Wednesday, October 11, 2017
By NEIL HARTNELL
Tribune Business Editor
A prominent attorney yesterday urged that Freeport’s permanent residency investment threshold be cut to $350,000, warning: “Freeport is no longer dying; it’s dead.”
Terence Gape, senior partner at Dupuch & Turnquest, told Tribune Business that the Government needed to use permanent residency as an economic stimulus tool rather than “dampen down investment” as its current policy proposes.
Backing calls by George Damianos, Damianos Sotheby’s International Realty’s president, for the Government to be “a little more creative” with the permanent residency product, Mr Gape questioned why it was “making it more difficult” to attract investors via a ‘one size fits all’ policy.
The Government is planning to increase the investment threshold, above which investors and second homeowners can apply for permanent residency, by 50 per cent from $500,000 to $750,000.
But the prominent Freeport attorney, echoing Mr Damianos, argued that the threshold should be cut by 30 per cent for Grand Bahama and other struggling island economies, slashing it from the current $500,000 to $350,000.
Describing the realtor’s instincts as “exactly right”, Mr Gape said: “I would suggest the correct number for disadvantaged islands should be $350,000, and the one-time fee remain at $10,000 for these islands and others which need special attention.”
The rationale behind Mr Damianos’s proposal was that lower permanent residency thresholds for struggling island economies would entice wealthy foreign buyers to those locations, spreading them throughout the Bahamas and helping to distribute economic activity more evenly, given that the spending generated by their presence will create jobs and boost businesses.
Mr Gape, though, suggested yesterday that the increase announced by Brent Symonette, the minister responsible for Immigration and financial services, showed “no imagination at all” in the Government’s thinking.
“If you increase it to $750,000 for Freeport, we have no hope,” he told Tribune Business. “What’s the point in raising it to $750,000? Is it to signal we only want rich people?
“The permanent residency programme is there to attract someone who is the equivalent of 600 tourists, so why are we making it more difficult? That shows you the Government is totally off the mark. Stop trying to dampen down investment. You’ve got to help the places that aren’t doing well.
“We want to attract people with money. A man with a condo here, and spending two months a year here, how many cruise passengers is he worth when he’s spending $500 a day.”
Average per capita cruise passenger spend is $69 per day, and Mr Gape said Freeport’s real estate market was “labouring” under a further burden created by uncertainty surrounding the Government’s plans for replacing the Grand Bahama (Port Area) Investment Incentives Act 2016.
Given the lack of clarity over whether Freeport’s expired real property tax incentive will be renewed, the Dupuch & Turnquest partner said attorneys were advising foreign real estate purchasers to set aside monies to cover this potential liability.
“We in Freeport are still having to withhold real property tax on every sale of property in Freeport from August 2015, as the Government have still not decided on whether the tax concessions are to be renewed for the licensees or the general public - as the previous Government did for Hutchison and Port Group - leaving everyone else to apply and hope for the best,” he told Tribune Business.
“The only people that don’t pay real property tax in this town now are Bahamians, the Port Authority and Hutchison. What are you going to tell investors? It creates more negativity. Nobody is coming anyway, but it’s creating more negativity. You have a town with question marks over it.
“The licensees remain in limbo some five months after the change of Government as to whether the expired Hawksbill Creek Agreement concessions will be renewed. It’s damn ridiculous.”
Describing Freeport’s economic plight as “a total disaster”, Mr Gape said the city had reached “emergency crisis mode” with the Grand Lucayan’s closure now in its second year, and the Grand Celebration cruise ship on a three-month hiatus in the southern Caribbean for hurricane relief.
Kwasi Thompson, minister of state for Grand Bahama, yesterday said the Government had contracted a ship to replace the Celebration during its absence. He also confirmed that talks were ongoing with the Grand Celebration’s owner to bring a second vessel to the island from spring 2018.
However, Mr Gape told Tribune Business: “We’ve got five cruise ships a day coming in, but these are low-end cruise ships, low-end tourists who only come off the boat for three hours. There’s no impact.
“The only thing we had left was the Celebration. Because they were overnighters, that was a big blow. The Celebration should have been an augmenter, but it turned out to be the best thing we had. No one is raising hell about this. It’s terrible.”
He continued: “Freeport needs a champion. Somebody has got to go out there and put their necks on the block. Freeport is in emergency crisis mode. You can’t save the Bahamas unless you save Freeport.
“This winter, Freeport is so dead that people who own homes and condos here are not coming back because there’s nothing for them to do. There’s no shops, no restaurants, no centre. The uglier it gets. I said Port Lucaya is not going to last until Christmas, and that’s what’s happening. Freeport is no longer dying; Freeport is dead.”