Observer Faces Closure

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MOF Real Estate Tax Division Closure NOTICE_LOC Building_McDonald St-1.jpg

In its history of frequent shut downs, none of which has occurred under this administration so far, the Daily Observer faces a new threat of closure.  

On Friday, March 28, just before close of business, Ministry of Finance personnel came to the LOC’s offices on the corner of Benson and McDonald streets and informed staff there that the Ministry was placing on the office building a warning notice giving the property owners 72 business hours to meet its real estate tax obligations or the building would be closed.  

That move, says the Observer management, is tantamount to the Daily Observer being put out of circulation because real estate taxes on the property leased by the Observer have not been paid by the administrators of the Nete-Sie Brownell intestate estate since 2006.

“If we are closed down, we lose business and advertisers’ confidence,” said Bai Best, an executive of the 33-year-old corporation. “The scores of newspaper vendors who depend on the Daily Observer among other newspapers they sell will also suffer a substantial reduction in their earnings.  Furthermore, government owes LOC a lot of money and it seems unfair for it to be closing us down over taxes for which we are not even responsible,” Best said.

The lease agreement signed in April 2005 between the LOC and the Nete-Sie Brownell family states that payment of the property’s real estate taxes is the responsibility of the Lessor. The LOC management says that it has paid its lease faithfully every year to the Administratrix, Madam Mary N. Brownell, with whom it has enjoyed excellent relations due to strong family ties.

“We had no idea the taxes on the property were in arrears for so long,” the LOC executive said.

The LOC management says that last November the taxation personnel of the Finance Ministry began to frequent the office and question them about the real estate tax payment.  The LOC told the tax collection agents that the Lessor was responsible according to the lease agreement.  Upon their demands, Observer referred them to Madam Brownell.  However the agents returned to LOC management and warned that if the taxes were not paid, the office building would be shut down.  At that point the management brought out a copy of the lease agreement to show the agents, but they were insistent that closure of the premises was imminent if the taxes were not paid by the due date according to the real estate tax code.

In the course of the ordeal, the LOC management was requested by Counsellor Alfred Brownell, nephew of the Administratrix, to provide him with a copy of the lease agreement which the company provided. The LOC says at that point, the management was under the impression that the family was taking care of the tax issue.  

A few weeks later, the lease payment was due, and Madam Brownell was contacted for an appointment to take the payment to her residence as is usually the case, says LOC. Madam Brownell told the LOC, however, that since we had begun talking to Alfred, the company should continue dealing directly with him.  

Half an hour after the conversation with Madam Brownell, a letter arrived at the LOC office from Counsellor Alfred Brownell of Green Advocates International, signing as the legal counsel and one of the administrators of the estate.  In his letter, Cllr. Brownell informed LOC that the Brownell family was “proposing an increment in the annual rent [from US$5,500] to US$15,000 per annum for the remaining two years optional period of the lease. 

Cllr. Brownell, however, said the proposal was not “cast in stone” and that the family was “flexible and open for a mutual dialogue to amicably and mutually agreed on the terms and conditions as agreed to under the April 20th, 2005 lease agreement…”    The letter concluded with a proposal that the parties meet for discussion at the home of Madam Brownell on Monday, March 24th.

The meeting took place as agreed with LOC, represented by its lawyer, Cllr. Rosemarie James of the International Group of Legal Advocates and Consultants. Cllr. Brownell and Madam Brownell represented their family. During the meeting, Cllr. Brownell insisted that it was legal for the lease amount to be increased in the middle of the optional period when the administrators had already received several payments based on the terms of the lease agreement. Cllr. James differed with Cllr. Brownell’s point of view, and the meeting ended with Cllr James stating that a response to the Brownell letter would follow.

During a telephone call on Monday, Cllr. Brownell said the Nete-Sie Brownell heirs could not negotiate with Finance Ministry until they receive LOC's response to the proposed increment in the lease payment. LOC’s legal counsel has since responded. 

Meanwhile the threat of closure by the Ministry of Finance still looms over the Daily Observer, with the 72-hour warning expiring today, Wednesday, April 2.  The LOC management thanks its many readers and advertisers for their patronage and support and asks for their patience in case the impending closure takes place.

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