ECONOMIC EMPOWERMENT ZONE – ACCELERATED THROUGH EXPANDED FINANCIAL SUPPORT

September 24, 2008
Statement by:

The Hon. Paula Cox JP, MP
Deputy Premier of Bermuda
Minister of Finance

Ladies and Gentlemen, I am pleased to have the opportunity today to speak to you and report on the progress being made with the establishment of the Economic Empowerment Zone in North East Hamilton. Just two short months ago, I was happy to announce the substantial strides made by the Bermuda Small Business Development Corporation with regard to the plans to revitalize and support development of this first ever EEZ when I reported Cabinet’s approval of the North-East Hamilton Land Use Plan to be known as the North East Hamilton EEZ Local Plan and the establishment of an Economic Empowerment Agency.

There have been many steps taken to date to bring the Economic Empowerment Zone initiative to reality and to the point where BSBDC are now only days away from opening a small satellite office right here in the EEZ to serve the existing and aspiring entrepreneurs along with all those community organizations and stakeholders seeking to improve life in North Hamilton.
Firstly, I would like to thank those who have journeyed with us to first ensure that such a zone could be established. Early 2006, the Bermuda Small Business Development Corporation held discussions with the Human Rights Commission (HRC) as to whether business and property owners in the EEZ could be ruled eligible to receive preferential treatment in accordance with section 6A of the Human Rights Act. The HRC gave its consent that business and property owners of the EEZ could be regarded as being members of a special program under the Human Rights Act. This HRC consent opened the door for preferential borrowing rates from lending institutions, tax incentives and other forms of development incentives for residents of the EEZ.

Through increased funding in Budget 2006, Bermuda Small Business Development Corporation’s budget was increased in recognition that access to funding and financing and the support services required to enable such access is critically important. We were also pleased that with the support of both of the two larger banks, Butterfield Bank and Bank of Bermuda/HSBC, Bermuda Small Business Corporation’s Guarantee capacity was increased as well as through the subsequently passed amendments to the Corporation’s Act, the maximum guarantee amount was increased. Also during 2006, Bermuda Small Business Development Corporation in collaboration with the Uptown Market Association – a grassroots group made up of property and business managers of the area with data collected from vision groups comprised of persons living and working in the EEZ established and defined nine key areas which provide the direction of the strategic actions required to realise empowerment for the Zone and its constituents. Going forward into the 2007 Budget Session, I as Minister of Finance was pleased to initiate and implement Payroll Tax incentives to new start-up businesses that register with Bermuda Small Business and locate in the Economic Empowerment Zone.
During the 2007/08 Budget year the Uptown Market Association (UMA) and a second community organization, Youth on the Move (YOM) were provided $250,000 each to assist in their plans to bolster and reenergize the Zone.

The next steps taken was when Government presented a Resolution which Parliament then approved and declared the Economic Empowerment Zone in North Hamilton as an “approved scheme” under the Industrial Development Act and other concessions available under the Act including deferral of Customs duty for periods up to five years, long leases on certain forms of property development. I should also add that other concessions may include the use of a Customs Duty Remission Order to provide a zero rate of duty for a particular project that is unique in nature. During this present Budget year, BSBDC also has been provided with $200,000 funding to assist both existing and new entrepreneurs located in the EEZ with grants and no-interest loans in the maximum of amount of $10,000 each, which have already assisted businesses with small capital expenditure funding, professional management, marketing, business planning and accounting services and working capital financing.

As I have previously stated, the implementation of the North-East Hamilton Land Use Plan drafted in consultation and collaboration with the community by the distinguished group of Design professionals known as the Design Roundtable will see the area undergo a renaissance. This Plan outlines a number of fresh and innovative initiatives which will transform the EEZ into an aesthetically pleasing environment, while taking into account the need to balance the area’s cultural and historical architectural attributes. The plan has been heralded as an innovative and creative solution which capitalises upon the existing micro-neighbourhood structure of North East Hamilton and creates 13 distinct districts. With this Plan and the guidelines and the accompanying regulations presently being drafted both commercial and residential property and business owners will be incentivised and encouraged to develop, refurbish and renovate their properties enabling the North East Hamilton EEZ to sparkle and be a beacon for not only economic activity but also healthy community life.

Ladies and gentlemen, this revitalization requires support and I am pleased to stand here with Butterfield Bank, CEO – Mr. Alan Thompson to announce that in keeping with the public / private partnering which has been the hallmark of this initiative there will be further special below market and flexible financing criteria for not only business property owners but residential property owners as well.

We are pleased to see the EEZ becoming a reality and the Government commits to continue to work with all of the stakeholders, residents, entrepreneurs, property owners, the Corporation of Hamilton, BELCO and the banks to ensure that the goal of Government’s commitment to achieve new wealth creation and expansion for the people. Today, we appreciate and applaud Butterfield Bank for joining us to expand the financing alternatives which will serve to accelerate the success of the EEZ. I now invite Mr. Thompson to share with you the particulars of Butterfield Bank’s plans to assist. Thank You.