The Senate’s decision
There is no doubt that the decision on the Tucker's Point Special Development Order is difficult. It is a classic public interest debate in which the community's different needs have to be weighed before a decision is made.
The arguments in favour of the SDO largely fall on how it might help the resort and tourism generally survive, with the saving of jobs and the importance of having a top class resort, which Tucker's Point is, and functioning in Bermuda as added factors. There is the added question of what effect a foreclosure or putting Tucker's Point into receivership might have on the industry and on Bermuda's reputation.
These are valid arguments. Like it or not, Tucker's Point is a beautiful property that is important to tourism and the economy. If it gets through its current problems, it could lead the industry for years to come. Against that, opponents of the SDO have arguments which carry weight as well. This is not the first SDO that Tucker's Point has received, and the arguments in favour of this one are not very different. This begs the question of where this slippery slope might end. The second issue concerns the very real loss of important open spaces for Bermuda as a whole. Once developed, they are gone forever. This should not be taken lightly. Vast swathes of one of Bermuda's last major open spaces will be lost if the development goes ahead as presently constituted.
The third is a business argument. Tucker's Point has not opened its books to the public, although reporting by this newspaper does show its financial position is very poor. There is no certainty that if the SDO is granted and the real estate is developed and sold, that the resort will be any more viable than it is now. It will have either reduced its debt, or increased its collateral in terms of its assets, but if the hotel continues to lose money, and the economy does not improve, Bermuda may be facing these same questions in five years when Tucker's Point is back at the table asking for more zoning changes so it can sell more land.
To be sure, Tucker's Point has been unlucky. It completed its hotel just as the Great Recession struck. And sales of fractional units, a critical part of the resort's business model, dried up as a result. But the resort is not blameless. It was expensive to build at more than $250 million and its opening was delayed. It has had a number of management changes. It has not marketed itself as well as hotels that are parts of chains have.
Governments should not get into the business of saving private companies from their own mistakes unless the public interest is at stake, as with Butterfield Bank. In that case, a collapse would gave devastated the whole economy. The closure of Tucker's Point, although tragic, would not have the same effect. Now that the hotel has the weight of a strong chain Rosewood behind it, it should be marketed more effectively. But even then, the public has the right to feel aggrieved that it has only now come out that a condition of Rosewood coming onboard was approval of the SDO. Another surprise was the news that Mid-Ocean Club has a covenant over some of the land in the proposed development. Reportedly, this is some of the best building land available. If, as seems likely, Mid-Ocean refuses to allow it to be developed, then it will change the nature of the SDO. This is information the public deserved to have.
The SDO now goes to the Senate for approval, and even if it is rejected there, it is likely the Environment Minister could still approve it. Even so, the Independent Senators have a heavy responsibility in this. One of their primary function is to act as a check, or restraint, when the Government tries to move too fast. It would seem to be wise for the public to know more about how Tucker's Point plans to extricate itself from its problems before approving the SDO. There are still too many questions.