I am very pleased to be here today in the historic settlement of West End for the signing of the Heads of Agreement between my Government and the Ginn Company for the development of a mega $3.7 Billion project, the largest resort community project ever to be undertaken in The Bahamas, to be located right here in West End, Grand Bahama.

I am so happy today, to be able to signal to the people of this Island of Grand Bahama which has been devastated by three hurricanes within 15 months, the start of the unprecedented revival of the economy of Grand Bahama.

We have worked hard and long to achieve this milestone in a remarkable partnership with the Ginn Company.  There was a time when they said that this project would never happen.  After encountering some initial difficulties, Bobby Ginn and I met and agreed to move forward.  We both know that the people of West End were looking forward to this development.  My Government knew that Grand Bahama needed this development.  So I sat down with Bobby Ginn and I said, let’s make this work.

My Government is about positive transformation and about empowering The Bahamas and our people.  One of the main priorities of my Government has been to revive of the economy of West End and to do it in such a way that we would lift the economy of the entire island of Grand Bahama.

Well, I am happy to announce that this development that we are launching today is evidence that hope has triumphed and help is here.

West End, you have a noble history in the tourism sector.  Billy Butlin’s Holiday Camp, the Jack Tar Hotel, Old Bahama Bay; your yachting industry, golfing and of course Senator Austin Grant’s famous Star Hotel.  We all know the story.  Then along came Hurricanes Frances, Jeanne and Wilma that inflicted great personal loss and devastated the Grand Bahama economy.

The good news is that we are here today with the Ginn Company which will promote a new era of economic progress and prosperity for the island of Grand Bahama and will usher in the re-development of West End into one of the most attractive tourist Meccas in the entire region of the Americas.

This project will have a major direct impact, certainly from Bartlette Hill come all the way up to the village of West End and indirectly even to points much farther east.  And they will begin immediately!

The Ginn Company is headed by Mr. Bobby Ginn and backed by the Adlers Group, a respected and well known financial institution in the world of international business.  Ginn is one of the largest resort community and real estate developers in the Southeastern United States, with additional communities under development in Colorado and the U.S. Virgin Islands.  This amazingly successful company is one of the foremost developers in the United States.  Their client base, their marketing clout and their record of success in finishing major projects with class and distinction in the shortest possible period, are unmatched among developers.

The Ginn Company has acquired the extensive Sammons holdings at West End comprising almost two thousand acres and has committed to carrying out a $3.7 Billion dollar world class mixed use resort.  The project will contain the following components:

? 4,400 Condominium/Hotel units
? 870 Single family residential home sites
? 2 Championship Golf Courses and Clubhouses
? 2 Large Marinas
? A private airport
? A Casino
? Swimming Pools and Water Park Facilities
? Tennis Complexes
? Beach Clubs and Spas
? Various commercial undertakings and retail businesses which will be operated by Bahamians

The final number of units and auxiliary amenities will be determined by market conditions and will be subject to modification arising from changes which may be required by the Ministry of Health and Environment, the Department of Physical Planning and other relevant Government agencies.

Planning of the project is well underway, and the construction is scheduled to begin as soon as construction permits are issued.  And $80 Million or more will be spent preparing the site for building and sales.

Over the twenty year life of the project, it is estimated that it would inject a cumulative GDP contribution of over $4 Billion into the Bahamian economy.  It is projected that during construction over 3,700 persons would be employed and upon completion of the project over 4,000 new jobs would be created.  In return, the Government has agreed to grant reasonable and appropriate concessions to energize this mega and unique investment.

 Given the significant impact that the Project will have on the entire Island of Grand Bahama specifically and the Northern Bahamas in general, and given the very significant and severe devastation suffered by the entire western end of the Island of Grand Bahama due to the three recent hurricanes, the incentives available under the Hotel Encouragement Act together with other relevant legislation and the payment of fees and taxes would be applied or varied as follows:

• Graduated Stamp Tax as follows:

The following rates apply to the sales by the developer and on all subsequent re-sales of all lots, homes of all lots, homes and condominiums within the Project for the periods as shown.

Initial Sale by Developer    2%
Year 1       3%  (when owned by third party)
Year 2       4%
Year 3       5%
Year 4       6%
Year 5       7%
Year 6       10%  (or then rate at law)

In consideration of the stamp tax concessions that I just discussed, negotiated by
Ginn, we negotiated that Ginn would pay real property taxes, customs duties and room taxes as follows:

• Real Property taxes shall be paid in full for all lots, condominiums/hotels and homes but not on resort amenities.
• Customs Duty shall be paid on the construction of all homes and condominiums not placed in the hotel pool.
• Room taxes payable under the Hotel’s Act shall be paid on all units including condominium/hotels, condominiums, homes that are included in the hotel pool.   In all sales agreements, Ginn shall notify Purchasers of the existence of this tax.
• Business license fees shall be paid in full for operations including brokerage fees on all re-sales.

The concessions available to Ginn under the Hotels Encouragement Act are the same as any other investor.  Special concessions are being given with respect to the Stamp Tax Transfers.  These Stamp Tax concessions amount to approximately 8% of the investment.

You know that Real Property Taxes are not normally payable under the Hotels Encouragement Act.  However, the Government will receive additional revenue from Real Property Taxes as the project will generate $196.8 million in real property taxes on condominiums which will be in the hotel pool.  You also know that occupancy taxes are not normally payable on rooms not in the hotel pool. Ginn has agreed to pay occupancy taxes on homes and the condominiums which are not in the hotel pool.  From this the government will receive additional revenue of over $59 million.

A very important feature of the partnership being forged between the Ginn Company and the Government is the integration of the re-development of the neighborhood of West End.  A private foundation will be established to undergird this innovative initiative.  Based on Ginn’s estimated developer sales, there would be a contribution of approximately $3 million at the first sales launch, with additional funding being made by Ginn to the foundation over the life of the project.

In order to service the needs of the project, the West End area and adjacent areas, the Government and Ginn will work together to create a landfill area to meet the present needs for the waste disposal in West Grand Bahama.

Additionally, Ginn will co-operate with the Government in the extension of its modern infrastructure of water and sewerage facilities to service into the West End community.  These initiatives will create significant economic spin-offs and enhanced quality of life for the residents of this area.

With regard to training, Ginn will collaborate with the Ministry of Education, Bahamas Technical & Vocational Institute, The College of The Bahamas and other agencies designated by the Government.

For this next point, I would invite all contractors and those individuals thinking about employment in the construction industry to pay special attention.  The developer has agreed to offer employment and equal opportunity for qualified Bahamian contractors to participate in the construction bidding process. Ginn has also undertaken to promote joint ventures between non-Bahamian and Bahamian contractors and to ensure that funding arrangements available to non-Bahamian contractors are also made equally available to Bahamian contractors.

One of the best parts of this project is that we will begin to feel its impact right now.  As I said before, the Ginn Company will spend $80 million with Bahamian contractors, just to prepare the land.
 
This project and the way it will be managed is a clear manifestation of confidence by the developers in the economy, Government and people of this nation.  The Government will work closely with the developers to ensure both the future success of the project and the fulfillment of all obligations is in the best interest of the Bahamian people.

In carrying out this development, Ginn is committed to do so within the best environmental, engineering, architectural and landscaping guidelines.  The distinctively Bahamian features of Ginn West End resort community will rival in attractiveness and scope with other multibillion dollar award winning communities developed by Ginn.

On behalf of this Government and the people of West End and Grand Bahama, I wish now to formally welcome Mr. Bobby Ginn and the Ginn Company and this tremendous investment and to assure them of our enthusiasm and our fullest co-operation.
 

December 9, 2005