Hotel renovations proposed to be listed under tax relief program
By Pacific Island Times News Staff
Sen. James Moylan has introduced a bill to amend the Special Qualifying Certificate Program for hotel room development to include renovations as part of the incentive tool.
The measure is co-sponsored by Vice Speaker Tina Rose Muna-Barnes, and Sens. Joe San Agustin, Chris Duenas, and Tony Ada.
The genesis of the legislation is a result of advancements made with Bill 66-36, sponsored by Moylan and Muna-Barnes, which is currently in discussions during the 36th Guam Legislature’s December session.
Bill 66-36 proposes to extend the sunset provision of the special qualifying certificate for hotel room development, as the objective of that program was to increase Guam’s hotel room’s inventory by an additional 1,600 rooms. Unfortunately, due to many uncontrollable factors over the years, only one entity was able to successfully build nearly 400 hotel rooms.
However, during the various discussions on Bill 66-36 over the months, stakeholders within both the public and private sectors recommended an enhancement of the incentive program to include hotel renovations which made substantial improvements towards the property.
While the measure was initially substituted within the committee to include the insertions, and a second public hearing held, due to technicalities, language pertaining to renovations had to be removed, and hence the introduction of a new bill.
“This new measure, just like Bill 66-36, promotes much-needed economic activity. A recent economic forum confirmed the importance of the construction industry as a pillar of Guam’s economy. However, with the many uncontrollable challenges outside the fence, to truly allow the opportunities for investors to have the confidence to build new hotels, or spend millions in renovating existing ones, effective incentive tools must be provided," Moylan said.
“Zero tax dollars emerge if zero investments are being made in the hotel construction industry. However, if Bill 66-36 or this new measure establishes new construction, this means new jobs, additional spending at local establishments, contracting opportunities, and a positive impact with our tax base. This is just at the construction phase, imagine when the new or renovated hotel is operating," he added.
While the Covid-19 pandemic continues to impact our present visitor arrival numbers, industry experts have expressed that this is the ideal opportunity for investors to improve the product and increase the hotel room inventory, as arrival numbers have the potential of reaching or exceeding pre-pandemic arrival figures in a few years. The measure also serves as an ideal tool to address the issues with derelict buildings.
“Now more than ever we need to prioritize measures which would path us towards job creation and economic recovery. Measures such as Bill 66-36 and this new measure help achieve these objectives," Moylan said.