An agreement for the resolution of the Cap Juluca’s long-running ownership issue, involving the Anguilla Government, the original owners, Mr. and Mrs. Hickox, and the coming new owners, Carlton Ventures, is expected to take effect on September 30. This is about the fourth date which was set for the completion of the threesome agreement and, by all accounts, the approaching date will now be a reality.
Tuesday, September 27, Chief Minister and Minister of Finance, Mr. Victor Banks, said part of the agreement included the forgiving of a number of taxes amounting to 17 million EC dollars.
He put the matter squarely to the people of Anguilla during Tuesday’s press conference: “When we go to the House tomorrow [Wednesday September 28], and say that we have to forgive a number of taxes, and you ask ‘why are you forgiving these taxes and you are collecting other taxes from Anguillians?’ It is for this reason: The fact is we are forgiving taxes as part of an agreement to save the Government of Anguilla the possibility of a large claim and also to save Anguillian jobs. This is all that we are trying to do, yet a number of people are trying to find all kinds of ways [to criticise this].”
Mr. Banks told media representatives that one of the other issues which the Anguilla United Front Government had to face on coming to office, in April 2015, was the resolution of the Cap Juluca fiasco. He stated: “I call it a fiasco because in 2010, until we came into office, there had been an on-going dispute between a number of ownerships as well as the Government of Anguilla. In fact, when we came to office, the Cap Juluca property was divided in that only three quarters of the rooms were available for operation and opened – and the other quarter was closed down. Because of the settlement of the court issue, which resulted in the property being taken over by the Hickox Group, we found ourselves in a situation where a number of other persons who would have bought into the original owners before they defaulted, were now not prepared to go forward as a consolidated project. That excluded the Brilla Group which owned two and a half villas, I think. There was an individual who also owned villas or part of villas, Mr. Mark Rowan, as well as another gentleman, called Manfredi, and an issue also came up which we only became aware of over the last couple of months – the fact that the name Cap Juluca was owned by somebody else. So it has been a very complex and complicated project to resolve.
Mr. Banks further stated: “When we came to office, the Cap Juluca project did not have a business licence; it did not have an alien landholding licence; and did not have a lease agreement in place. In addition to that, the Liquidator was still in place to settle the debts under the previous ownership, and the Government had refused to grant Cap Juluca an alien landholding licence, a business licence to facilitate the lease process. In addition, there was a lot of negative press out in the wider community about the project including that it was operating illegally and a whole range of other things. The most serious was the fact that the project was operating without being granted an alien land holding licence and without the issue of the lease arrangement being settled by the past Government. Eventually, when the Anguilla United Front Government came into office we decided to put in place a system to allow the property to get an alien landholding licence, and a business licence, to operate so that we could begin to collect the outstanding taxes and revenue which had accumulated in 2010.”
The Chief Minister said the Government realised that a consolidated Cap Juluca was the only way for the project to go forward – and that there was a need to find a buyer to consolidate the project, thus settling all the issues that surrounded the resort for more than 28 years.
According to the Chief Minister, the Hickox Group undertook to make a claim in that they were not allowed by the former Government to operate the resort fully; and the property had suffered from bad publicity and the cancellation of bookings. Further, that Government had refused to accept payments of Accommodation Tax, lease payments and other charges owed by the hotel. The claim made against the Government was in the region of US$25 million.
The Chief Minister went on: “We, as a Government, had to make certain concessions. The Government has been trying to collect all the arrears in taxes that occurred during the time when Cap Juluca did not have a licence. Their argument would have been: we did not have a licence so we could not reasonably be expected to pay the fees that were charged by Government for a number of services…
“The first thing that we had to achieve was to settle this matter going forward. It therefore required that we write off a number of taxes as part of the agreement. Part of the process of writing off taxes is that before the deal is made, we need to go to the House of Assembly to approve that write off. That is available in law.” Mr. Banks explained that the process involved a resolution for the remission of funds owed by Cap Juluca to the Government.
The amounts of money, listed in the resolution to be written off, or forgiven, for Cap Juluca are as follows:
• Accommodation Tax: EC $10,514,604.97
• Tourism Levy: EC$572,425.31
• Interim Stabilisation Levy: EC%$1,116,326.31
• Trade, Business, Occupations and Professions fees: EC$68,400.01; and Valuation and Rating fees: EC$218,621.09
• Lease payments: EC$5,382,581.95
According to the Chief Minister, Cap Juluca’s new buyer is expected to pay about US $70 million for the entire property to the several ownership parties. “We expect that this sale will bring the Government between 12 and 15 million EC dollars in various taxes” principally transfer fees, he disclosed.
