Property Matters – Sandals MoU?

Adam Stewart, CEO Sandals

This is a continuation of my 8 March 2018 article on the Sandals MoU. That MoU was declared as no secret by our PM to the Parliament on 12 October 2017 and that was confirmed by the then CEO of the Sandals group, Adam Stewart, as reported on 27 February 2018 in the T&T press.

My 27 February 2018 request for that MoU under the Freedom of Information Act (embedded below) was therefore made against that background of both parties’ declaration that there was no secret. The Office of the Prime Minister responded on 22 March 2018 to refuse my request, citing that the MoU contained a confidentiality clause which prevented its disclosure at this time. I have since written to the OPM to request a reply in conformity with the provisions of the Freedom of Information Act – I am still awaiting a reply to that letter.

I have now written to Mr Adam Stewart of Sandals Resorts International to request from him a copy of the MoU. (See below)

This is a proposal of high public importance as it is being advanced as an important part of our country’s diversification strategy, so the correspondence is set out in this article.

From: Afra Raymond
Date: Fri, Jun 15, 2018 at 3:41 PM
Subject: Request for Memorandum of Understanding with Sandals Resorts
To: Adam Stewart

Dear Mr Stewart,

I am writing to request a copy of the signed Memorandum of Understanding between Sandals Resorts International and the Government of the Republic of Trinidad & Tobago – it was recently reported that this MoU was signed on 10th October 2017.

There is no doubt that the proposed 750-room Sandals/Beaches Resort for Tobago will be a large-scale, high-impact development, so there an understandable public interest in those proposals. I was therefore greatly encouraged by your emphatic statements that there is no secrecy in relation to the business arrangement or the MoU and that you refuted any secret deals – as reported in the Trinidad & Tobago press on 27th February 2018.

I was therefore astonished that the Office of the Prime Minister replied on 22nd March 2018 to my request for that MoU by citing a confidentiality clause to refuse its disclosure at this time. I wrote to the OPM on 11th April 2018 requesting a clarification and their reply is still awaited. In the interim, I am requesting from you a copy of the MoU in the public interest of transparency in this large-scale development proposal.

For your information, my earlier article on the Sandals MoU was published in the Express Business on 8th March 2018 and can be accessed here. The related correspondence is attached for ease of reference.

Please let me have your reply in due course.

Afra Raymond

afraraymond.net

 

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Property Matters – more Property Tax FAQs part three

property-tax-logoApart from the strong objections to the re-introduction of property tax, there are tantalising points emerging on the need for those taxes to be used to pay for local government services. Local government is one of the sectors which is in most frequent contact with the needs of communities, such as maintenance of drains and playing-fields; garbage collection; road repairs and many other such services.

One of the common positions on this tax is one in which there is no real objection to property tax as such, but there are local government and property valuation concerns expressed. Most of those persons seem to have a strong preference for the property tax to be used to fund their local government services, which then leads to an objection to the valuation approach. Those persons seem to hold the view that the extent to which one property is more valuable than another ought not to be the basis for setting the property taxes, if those properties are using broadly similar levels of local services. One can understand that this approach would appeal to those who own the more valuable properties, but one can equally say that those who own more modest properties would be displeased if their property tax bills were the same as their neighbours with larger and more valuable properties. It is complicated. Continue reading “Property Matters – more Property Tax FAQs part three”

Property Matters – more Property Tax FAQs part two

property-tax-logoThis week I will provide further necessary correctives on the impending re-introduction of the Property Tax, which is not a new tax. It previously existed as House Rates in the five cities and Land & Building Taxes in the other parts of the country.

Tax Evasion

Self-employed and professionals and sole traders have always under-reported their earnings and never paid the correct taxes. Those people often use property as a useful place to store their untaxed wealth. We have never really dealt with this tradition of tax evasion amongst our successful citizens and I cannot remember anyone being imprisoned or having property auctioned due to taxes owed. Whatever my doubts about the motivation of the American Imperium in pushing its ‘anti-tax haven’ agenda, some things do give cause for a pause. For instance, the Financial Times article of 28 June 2017 – ‘Trinidad & Tobago left as the last blacklisted tax haven‘. Continue reading “Property Matters – more Property Tax FAQs part two”

Property Matters – more Property Tax FAQs

The recent series of comments on this Property Tax have prompted my return to this controversial issue. Some of those comments were;

The proposed Property Tax has three main differences from the old system which ended in 2009 –

  1. Revised Valuations – It will be based on updated valuations. In 2009 $143M was raised, the 2017 estimates were for $503M to be raised – the 2018 estimate is $250M, likely due to the delay in passing the required law and the ongoing litigation which is now at the Appeal Court level;
  2. Database – It will require an open database for proper operation. This open database is the decisive element, which I welcome;
  3. Funds – The old system allocated those monies to local government, but the new system directs the Property Tax revenue to the consolidated fund. In my view that is detrimental to proper local government.

Property owners have had an unprecedented tax holiday, with no property tax paid since 2009. At a minimum, using the lower 2009 revenues, $1.287 Billion more remained with our property-owners.

