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HomeNewsArchivesWHAT SHOULD WE PAY FOR A PATÉ?

WHAT SHOULD WE PAY FOR A PATÉ?

The Virgin Islands are in a major crisis. Many people are desperate and are seeking desperate "solutions". Desperate solutions are not the answer but only add to the problem. These islands have been seeking desperate solutions for years with nothing to show but more problems.
A payless payday and borrowing more money is not a solution, but instead adds to the problem.
The Prosser land deal is the ultimate problem…a scheme to benefit a few at the expense of everyone else.
Prosser does not want to pay taxes. What else is new, no one wants to pay taxes. To obtain his wish he is willing to pay for it…land, a baseball field, a drag strip, money payments etc.
The question is at what cost?
We all want a good chicken leg, pate and drink at carnival. But what are you willing to pay for it…$171?
Well that is the equivalent of what this deal will cost at a minimum. Actually $486 is a more likely cost.
The facts, according to the legislation, is that Prosser will give the V.I. 1,000 acres valued at $9 million and $4.5 million in cash to improve the property a total of $13.5 million. In exchange he receives 20 years of tax exemption which is conservatively valued at $400 million. That is one expensive plate of food.
The other goodies Prosser is offering (the baseball fields, library, community centers, drag strip and housing) will cost an additional $9.95 million. In exchange for the additional goodies, Prosser will receive an additional 10 years of tax exemption, which is conservatively valued at $1.5 billion.
The hotel, if built, will receive 30-year tax exemption in addition to the above items. If Hilton Hotels applied to build a hotel, The IDC could only give them a 15-year tax exemption.
As expensive as the legislation seems from the above numbers, the additional cost that one can not place a price tag on is the cost of the monopoly that is being created.
By granting Prosser's companies tax exempt he gains an immense competitive advantage over other businesses. He will then undercut other businesses reducing their income, possibly putting them out of business.
At best, sales are transferred from tax paying businesses to tax exempt businesses thus further reducing the Government's tax revenue. The worst case scenario is those tax paying businesses go out of business, further reducing government revenues and creating a monopoly. Prosser then, with no competition, raises rates and provides less service, negatively impacting each and every one of us. Communication is the foundation to business, without competition, the Virgin Island's communication industry will be below global standards and thus all business in the V.I. will be at a global disadvantage.
Editors' note: Michael Bornn is a partner in the investment firm, Seslia Securities. He is also the president of the V.I. America's Cup Foundation.

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