Prime Minister confirms government guarantee for hotel developers as funds are raised for refurbishment – The Royal Gazette

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Artist’s impression of the aerial view of the Fairmont Southampton Beach ClubPhotograph provided

Financial guarantees will be given by the government to the promoters of the Fairmont Southampton after obtaining an investment of 190 million dollars for the project.

The Prime Minister remained vague on how much Gencom/Westend Properties would receive in guarantees from Bermudian taxpayers.

But David Burt has revealed the island’s biggest resort will receive an order as a designated gaming site, meaning it could have a casino.

Cabinet wrangling over the nature of the project’s guarantees sparked the shock resignation of Curtis Dickinson last month, the former finance minister confirmed to MPs yesterday.

The hotel’s closure in October 2020 was a blow to Bermuda’s economy, with the loss of over 750 jobs as the Covid-19 pandemic gripped the island.

The developers originally said work would begin this summer, with a planned reopening for the fall of next year.

New view: Artist’s impression of the Fairmont Southampton Duplex (Photograph provided)

The prime minister said earlier this month that a $50 million guarantee was agreed in principle in 2019 but has since expired.

Mr Dickinson told MPs the Prime Minister was wrong in his claim and said Mr Burt was adding to the confusion over the safeguards issue.

Answering questions from the OBA in the House yesterday, Mr Burt said a guarantee would happen, but no figures had been agreed.

Mr Burt would not reveal what “economic or financial support” had been requested by the hoteliers – saying he did not wish to publicly reveal the terms of the negotiation.

Earlier, the Prime Minister said that Bermudians would have the opportunity to invest in the hotel.

As part of the agreement signed between the government and the developers, some profits from the hotel will go into a Bermuda trust fund.

Contemporary design: Artist’s impression of the Fairmont Southampton King Room (photograph provided)

Mr Burt told MPs: ‘This agreement has been set out in a Heads of Terms document and I can further inform this honorable House that the document has been approved by Cabinet.

“I can also inform this honorable House that this agreement confirms the terms of the Government of Bermuda’s support for this vital project.

“I am extremely pleased to inform this honorable house and the public that this agreement provides for profit sharing of the operations of the hotel.

“The government is committed to donating the proceeds of this profit sharing to the Bermuda Trust Fund on behalf of the people of Bermuda.

“Although this is a time of hope, the agreement we have reached is the ‘end of the beginning’. There is more work to do.

Referring to a games order for the revamped station, Mr Burt said such an order was prepared in 2017 under the previous OBA administration, but “was not advanced”.

Cole Simons, the leader of the opposition, said the order was expected and supported by the OBA.

A spokesman for Westend Properties said yesterday: ‘Funding for the redevelopment of the Fairmont Southampton is in its final stages with the announcement of an agreement reached between the Government and Westend Properties.

“Westend Properties has secured reputable international lenders for the over $190 million redevelopment. Following the finalization of the agreement with the Government, the repositioning of the station can move into the development phase.

The company said it had also invested in “extensive planning and pre-development activities”.

Open plan: Artist’s impression of the proposed Fairmont Southampton Grille (photograph provided)

Karim Alibhai, Director of Gencom, the managing partner of Westend Properties, said: “We are grateful to all parties who have been instrumental in helping us reach this stage of the redevelopment, including the Prime Minister, whose efforts have been determinants.

“The plan for now is to start early this summer with the intention of reopening the resort by fall 2023.

Open Design: Artist’s impression of the proposed Fairmont Southampton Beach Club (photograph provided)

“It has not been an easy journey, however, against all odds, Gencom has continued to pursue this large-scale project.

“We believe that with the right investment, the Fairmont Southampton will return to its former glory, attract a steady stream of revenue for Bermuda and create over 800 direct employment opportunities, and many other related jobs.”

New Look: Artist’s impression of the proposed renovations to the Fairmont Southampton Jasmine Lounge (photograph provided)

Bermuda Industrial Union President Chris Furbert said: “Having been involved and fought for the reopening of this hotel for the past two years, because it is not only crucial for my members but also for the position of Bermuda as a top tourist destination.

“It is the largest non-governmental employer on the island, the hotel reconstruction phase will create hundreds of construction jobs, and when the hotel opens, Bermudians can take advantage of it to create their own careers. .

Great Hall: Artist’s impression of the Fairmont Southampton Ballroom Renovation Project (photograph provided)

“We believe that with the new collective agreement already in place, we can open a new chapter in industrial relations between the BIU and hotel management and work together to create jobs and careers for our members.”

Gencom plan timeline for the Fairmont Southampton

December 2019: Hotel purchased by Gencom, a Miami, Florida-based investment firm, with an 18-month major overhaul of the resort planned.

October 2020: Fairmont Southampton closes with the loss of over 750 jobs.

March 10, 2021: The government insists it has not committed to any financial guarantees for the project.

February 4, 2022: David Burt, the Prime Minister, signals that a deal with Gencom is imminent, telling MPs it could be done that day.

February 14, 2022: Curtis Dickinson steps down as finance minister days before the budget. A rift over overhaul guarantees between him and the prime minister is said to be a key reason for the departure.

February 15, 2022: Sir John Swan, the island’s longest-serving Prime Minister, tells The Royal Gazette that “everyone knows” that Mr Dickinson had reservations about the Fairmont Southampton deal. Sir John says Mr Burt has ‘a crisis on his hands’.

February 16, 2022: David Burt denies Mr Dickinson quit the Fairmont Southampton. He said, “I don’t believe that’s right to say.”

February 25, 2022: Mr Burt delivers the budget statement, but says little about the Fairmont Southampton project.

March 3, 2022: Mr Burt reveals that a $50m guarantee was agreed in 2019 but ran out – contradicting the government’s statement in March last year.

Mr. Burt says the total cost of renovating the hotel will be $376.2 million.

March 4, 2022: The Bermuda Industrial Union backs a $50 million government guarantee for the redevelopment of the hotel, the island’s largest resort.

March 25, 2022: The developers announce that they have secured funding for the project and expect work to take place in the summer with a reopening in the fall.

Wayne Caines, chairman of the Bermuda Tourism Authority, said the reopening of the resort would be a major boost to the island’s attractiveness to visitors.

He said: “With the return of our renowned conference resort, Bermuda will be able to reaffirm our claim as a premier leisure and group travel destination.

“More than just additional rooms in our inventory, the reopening of the Fairmont Southampton will increase our capacity for year-round group business and create consumer demand for our airline partners.

“Additionally, the redevelopment of the property will stimulate the economy through near-term construction and reintroduce hundreds of tourism jobs for 2023 and beyond.”

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