I get the distinct feeling that the non-replacement of HOTEL on the buildings indicates a view held by some that Coral Beach Hotel should become Coral Beach Private Members Club. I may be wrong of course, but for those Owners who might be considering there could be some benefit to such a move I quote from advice given to the Board on March 16, 2005 as written in the Minutes:
"The benefit to Coral Beach having hotel status is that all common areas can be classified as tax exempt. It is necessary to comply with the Hotel Licensing Board regulations, or the Board will revoke our license. It would then be mandatory to pay the bond fees back to the Government, and this pay back will date back to the beginning of the license. The license is granted to carry on a business to manage hotel rooms and other areas of the building such as restaurant, gym, store, office, beauty parlor. The License Fee of $280 is paid annually, and has been since February 1st, 1971, and approves premises for Coral Beach Hotel, Kenilworth Investments. It was questioned by the Board if the new parking lot would be covered under the bond? Mrs. Cornelius would look into that area, with the consideration of a parking lot, paving, lighting, fencing, etc for the benefit of hotel guests. This could be classified as Capital Improvements. Can we purchase the windows for the buildings under bonding? Ms Cornelius advised the Board 'yes'. She further stated that all maintenance, windows, lobby, repairing and replacing equipment to maintain the integrity of the building should be covered by the bonding license."
So, how much would it cost NOT to remain as Coral Beach Hotel?
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The duty tax saving is considerable given that the duty ranges from 35% to 65%.
As an example take the plumbing project of several years ago at about $900,000. We can approximate the tax saving by determining the labour and materials components. If labour was 60% then materials would be $260,000. The tax on materials is a minimum of 35%. Therefore the cost saving was approximately $91,000.
Owners should keep in mind that the "actual" losses of operating the Hotel have never been fully calculated as far as I know.
If we were to calculate the difference between operating the hotel, lost maintenance fees and the offset tax savings, it is entirely possible that over the years a net loss was sustained.
Happy Thanksgiving to the Canadian owners and best regards to non Canadians.
Ted Mulvihill
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