Tuesday, March 20, 2007

Downtown business owners less than impressed with Siniora relief

Downtown business owners less than impressed with Siniora relief proposal
Premier announces plan for tax breaks and subsidized interest payments

By Michael Bluhm, Daily Star

BEIRUT: Prime Minister Fouad Siniora proposed forgiving property taxes and municipal fees, as well as offering state-subsidized interest payments for new and existing loans, in an attempt on Monday to help businesses in the Beirut Central District (BCD), which have been severely damaged by an ongoing opposition protest. Downtown business leaders, who are preparing to sue the state for compensation for their losses, said they would decide on their next steps based on whether a political settlement is reached in connection with the Arab League summit on March 28-29 in Riyadh. Many entrepreneurs said Siniora's offer fell far short of their needs, which they described as immediate funding to cover loans, rents, salaries and utilities. The proposed tax exemptions for BCD firms would cover 2006 and 2007, and new loans would be financed from pledges procured at the Paris III donor conference in January. Siniora said the government would also request BCD property owners - meaning real-estate behemoth Solidere, for the most part - to forego rental income for the past four months. "The government wants to revive the economic activity in the Beirut Central District," Siniora told hundreds of BCD business owners and staff gathered at the Serail. "We are willing to urge the property owners to help the merchants." The measures, though, would have to be ratified by Parliament, which has not convened since the opposition demonstrations began December 1. Under the Constitution, a session was to have been held on Tuesday.

BCD merchants, however, say they will not wait indefinitely before taking action. A number of owners have finished consulting with attorneys on their compensation lawsuit and have only to complete necessary documentation before filing, said Aishti CEO Tony Salameh, who is leading the band of BCD business owners. Salameh, who gave the most positive reaction to Siniora's speech among the entrepreneurs, said he has already had to talk his colleagues out of a plan to remove the opposition's tents by force. "Everybody is feeling how badly we're affected," Salameh told The Daily Star on Monday. "I trust what [Siniora] said and the promises he made. I felt that he's really willing to do his best to help us. More than 100 companies operating in the BCD - over half of the glitzy Downtown's total - have shut their doors since December, and many of them have closed permanently, Salameh said. Several owners said they needed a fund of emergency grants just to stay afloat, and that tax exemptions added up to feeble relief compared to the losses incurred. "This is certainly not enough," said Michel Ferneini, co-owner of the La Posta chain. "For me, it's not really positive. Today, even if you wouldn't pay any single tax, it wouldn't be enough to save all those people Downtown. The solution is to have some aid. We are hostages of the politicians and it's not only Downtown - it's all Lebanon."

To bring domestic and foreign visitors back into the BCD, the Cabinet and business people have prepared a number of incentives. The government will propose repealing airport taxes and visa requirements for all foreign arrivals, while merchants and the Tourism Ministry will sponsor a children's festival this weekend and a Downtown fair on March 27, Salameh said.

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