Government moved to clarify that it will be purchasing low-cost housing units at the Grand Atlantic Development site.

Housing Minister David Burch said Government will spend $40 million to purchase 78 units in Warwick, but would be "immediately" selling them on to clients of the Bermuda Housing Corporation. He added that it was part of the Progressive Labour Party's pledge to provide affordable housing for Bermudians.

In June Government announced construction on a 125-unit affordable housing complex on prime South Shore property would begin by the end of July. It will take more than two years to build all of the units but builder Gilbert Lopes predicted the first 21 would be available within 11 months.

At the initial press conference Minister Burch said Government was not making a cash injection into the project. Developer Larry Swenson added Government was not purchasing any property from his company and that Bermuda Housing Corporation clients would be purchasing the homes once they are completed.

But Opposition members said they were unclear on the cost of the project and Government's role in it.

On Friday Minister Burch sent out a statement to clarify the relationship between the private developers and Government. He said the Grand Atlantic project was a "Loughlands — style" development, where the developer takes on the full responsibility for the project, which includes the housing and the hotel.

A press release from the Minister stated: "As such, the Government will purchase blocks of housing, once the developer has met prescribed obligations, and then immediately sell them to clients of the BHC.

"The BHC has agreed to purchase 78 of the affordable housing units (in three phases). The cost totals around $40.6 million.

"As a note, no funds will be paid to the developer until the units have been built and occupancy certificates have been obtained.

"The BHC has an option to purchase the remaining 47 units under the same terms."

The clarification differed from what was announced in 2009. Last year the Premier said Government would be "simply buying the land" from the hotel for housing and that the developer "needs capital" while the Government "needs land to build affordable housing". At the time real estate experts estimated it would cost $25 million to purchase the plot.

Last week's press release also noted that Government would not be investing any funds in to the hotel portion of the development, which Mr. Swenson said would begin by the end of the year.