure, which is anticipated to generate an additional $225m in local spending, $236m in GDP, $152m in wages, and $60m in taxes and fees.
"Thus, by 2026 the resort should sustain 18,666 jobs, which should translate into some $793m in wages and approximately $277m in tax revenue." These estimates will now likely have been revised due to the fall-out from the COVID-19 pandemic.