Mr. Speaker and Honourable Members,
Later today, I will be laying before this Honourable House the Economic Development (Designation of Economic Empowerment Zone) (SEH) Order 2023, essentially the order creating the new Southeast Hamilton Economic Empowerment Zone.
Mr. Speaker, I am extremely pleased to be here today to announce significant areas of progress with the strong partnership between the Ministry of Economy and Labour; the Bermuda Economic Development Corporation; and our key stakeholders for the Economic Empowerment Zone initiative.
The Bermuda Economic Development Corporation has made substantial strides to date in creating the productive partnerships in both the public and private sectors to establish the three existing Economic Empowerment Zones and anticipates doing the same with the new proposed fourth EEZ.
The first EEZ was established in Northeast Hamilton in June 2007. Two additional EEZ’s, in Somerset and St. George’s, were established in March 2011. The initiative continues to meet the Government’s goals of empowering businesses and residents in these designated areas.
Mr. Speaker, the PLP’s 2020 Election Platform had a goal to transform the City of Hamilton into a liveable city by fostering the development of residential and mix-used developments not just in the City, but across the EEZs.
Mr. Speaker, today I am pleased to share with the members of this Honourable House another milestone in the Government’s empowerment remit as well as bringing the Economic Recovery Plan projects to fruition. The Order before the House today seeks to establish a new economic empowerment zone in Southeast Hamilton under section 2A of the Economic Development Act 1968.
Southeast Hamilton has an important role as the Gateway to the City, providing key commuter routes into and out of Hamilton. All commuters that reside in western Bermuda, along with many from eastern Bermuda, pass through Southeast Hamilton to enter and exit the City. Additionally, it plays a key role in the economy of Bermuda as it hosts the container docks. However, the full economic and development potential of eastern Hamilton, both north and south, has not yet been fully realised compared to the central and western areas of the City. Designation as an EEZ provides access to economic development tools to reach this potential.
Mr. Speaker, respondents to a survey conducted by the Bermuda Economic Development Corporation were in strong agreement that there should be more economic investment in the area, citing such reasons as the need for investing in building refurbishment, under development, and the need for support of the many small businesses in the area, as well as the need to encourage more entrepreneurship in the area.
The research also concluded that there is a need for increased investment opportunities in the area. Improvements and capital investments would not only increase business success and employment opportunities, but prospects for residential development in a mixed-use environment would increase the customer base within the proposed zone.
Mr. Speaker, the area of land outlined in red on the respective map contained in the Schedule to this Order is proposed to be designated as an economic empowerment zone. The area recommended for EEZ designation comprises approximately six city blocks, plus the cargo docks. The zone is almost entirely within the limits of the City of Hamilton, bounded on the west by Court Street, the north by Victoria Street, and the south by the Hamilton Harbour shoreline. The eastern boundary runs approximately along the eastern City boundary, to include some adjacent properties. Ultimately, the total area of the proposed zone is approximately 41 acres, with 33 acres of developable land.
Designation as an EEZ allows immediate access to a variety of incentives and products for qualifying business, property owners, developers, and investors that meet the criteria and show need for support. Specific EEZ incentives currently available are as follows:
(i) BEDC EEZ Payroll Tax Concession – BEDC approves up to 9 tax periods (2 ½ years) of tax concessions for new startups commencing in an EEZ or an existing business relocating to an EEZ;
(ii) BEDC EEZ Customs Duty Deferment – BEDC approves up to 5 years of duty deferment on capital projects or capital improvements within the EEZs, both for businesses and property owners;
(iii) Reduced land tax – currently properties located within in the EEZs have a reduced land tax rate issued by the Office of Tax Commissioner compared to properties outside the EEZs;
(iv) Reduced application fees on products – BEDC has reduced application fees on products for applications located within the EEZs compared to applications for businesses outside the EEZs;
(v) Preferential interest rates on funding – BEDC has reduced interest rates on micro loans within the EEZs compared to applications for businesses outside the EEZs and the Corporation negotiates with the banks and financial institutions to offer EEZ preferential interest rates; and
(vi) Approved Residential Schemes – Designation as such facilitates foreign direct investment for residential and mixed-use development projects within the EEZs.
The Corporation is actively working on additional EEZ business development and economic development products and tools with local banks and this Government aimed at facilitating further economic activity.
Doing business in and with an EEZ also brings the added benefits of dedicated BEDC business development officers to work specifically with businesses in each zone on business expansion and retention. In addition, dedicated economic development offices can be seen with BEDC’s Uptown Development Authority, whose sole role is to connect EEZ property owners, investors, and developers together to continually regenerate opportunities in these zones. It is important to strike a balance between business development and economic development as both are interlinked to successful and sustained economic activity.
In closing, Mr. Speaker, as evidenced, this Government is committed to facilitating a viable, reputable business environment, as well as the development and economic regeneration of our Economic Empowerment Zones. Evidence has shown that the eastern part of the City, both north and south, when compared with the rest of Hamilton, needs additional attention and investment, and provides untapped opportunities for growth and development. We know we will have to strike the balance between facilitating investment and curtailing displacement and have full confidence that the BEDC and Uptown Development Authority teams can achieve this with support from this Government.
To this end, the Ministry of Economy and Labour will continue to make economic empowerment an imperative, by creating sound, progressive policies which support investment, regeneration, and growth aligned with our Economic Development Strategy. The creation of the South East Hamiton Economic Empowerment Zone through tabling today’s order and bringing this new zone into existence is a tangible example of this commitment and opens the door for new and exciting business and economic development possibilities.
Thank you, Mr Speaker.