Plans to build 66 villas at Coco Reef Resorts in the New Year were greeted with optimism yesterday.

Premier Ewart Brown praised the development, a partnership between Coco Reef owner John Jefferis and Paul Bucha, US President Barack Obama's former campaign advisor.

"I am delighted that the Coco Reef development is proceeding," said Dr. Brown, also the Island's Tourism Minister. "This represents incredible confidence in Bermuda as a tourism destination and will certainly encourage other developers to see the obvious potential in Bermuda.

"Coco Reef will not only increase our capacity for visitors, but Bermuda also gains through employment, during construction and when the hotel is open for business."

The villas will be leased back to the hotel by owners for a minimum of six months of every year, for the first five years.

They form the first phase of the development, and are expected to cost $94 million to build and take two years to complete.

A six-storey hotel is planned for phase two. Work will begin once building permits are acquired.

Shadow Tourism Minister Michael Dunkley said the news was good but "during these tough times nothing is for sure until real progress occurs... breaking ground, construction and selling of units".

"This is just another reminder that tourism does not survive without the support of fractional or residential sales, which in turn free up beds during certain periods each year for sale to short-term visitors.

"It is also worthy of note that during this economic downturn fractional and residential sales are suffering and this is playing a part in the slow redevelopment of our tourism product as [many investors are] not willing to break ground with the current ample inventory of fractional units available."

Sen. Dunkley claimed Bermuda had seen "little in the way of improvement to the resort or to the hiring and training of Bermudians interested in the hotel industry" since Mr. Jefferis "was given a golden handshake of a deal by the Bermuda Government".

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

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

Sen. Dunkley added: "We look forward to supporting both these initiatives [improving the resort and training locals] in the future."