While the Urban Development Corporation (UDC) is advertising a very large slate of projects — including many targeted at urban renewal with incentives as a drawing card — local companies are still waiting for the green light so they can make use of the benefits.
New UDC General manager Dr Damian Graham, speaking at the recent Investments and Capital Markets Conference put on by the Jamaica Stock Exchange, said the state development agency is seeking investors with the financial resources, development experience and management expertise for billions in assets which it owns and some of which it intends to sell outright.
Major projects exist in downtown Kingston; Runaway Bay, St Ann; Montego Bay; and Portmore, St Catherine, for which partners are being sought.
On offer by the development agency are a range of incentives which are intended to improve returns for investors. Among them are an investment tax credit of 33.3 per cent on capital sums invested, tax-free rental income, exemption from transfer tax and stamp duty, and tax-free urban renewal bonds.
The benefits were suspended towards the second half of the previous International Monetary Fund programme as the government sought to cut revenue losses in line with tight fiscal objectives.
However, the UDC is now building its hopes of viable public/private partnerships (PPP) on the tax benefits as a drawing card.
Three years ago GraceKennedy (GK) purchased lands from the UDC in downtown Kingston with an eye on such incentives. Projects include the new GK headquarters — to be completed at a cost of around US$25 million and slated for completion in 2017.
On Thursday, group CEO of GraceKennedy Ltd Don Wehby said the company was in the process of formally applying to the UDC, following other approaches made more than a year ago.
Having made large investment outlays, Wehby is keeping his fingers crossed that the incentives will be approved.
The headquarters is being constructed on a 48,000-square-foot plot of land acquired from the UDC and will house GK business units with space for rental for offices and retail entities. The plan is centred on land located in a zone identified as suffering from urban blight.
GK was previously successful with its application for GK Foods & Services Ltd, which benefited from the tax incentives available under the Urban Renewal Act in 2009 when they constructed their distribution centre at Salt Pond Road in Spanish Town. Now Wehby hopes that the company’s downtown project will be equally successful.
Wehby told the Jamaica Observer, “This forms an integral part of the justification to develop our new headquarters downtown. We also plan in the future to do further development and the Urban Renewal (Tax Relief) act will be critical for us to justify the investment from a financial rate of return.”
Dr Graham, UDC head, indicated that most of its PPP projects were located in downtown Kingston, and soon new bids will be invited for them from private sector developers. Included among them is a five-tower 8-storey mixed-use complex comprising condominium apartments, commercial space on the street level, 114 parking spaces, with a gross area of approximately 189,000 sq ft.
Source:http://www.jamaicaobserver.com/business/UDC-refloats-incentives-for-urban-renewal-projects_89054
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