Major Eleuthera Resort Needs More Rooms

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A government source has claimed the stumbling block in providing an Eleuthera hotel owner with concessions attached to the Hotels Encouragement Act (HEA), is that the property doesn't meet the minimum qualifications for the benefits.

It's a situation brewing around whether the developer of the $22 million Sky Beach Club on the island will be refunded some $200,000 worth of customs duties that would be exempt under the act. While the property does have a Heads of Agreement with the government, duty free imports would only be allowed in the place of the act, which Sky Beach currently doesn't have.

A Guardian Business government source said the difficulty in approving the hotel for that act was because its size fell below the minimum amount of rooms that a hotel should possess to qualify. The island property presently boasts three luxurious bungalows on its property, which falls under the 10 minimum requirement that's listed in the act for the Family Islands.

"The project doesn't qualify for concessions," the source said. "But they have still gotten quite a bit of concessions already, brought in quite a bit of stuff... and they only have a Heads of Agreement.

"The Prime Minister has stated that a Heads of Agreement does not give any investor or business person the authority to import stuff duty free. Only the Hotels Encouragement Act does that [and Sky Beach] did not register under that Act."

Still, Guardian Business understands Sky Beach could be in the process of including at least two of the million-dollar, luxury second-homes near to the property in its hotel pool to make up the numbers. It's uncertain at this time if and when that will finalized.

The matter of the property recouping the $200,000 from government will now be sorted out in the courts, the source said.

The Hotel Encouragement Act was designed to provide support and exemption from the payment of certain taxes, specifically customs duty and real property tax, and to encourage persons to construct hotels to support the tourism industry.

As it now stands, the Hotel Encouragement Act also permits the owners and or operators of hotels to qualify for customs duty concessions on items imported for the new construction and furnishing of hotels and resort properties including hotel owned amenities.

Guardian Business asked Sky Beach Club for a response but no one was available for comment.