The Tribune

• Collie faces ‘losing it all’ on 40-year investment

• $808k tax payment should ‘give me more time’

• Hopes appeal will provide ‘breathing room’

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian businessman yesterday said he is facing the “nightmare” prospect of losing his near 40-year investment in just 45 days’ time if he cannot pay a $734,222 tax debt owed to the Government

Al Collie, developer of Club Luna and the Zoo before it, told Tribune Business he faces “losing it all” and is exploring every option possible to meet the Supreme Court-imposed September 28, 2021, deadline to settle the outstanding liability or see that West Bay Street property seized and sold.

Disclosing that he and his attorneys will likely seek to appeal Justice Ian Winder’s ruling, so that he gains “some breathing room” to work out his next move, Mr Collie argued it was virtually impossible to raise the sum required within the timeline set by the Supreme Court as banks and other commercial lenders typically required six months to make that sort of sum available.

Justice Winder, on July 29, dismissed the bid by Mr Collie and his Alco Holdings entity to stay/suspend enforcement of the $1.357m judgment that the government had obtained against him for real property tax debts owed on both the Club Luna property and another located at Elizabeth Avenue in downtown Nassau. 

But the businessman yesterday argued he had been given no credit for paying some $807,651 - more than half or 59.45 percent of the outstanding taxes and penalties due - to the Department of Inland Revenue on May 18, 2021, which was some two-and-a-half weeks before the July 6 hearing before Justice Winder.

Suggesting that he was being “singled out” and unfairly targeted by the government, Mr Collie asserted that a payment of this magnitude should have persuaded the Supreme Court to give him more time to settle the outstanding arrears balance.

“It’s a nightmare,” Mr Collie told Tribune Business of his predicament. “It keeps me up at night. I could lose it all. I’m still trying to figure it out. I’m very frustrated. It was 60 days, and now it’s down to 40-something. I don’t come from a wealthy family. I worked my butt off as a musician. I’ve done everything right in this country. I don’t understand what is going on.”

The businessman produced various documents to support his argument that there are discrepancies in the real property tax sums claimed by the Government, along with inconsistencies that he is still disputing and challenging.

Mr Collie alleged his real property tax woes started as a result of successive governments failing to honour the Hotels Encouragement Act agreement he signed in 1989 for the Zoo nightclub and its accompanying rooms component. Construction work on the Zoo began in 1990, he added, and the nightclub and associated accommodation opened in 1992.

The Hotels Encouragement Act document, which has been seen by Tribune Business, gave Mr Collie and his business a ten-year real property tax waiver but it only took effect once operations began. And, if the business was still operating after that time, the waiver was to be extended for another ten years to make 20 in total. Thus, based on the agreement’s language, the tax waiver should have started running in 1992.

However, Mr Collie said it was only after he sought to obtain an extension to the Hotels Encouragement Act agreement when it expired in 2009 - and he was in the throes of constructing Club Luna to replace the Zoo, which had burned down in 2004 under a tenant’s management - that he discovered he had been charged $21,222 in real property tax every year from 1994 onwards.

A 2011 valuation print-out from the Ministry of Finance showed that real property taxes owed on the Club Luna property amounted to a collective $442,792 by that year, with a further $403,116 in “costs” taking the total bill to $845,909.

Asked whether he challenged this at the time, Mr Collie said his arguments got nowhere. “Everything seemed to have been: ‘If you had a problem with that you should have raised it within 30 days’,” he added. “That was impossible as I didn’t know I had to pay any taxes.”

He explained that the real property tax only came to light after inquiries on a new Hotels Encouragement Act agreement were made relating to plans to convert the site to a “courtyard” style hotel in 2009. “All of the stuff I showed you I gave to the lawyers at the time,” Mr Collie said. “The lawyers felt I had a good case because we had the Hotels Encouragement Act agreement and all that.”

With the situation unresolved, Mr Collie proceeded to open Club Luna in 2010 only to close in 2015. Real property tax debts, in the meantime, had continued to mount at the rate of $21,222 per year plus penalties until that latter year.

Club Luna’s real property tax bill jumped more than three-fold in 2015, increasing by 242 percent to $72,684. This was based on the valuation of the West Bay Street land and associated “improvements” also jumping three-fold to $3.884m, which provided the foundation on which the tax was levied.

Mr Collie said no rationale was provided for the sudden and explosive real property tax bill hike, but one explanation is simply that it took the Government and its Valuation Unit some 23 years to reassess the worth of the Club Luna property since it was first valued in 1992.

“I’ve tried to settle the matter out-of-court, yes,” he reiterated, and pointed to his recent payment of more than $700,000. “That’s a lot of money. I don’t understand it. You could have a bank, and if you pay half of what’s owed or more than one-half, they’ll give you a chance to get the full amount, but the judge said I have to do it in 60 days or the building’s gone.

“I’d like to know who this judge thinks I will get that sum from in 60 days. You put in for a loan like that, it takes six months to get it. We intend to appeal, and that will give me some breathing room.”

Some observers, though, will simply argue that taxes are owing and Mr Collie needs to settle his long-standing debt to the Public Treasury. When this was put to him, he replied: “It started off where I never thought I had to pay property taxes because I thought I was under the Hotels Encouragement Act. I tried many, many times, after I found out they were not honouring that, to come to an agreement.”

He added that he knew “tons of people” who had reached agreements with the Department of Inland Revenue and Ministry of Finance over there real property tax debts, and pointed to the success enjoyed by world-famous magician/illusionist, David Copperfield, in defeating the Government’s bid to obtain a summary judgment over their $2m-plus real property tax dispute involving his private Exuma resort destination.

“I was singled out. No question about it,” Mr Collie said. “I was singled out. In every country you have 2-3 percent who want to be entrepreneurs, and you support those people. When you try to break one after the other, break one after the other, it’s going to be a serious economic problem for the life of the country. This is not the country I know. Whatever reason they have for doing what they’re doing to me, I don’t understand.”