I will touch on three of the most common objections – Continue reading “Property Matters – more Property Tax FAQs”

Property Matters – St Augustine Nurseries, part three

northgrove-planIn writing these articles on St Augustine Nurseries — Part 1 and Part 2 — I found my thoughts returning to those poorest of HDC’s applicants who simply cannot afford to buy. I reflected on the fact that many of our leading citizens emerged from very humble backgrounds which ought to have entitled their families to the benefits of subsidised housing. This is the final article in that mini-series, so I will be locating St Augustine Nurseries within the wider context.

rowley-bookFrom my reading of Dr Rowley’s autobiography ‘From Mason Hall to White Hall‘ it is clear that similar situations prevailed in his own early life. Between pages 32 and 33, Dr Rowley recalls his first visit to Trinidad to stay with his late mother, ‘Vassie’, at her rented home in John John – he was an eight-year-old, so this would have been 1957 or so. The crowded and unhygenic conditions he describes make it clear to me that Ms Rowley’s case was one which would have surely been worthy of public housing subsidy to obtain a better quality of affordable rented housing. Here was a decent, hardworking woman unable to do better, but having to make do, until she was able to move to an NHA home at Coconut Drive in Morvant as described later in the book. At page 35, we are told that Dr Rowley lived there in 1970, so those homes were conceived and built before the 1974 oil boom.

The question arising for me is what are the odds, with all our far greater wealth and supposed enlightenment, for the poor applicant within today’s HDC system. You see?

I am not saying this to personalise a serious public policy issue but rather to fortify the point that all families deserve the opportunity for betterment. Where do we expect our future leaders and doers and thinkers to emerge from?

Our neediest citizens deserve the support of the State, especially in providing a decent quality of affordable shelter. That is an investment in the sustainable future of our society. We must be vigilant to ensure that our common-wealth is not diverted away from its intended beneficiaries. In the case of public housing it is clear to me that the majority of the Public Money invested in the current housing program has in fact been diverted away from the neediest applicants. To be perfectly clear, I am estimating that over 75% of the Public Money spent since the 2002 Housing Policy was published was diverted away from the neediest applicants.

randal-mitchel-at-malick
Former Minister of Housing Randal Mitchell, MP (in suit) at Key ceremony at Hilltop Villas, Malick. Photo: HDC

Exactly one year ago, May 23rd 2017, the then Minister of Housing and Urban Development, Randall Mitchell made an important series of statements at an HDC event to distribute keys for rented housing in Malick –

“…Mitchell said the majority of applicants at the HDC were people earning below $6,000, “those who cannot, even through the affordable rent to own homes programme, cannot qualify to purchase units. So we are now looking to shift policy and concentrate on scarce resources (referring to money) to the construction of rental units.”

He also said Government now has to decide what is the best way to offer subsidised housing.

“The HDC was instructed to look at the policy, where now we can move towards a better, more efficient and a more effective use of the subsidy that Government provides,” he added…”

I could scarcely believe that a Housing Minister seemed to have, finally, gotten the decisive point. In my subsequent dialogue with Mitchell it was clear that he had been properly briefed and was intent on pursuing that direction. Minister Mitchell was recently re-assigned to the Tourism portfolio and of course, I wish him well in dealing with those new challenges.

So what is Housing Subsidy?

That is the amount of money the State spends to provide cheaper housing to applicants in its various programs, be it HDC, Land Settlement Agency or Home Repair Grants, cheaper mortgage rates and so on.

If we take an example of Fidelis Heights at Gordon Street in St Augustine, those were new HDC homes which could sell on the open market for say $1.7M, but were sold to the lucky applicants at prices under $875,000. At the time, the then HDC General Manager, Noel Garcia, made these surprising claims on the issue in relation to Fidelis Heights –

“……the Government had taken a decision not to subsidise this particular development. It is being sold at market rates in HDC’s thrust to expand and attract an open market clientele…”

Of course, there was a massive subsidy allocated to each of those purchasers, but hidden subsidy is one of the features of these situations in which the really egregious examples of benefiting from the public purse are never identified as such, at least not officially. In these class-biased policy environments, the dominant expression is about having to cut the provisions to those who take advantage of the system and so on.

The point in relation to housing subsidy is that the largest subsidies are going to persons who are fortunate to be selected for the most expensive HDC homes. A mere fraction of those sums are allocated to the few modest homes which are built by HDC for rent. The allocation of subsidy needs to be mapped so that we can decide a new and equitable basis for distribution of our country’s limited resources to areas in which it can deliver the greatest benefits.

Of course, this shifts the focus to exactly what is HDC building and for whom. At this time the HDC’s limit on monthly household income for its applicants is $25,000. Affordable housing must, by definition, be affordable to persons earning less than the average wage. The official figures from the Central Statistical Office (CSO) for 2014 state that 60% of the country’s households have a monthly income below $9,000. It therefore stands to reason that the average monthly household income is less than $9,000. So affordable housing could only be intended for persons at that income level.

Given that the HDC’s legal mandate is to provide affordable shelter for low- and middle-income persons, it is clear that HDC must revise its monthly household income limit for applicants, which cannot reasonably exceed $10,000.

The HDC was established in 2005 to replace the older National Housing Authority (NHA) and operates under the provisions of Act No. 24 of 2005. The Corporation is mandated by the Act to:

  • Provide affordable shelter and associated community facilities for low and middle income persons.
  • Carry out the broad policy of the Government in relation to housing.

—Cited from the HDC website About Us page.

That shift would be fundamental and there will be serious institutional resistance, but the facts are stubborn things and our critical public policies must be fact-based. New designs would be required for new homes affordable to persons at that income level and of course and imperative is to repopulate our capital city and use the East POS land already bought by HDC at great expense over a decade ago. But that is for another series.