Hotelier John Jefferis said the lease he received for Coco Reef property from Government was no 'sweetheart' deal.

Mr. Jefferis is now moving ahead with plans to build 66 leaseback properties on the site. He said he will break ground within the year and said the financing was already in place.

Since renegotiating his lease for the hotel in 2003, which saw him gain more land and altered several other conditions, some have suggested, including UBP Senator Michael Dunkley, that Mr. Jefferis received a golden handshake from Government. But Mr. Jefferis said that was not the case and said his investment in the property illustrated that the deal was fair.

"I save the Government close to $1million a year," he said. "Before 2003 the hotel was operating at a loss of approximately $800,000, which the Government paid, so when you add that to the $200,000 rent I am paying it is saving the Government close to a million.

"Since then I have invested $10 million into the property because I love development. I have built the foyer which is bigger than this property needs because I am looking forward to what it will need when the villas are done.

"Nobody else would have spent as much as I did here, that is for sure, and I feel it looks really good. I like it when guests come in and they can see all the light and out onto the ocean. It makes me happy."

When asked what he thought about the perceptions he had received more because of his friendship with various members of Government he said: "It is frustrating at times. I know because of the nature of the Westminster system politicians have to attack, but if people have to attack I would prefer they attack me rather than the hotel."

Mr. Jefferis signed a lease in 2003 which more than doubled the length of the previous one from 21 years to 50 years. The new contract reduced the amount of rent to Government, added a 1.9 acre plot of oceanfront land and gave permission to build condominiums for sale.

A 2004 Auditor General's report recommended it should be re-tendered because it was "considerably more beneficial" to (Mr. Jefferis) than the tender document specified".

Last year Sen. Dunkley and Mr. Jefferis exchanged barbs with the Senator saying the lease was a golden handshake and Mr. Jefferis labelling him "idle", "idiotic" and "ignorant". But the two patched things up and Sen. Dunkley praised Mr. Jefferis for winning an international hotelier award in December.

Another issue that vexed some was the fact that the hotel did not have its own electricity meter and was still included on the Bermuda College's meter. That is still the case today according to Senator Walton Brown, who is the chairman of the board of governors for the college.

He told The Royal Gazette it would cost $750,000 to separate the two systems and they have decided to wait until construction begins on the new villas to start the process of separating the two units. Coco Reef pays a monthly fee to Bermuda College based on a formula agreed in 2003.

Mr. Jefferis added: "It is billed separately and paid each month."

As for the future of Coco Reef Mr. Jefferis said financing for construction of the 66 leaseback villas was in place. The company has issued stock to raise the approximately $90 million required to build the facility which will include pools, full butler service, a private beach and golf club membership.

As for when ground will break Mr. Jefferis said this year: "We are ironing out a few design details, when we build this it has to be perfect, we have to get everything just right. In particular we are working with engineers on the dome. We have to work out a way for it to withhold the pressure and survive a hurricane."

Over the last year several developers have said hotel developments are just around the corner, although to date ground has not broken on most of them.

When asked if his property was another example of this Mr. Jefferis said: "No, the money I have already invested into Coco Reef in the upgrades and in the plans, we are talking millions. That is not money you can just throw away.

"We already have our financing in place, we have a Special Development Order and we are working out some design issues right now."

And asked if he was confident he would be able to sell his units in the current economic climate Mr. Jefferis said he believed the economy would improve in the next two years. Currently there are still unsold fractional units at Tuckers Point, Newstead Belmont Hills and the Reefs, which all opened their fractional unit properties in 2008 and 2009 when the global economy was free falling.

"A lot of business has to do with luck and opportunity," he said. "It can be very important when you open a project. This project will take two years and the hope is that by then the market will have returned."

Mr. Jefferis' property will be lease back villas which means people will own the villa outright but be required to lease it back to the hotel for six months of the year for the first five years.

The owners will choose the months to lease back and will split any profits made from the leaseback with the hotel. He believes this will make his villas more attractive then some of the other options on the Island and proposed legislation allowing exempt companies to purchase hotel units will also be a help.