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Hotels to get tax break extension for building more hotel rooms if Moylan-Muna Barnes law enacted

The following is a news release from the Office of Sen. Jim Moylan:

This afternoon, the Committee on Economic Development held a Public Hearing on Bill 66-36, authored bySenator James Moylan andVice Speaker Tina Muna- Barnes. The measure proposes to extend the deadline of the “Special Qualifying Certificate; 1600 Hotel Rooms Development Program” by an additional 3 years.

This program was enacted in 2014 and proposed a Special Hotel Qualifying Certificate for investors who developed an additional 1,600 hotel rooms. Industry specialists, in coordination with the Guam Economic Development Authority (GEDA) realized at the time that with booming tourism numbers, along with future projections, that Guam’s hotel room inventory was short by 1,600 rooms. Hence the genesis of Public Law 32-233 to attract investors.

Unfortunately, with challenges in available manpower to develop new room inventory, only one entity was able to avail the benefits of the program, and hence Tsubaki Towers was constructed with 340 rooms. The program expires at the end of this year, and while Guam’s tourism numbers are a standstill, there is much optimism that pre-Covid arrival numbers may be a reality in the next 3-4 years. Thus, this period is ideal to prepare, and investors have shown some interest in either new developments or upgrading existing ones. Hence the reasons to extend the program.

Former Senator Dennis Rodriguez Jr., who authored P.L. 32-233, and former Governor Eddie Calvo, who enacted the measure in 2014, participated in the public hearing, and both shared the importance of the program, as well as their support for Bill 66-36. Supportive testimony was also provided by GEDA’s Administrator Melanie Mendiola and Catherine Castro, President of the Guam Chamber of Commerce, as they agreed with the economic opportunities the measure will bring.

GEDA made some recommendations for Bill 66-36, inclusive of extending the deadline for another 10 years and to include substantial renovations of existing hotels to the Special Hotel QualifyingCertificateProgram. These recommendations also seemed to have attained the support by those participating in the public hearing and will be considered for inclusion in the measure.

Bill 66-36 paves the way for much needed economic activity, which is critically needed now more than ever. There are ongoing discussions of investors seeking to develop new hotels in Guam, as well as existing hotel owners pursuing significant improvements, including their hotel room inventory. We are optimistic that tourism numbers will eventually return, thus we need to make sure programs to attract investors are in place.”, stated Senator Moylan.

"Before the pandemic, our tourism arrivals reached record levels, but it has been the hardest hit because of COVID-19. As our island moves along this road to recovery, we must do what we can now to save this industry and the nearly one-third private sector jobs associated with it. The fundamentals of our tourism industry are still strong, and Bill 66-36 will ensure we build back a better Guam.", stated Vice Speaker Muna-Barnes.

Senator Moylan and Vice Speaker Muna-Barnes look forward to working with their colleagues in advancing this bi-partisan measure, and to allow it to fulfill its objectives in supporting economic activity and recovery.

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