Dart to take 50% of taxes
(CNS): Dart Realty (Cayman) Ltd will be taking a 50% share of all tourism taxes levied from guests staying in any of its properties for the ten years following the development, renovation or acquisition of any hotel under an agreement it signed in December with government. According to documents, leaked to the North Side MLA, Dart and its affiliates have also been given a 100% duty concession on all materials used in the development of anything for the next 30 years. The deal, which heralded the development of the Esterley Tibbetts Highway, includes some exceptional and unheard of concessions, Ezzard Miller said, as he showed CNS details of what appears to be snippets of a much larger document.
Among the many concessions that Dart can expect under this part of the ForCayman Investment Alliance, which deals with the West Bay Road projects, it will be allowed to keep half of the taxes it collects from guests staying in the hotel it intends to develop on the site of the former Courtyard Marriott or at any other hotel or tourism accommodation that it builds, renovates or even purchases over the next thirty years for ten years after the opening of that property.
Miller pointed out that the move to give a developer taxes that would normally go to general revenue is unprecedented in the Cayman Islands and has never been mentioned in any of the previous public revelations about the ForCayman Investment Alliance. “There is no precedent for anyone in the private sector collecting for, and then taking, a share from government taxes. I have never heard of the private sector being allowed to collect and take taxes,” he said.
He said this will mean many millions of dollars will be lost from government revenue and just the few pages of the deal that have been leaked to him suggest that the ForCayman Alliance is far worse than he had feared. “It is preposterous,” the independent member said of the deal, which has already been signed.
Miller said he has shared the content of the leaked papers with his legislative colleague Arden McLean, the opposition member for East End, both of whom say the entire document needs to be in the public domain so the people of Cayman can judge for themselves if this deal really is for Cayman, as has been claimed.
“We are appealing to whoever sent the pages of the deal that we now have, which includes the signature pages, to send us the full agreement if they have it,” Miller said. “It is very important everyone gets to see this as it seems there is even less benefit to the Caymanian people as a whole in this agreement than we first feared. If this is part of the NRA deal, which we are confident it is, then we have some very, very serious concerns about this.”
McLean said he was stunned by how much Dart has been granted in the deal.
“If Dart is, as we are constantly being told, really for Cayman, how can they demand so much?” he asked, referring to the three decades that the company will not pay any duty as well as the half share of tax the company will be taking from visitors.
He noted that such a potential reduction in revenue was very worrying given the government’s current economic situation, and the MLA raised concerns that if Dart is to purchase an existing hotel, a common speculation given that both the Ritz Carlton and the Westin could be for sale, government would lose an existing revenue stream as well.
“Local people will then have to make up that shortfall through other taxes,” McLean added.
The MLAs also questioned how the deal could have passed muster with the FCO, given that the Financial Framework Agreement signed by McKeeva Bush and Henry Bellingham last year says the UK needs to approve any deals government enters into which would impact public revenue streams.
“It is highly unusual for government to hand taxes directly over to an owner,” McLean added. He said Dart was already getting a massive 100% duty concession on all imports related to future development, as well as the generous stamp duty concessions, which he believed was sufficient to encourage any developer to make an investment. But giving him the taxes was a concession too far that he did not think the people of Cayman could accept.
Both men said that, given the extent of the concessions as spelled out in the schedule, it was very difficult to see any benefit to the community as a whole as government will now collect almost nothing from any development associated with Dart Realty or any of its companies for the next three decades.
“I have always questioned whether this was really designed to help the country and Caymanians on the whole,” Miller said. “Of course, a few people may get some of the jobs but it seems Dart is getting too much and Caymanians are getting too little. These revelations do not calm what are evidently legitimate fears and we shudder to think what is in the rest of the agreement,” he added, as he appealed to whoever it was that sent him the document, who was obviously concerned as well, to send him the entire document.
The North Side representative accused members of the Dart team of being disingenuous about the ForCayman Alliance, as he said many important things are being kept from the people as deals are struck behind closed doors. He said Dart representatives continued to criticise him and make personal attacks, despite the fact that he had reserved his own criticisms for the deal rather than the people involved.
“Given what we have now seen, my criticisms of this deal are well-founded. This will not benefit Caymanians as a whole but it will certainly benefit Dart,” he added.
|Dart agreement 1.PDF||1.4 MB|
|Dart agreement 2.PDF||1.46 MB|
|Dart agreement 3 signatures.PDF||692.23 KB|
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