Westin made promises, but never followed through

POSTED: 03/16/11 12:41 PM

Government ready to honor 2005 letter of comfort, but

St. Maarten / By Hilbert Haar – When the Executive Council sent its letter of comfort to the president of the Columbia Sussex Corporation a bit more than six years ago on March 11, 2005, the developer of what is not the Westin hotel probably could not believe his eyes – so forthcoming was the government of the island territory. A bit more than a month later, Yung returned part of the favor in a letter dated April 18, 2005. In it, he made at least two promises the company never lived up to, and disgruntled Dawn Beach residents now wonder why the government is ready to honor its letter of comfort to a company that never lived up to its own promises.

The government’s promise to honor the letter of comfort follows a legal fight between Westin and utilities company GEBE over the rate the resort has been paying for its water.

Columbia Sussex addresses six points in the April 2005 letter to then commissioner Roy Marlin, in a reaction to comments from various neighbors. Under point 3, Yung reported: “The hotel and other buildings will be set back at least 100 feet from the sea.” Neighbors say that various structures are way closer to the sea and that therefore Columbia Sussex did not live up to this promise.

The second promise reads, under point 4: “We will install a sewage system that will handle the sewage of all the development and some neighbor’s waste water.” Up to this day, no neighbor has been connected to the Westin system, so that is considered strike two.

On the other hand, the letter of comfort to the developer runs five pages and is signed by the Lt. Governor and by the Island secretary on behalf of the Executive Council. The developer requested “several concessions,” but according to the Exco, some of them fell outside its competency. “Our council is however willing to lend support in terms of securing these concessions from the appropriate authorities – the federal government of the Netherlands Antilles.

The first concession concerns the number of foreign work permits for the resort. The Executive council set a quota of 20 percent, but pointed out that local students in the field of tourism and hotel management need jobs in the sector. The Exco’s policy focused on enabling our young professionals to work their way up into positions which are currently held by non nationals.”

The Exco proposed a partnership agreement designed to reduce the work permit quota for foreigners from 20 to 10 percent within the first four years of operation.

The Exco agreed in the letter to grant the developer a general contractor’s license within thirty days. “We would allow the importation of foreign construction expertise and workers who however must align with locally established construction companies,” the Exco wrote.

It pointed out that heavy equipment operators are already on the island and that there is no need to import machinery or companies active in this field.

The Exco wrote that it had “adopted a policy of reduced water rates for large consumers. This is the main bone of contention between the Westin and the utilities company. The Exco estimated the Westin’s water consumption in excess of 100,000 cubic meters. “As such you will qualify for a rate equal to $3.05 per cubic meter.”

This remark is followed by the remark: “This contractual agreement must be entered into between GEBE NV and the resort.”

The letter of comfort also gives the Westin a 10-year tax holiday, that is to say: the Exco wrote that it “will endorse and support the request to the Minister of Finance to obtain a tax holiday for a period of ten years.”

Columbia Sussex also obtained a promise to exempt the resort of paying room tax, but again the language is ambiguous. “It is the intention of the Executive Council to review the Island Ordinance regulating room tax in such a manner that a waiver of room taxes can be granted for brand name resort developments for a period of no more than five years, providing that the collected revenues are invested in marketing of the resort, training programs for local staff, innovation and maintenance of the tourism infrastructure.”

The Exco added optimistically: “We see no reason, once this ordinance is finalized, why this particular resort development cannot come into consideration for this room tax incentive.”

While the executiv3e Council stressed that public access to the beaches must be available at all times, it also indicat3ed that is policy is “to allow resorts to use the beach and water area directly in front of their property for the placement of beach chairs, water sports activities and other amenities such as bars and food services. We therefore see no impediments to apply this policy to your resort.”

Another comforting thought: the Exco promised that there would be “no limitations on the amount of bars and retail outlets to be operated at the resort.” Limitations only apply to real estate management, the development company and the marina.

The Exco urged Columbia Sussex to approach local retailers and give them a chance to operate within the resort.

Columbia Sussex also obtained permission for a car rental license for 200 cars, and water rights for the water along its property boundaries.

The Exco even found a creative way to waive the building permit fee. ”This fee cannot be legally waived,” the letter reads. “The executive council however, considering the importance of this project, is prepared to allocate an amount equal to the fee towards marketing of the property.”

The Exco also promised to upgrade the road to the resort’s entrance and to write a letter of support to the Finance Minister (of the Netherlands Antilles) “requesting an exemption of the 3 percent turnover tax for all construction activity.”

The provisions the Executive Council put forth in the letter of comfort were valid for a period of two years.


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