Special qualifying certificate sought for hotels
Less than five months after a qualifying certificate was approved for a new hospital, it appears another request is before the Guam Economic Development Authority - but this time for a special QC for hotels. Ever since legislation was signed into public law late last year creating a special hotel qualifying certificate, the interests have come pouring in.
"The applicant is requesting full benefits under Public Law 32-233 for special hotel QC," said Tina Garcia. "The benefits are listed as a portion of business privilege tax, income tax, real property tax and used tax exemption."
And on Thursday, the first official application for the special hotel QC went before the GEDA board by Polaris Lakeshore Global Investment, (doing business as Ladera Towers). Garcia, GEDA's business development manager, said, "The company will be investing approximately $134.7 million to reconstruct and operate the Ladera Towers in Mangilao, Guam. The new condo hotel will feature a total 218 units."
Along with an improved lobby, kitchen and banquet hall and new restaurants and shops, Ladera anticipates having up to 415 employees with an annual gross payroll of about $10.8 million. Public Law 32-233 is aimed at encouraging the development of 1,600 new hotel rooms by the year 2020 as part of the Guam Visitors Bureau's Vision 2020 plan. Garcia says the project meets those objectives and as a condo-hotel room, it will attract a higher average spending on the rooms. After some review, GEDA's in-house credit review committee recommended to approve the QC application.
"And as stated in the law they will receive a 10% tax rebate of their total construction cost, and that will be applied to the menu of taxes available of income tax, business privilege tax, real property and used tax," she said.
Part of the law would also require a public contribution with GEDA. Scott Clark spoke on behalf of the company, and said, "The typical hotel room would be 35-square meters and you put two maybe three people in there, so for our units, they're 140 square meters and given the size. And going back to the optionality, we'll have twice that many people in there."
The per-unit cost is higher compared to other hotel rooms as Ladera features three- and four-bedroom condo units. And while it doesn't do hotel business at the moment, Clark says the company is going in a completely different direction, hence the QC application. Several board members like chairman EJ Calvo however questioned the figures of the project. "Right now it seems like it's very early, the numbers are bold, and maybe you're going to do something we've never seen, but I think more the presentation needs to be upgraded a little bit, with more information and more detail to be able to build that confidence and that's my two sense and I just want to put that on the table," he said.
The board tabled any decision until their meeting next month.