Project projected to provide $805 million economic stimulus
NASSAU, BAHAMAS – Disney’s Lighthouse Point project set for Eleuthera is forecasted to provide an $805 million stimulus to the Bahamian economy and $357 million increase in government revenue over the next 25 years, according to an economic study carried out on behalf of the developer.
According to the heads of agreement, tabled by Prime Minister Dr. Hubert Minnis in Parliament yesterday, Disney engaged Oxford Economics, a global leader in economic analyses, forecasts and consulting, to identify the economic impact of the project.
The government signed the HOA on March 7.
“The study employed a proprietary input-output model developed by Oxford Economics to complete the economic impact modelling,” the agreement notes.
“The analysis examined a 25-year timeline, including four years of development and construction, and capturing ongoing operations from 2023 to 2043.
“Over the next 25-year time horizon, the project is expected to provide an $805.1 million in increase in Bahamian GDP (growth domestic product) and a $357.5 million increase in Bahamian government revenues.”
The developer is expected to invest between $250 million and $400 million.
Failure on the developer’s part to invest a minimum of $250 million after five years of signing the agreement, will see its concessions granted reduced by a “relative percentage”, the agreement reads.
As was previously reported, Disney will ensure a minimum of 120 Bahamians will be employed during the construction phase, and has committed to aim for an overall 80:20 ratio of Bahamians to foreign workers during that phase.
Given the complexity of some of the construction works and the “need to ensure the highest levels of technical compliance with international standards”, Disney said it may be necessary to hire greater numbers of skilled non-Bahamians than the agreement provides.
An estimated 150 permanent jobs are expected to be created for Bahamians as a result of the project.
The government will lease the seabed to the developer for a term of 50 years, with rent charged annually at $1,000 per acre for the first 10 years.
A rent review shall be conducted by the government every 10 years.
The government has agreed to give the developer notice and calculations of any rent increase 60 days prior to the base rent increase.
The government has agreed to exempt Disney customs, excise and stamp duties on all construction plants, material, machinery and equipment, among other items imported and exported from The Bahamas.
The developer will be responsible for customs or stamp duties on consumable stores, except with respect to water, fuel and lubricants.
The government has also agreed to exempt Disney from real property tax for a period of 20 years after the date of acquisition of the property, and a possible further successive exemption of 10 years provided the property is well maintained and refurbished.
Disney will also be exempt from business license fees;
In the event, utility companies that provide electricity, telecommunications, cable services and water are unable to provide “dependable, reliable” services at “competitive commercials costs and terms”, the government has agreed that the developer may, subject to approval by relevant government agencies and appropriate regulator, establish and operate on the property “any of such utility infrastructure and system”
These include, but are not limited to, potable water, reverse osmosis or desalinization, garbage treatment or disposal, incineration, sanitary sewerage treatment, electricity, solar or other energy source, fuel transfer and storage.
The agreement notes that Disney has commitment to remain on its own power or be alternatively powered by the developer’s own land-based resources.
Clause 6.1 (iii) provides that the developer shall be exempt from “any tax, assessment or imposition upon or against any earnings or revenue derived from operations upon the project and its amenities and all additions thereto, or upon or against any dividends declared in respect of shares of the developer…” for a period of 20 years after the date the project opens for business.
The prime minister noted yesterday that the project will not begin until an environmental impact assessment has been completed to the satisfaction of the government.
According to the agreement, the developer will work with the government and Bahamian historians, artists and cultural experts to integrate “Bahamian voices and artistic expression in the design of the project, making its reflection of The Bahamas, rooted in local stories and traditions”.
The agreement also requires the developer to follow a high level of environmental and conservation stewardship and sensitivity that Disney, and its affiliates have brought to other Disney projects across the globe.
As part of the agreement, Disney will convey around 190 acres, of the 751 acres purchased from a private seller, to the government conservation and a national park.
Additionally, Disney will add three cruise ships, each with 4,000 passenger berths, to its fleet in 2021, 2022 and 2023 respectively.
Disney intends to increase the number of ships’ calls at the port of Nassau and Freeport by 30 to 40 per cent over the number of calls made last year, the agreement notes.
The project shall include the construction of the pier, berth and marina; construction and operation of a dining and beverage facility; spa facilities and aquatics and recreational facilities; beach expansion and enhancements; themed buildings and play area, as well as attractions; maintenance and utility plants; and employee dining, housing and recreation facilities.