Sir John Swan believes that foreigners should be allowed to purchase apartments in the new Atlantis building currently under construction on Parliament Street.

Sir John and President of the development company, Challenger Banks Ltd. Leon Simmons spoke with The Royal Gazette yesterday about the project and the challenges they faced in financing the City's first residential development in more than100 years.

Sir John said that the company did not call on Government for financial help but pointed out that most of the projects being done on condominiums today are being done under the Hotels Concessions Act.

When asked if Government had been supportive of the project, Sir John said:"Well we're waiting to see because we are applying to get licenses to be able to sell to non-Bermudians."

Sir John said: "It would be good if we did allow foreigners to own these apartments. We can't keep telling people that we need them here and our economy depends on it, but they are not welcome. It is fundamentally wrong. It is just another way of insulting them."

And Sir John said that by making the apartments available to foreign purchasers, the countryside would be left open for Bermudians and residents to enjoy and raise their families.

Sir John also explained how the building was financed and said that Mr. Simmons led the financial charge creating an innovative scheme that brought together a conglomerate of investors as a multi-housing project of this size had never been attempted before.

Sir John said that due to the nature of the project, there were constraints within institutions to be able to get the required capital, and so other institutions were required to join in and they were fortunate that the parties they approached supported the project and made funds available.

Mr. Simmons said: "Given a project of this size, lending institutions are usually looking to spread the risk to some extent, and that is what gets us to this syndicated loan."

Mr. Simmons said the Bank of Bermuda arranged the loan and there were five principle entities involved in the loan including Challenger Banks Ltd.

He said: "Ocean Winds Ltd. (the company formed to buy the land) was the borrower, the Bank of Bermuda was the arranger, and in their capacity as the arranger, they were acting on behalf of the lenders BF&M and Gibbons Company Ltd."

He explained that the Bank of Bermuda now acted as an agent to act on behalf of the lenders, and they will have an ongoing responsibility as the agent for the lenders.

Mr. Simmons said: "Ultimately what they (the lenders) are all concerned about is the security, and the Bank of Bermuda acts as the security trustee. So you end up essentially with five principal parties with the bank of Bermuda acting as the administrator.

Mr Simmons said it took approximately a year to get the financing in place and added: "The advantage of a syndicated loan is that you only have the one document, instead of having loan agreements with all three loaners."

Sir John said they had worked with the architects and listing agents prior to proceeding with the project as they had to be satisfied that there was a market which determined the viability of the project.

He said research was conducted and models built so that the public and the investors would understand what they were doing and what the finished product would look like.

When asked if he knew about the City of Hamilton's latest plan released this year which included a plan to reintroduce the residential aspect to the city, Sir John said: "That came out the same day we put the models on display."

He said they knew nothing of the plan at the time, but that their project conformed very much with the new plan.

He said: "The models were launched the very same evening at the same location as the City Plan's launch."

And he said the Corporation of Hamilton had given them their full support as they saw the future prospects of Hamilton as a living viable community in terms of the various restaurants and entertainment.

When asked if he would consider undertaking a similar project Sir John said: "We are not adverse to doing them, but it requires a lot of work, a lot of financing, and a lot of cooperation, but my position is that therein lies the future of Bermuda."

Sir John would not be drawn into giving a price for the new units saying: "We are not putting a price on yet, as the foundations are being put in and we don't know what we are going to find down there."

He said the contracts had been written but there was a provision for variation in contract only, because they had a 'turn-key contract,' a contract that when the building was turned over it would be clean and ready for occupancy.

"So the unanswered question now is, as we create the foundation, is there something that is unforeseen? If there isn't then we will be in a position to name the price, but that could take a while," said Sir John.

He added: "This doesn't mean that the price will go any higher as the price is dictated by the market, not by what you paid for something or what you think you should get for something. It is dictated by what people will pay for it."