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Defending Desarrollos

Past projects: Desarrollos has built at least three hotels for the Marriott Group, including the Ritz-Carlton in Aruba, above, with a second soon to break ground in Turks and Caicos

The St George’s Hotel Bill, which passed in the House of Assembly on Monday, paves the way for a new hotel to be built — a development the Old Towne and the people of Bermuda have been waiting to see happen for almost 30 years.

It is a project that promises to create hundreds of jobs and career opportunities for Bermudians for years to come, revive the East End economy and provide a shot in the arm for our tourism industry.

But if you listened to Opposition MPs during Monday’s debate, you would have not heard any of that.

Instead, you would have heard a shameless, political attack designed to sow doubt about the proposed development.

Opposition MPs started their remarks with the obligatory statements about supporting a hotel for St George’s before airing false and misleading information about the project.

It seems that each speaker had been given a line of attack against the project, no matter how wrong, outlandish or offensive it was.

One Opposition member was clearly tasked with sullying the developer, Desarrollos Hotelco Group. It was claimed Desarrollos was subject to criminal prosecution for participating in a Ponzi scheme — an entirely false allegation.

Despite several government MPs repeatedly standing on points of order and clarification to stop the member misleading the House, the member carried on repeating the false information.

An Opposition senator made similar spurious claims this year and claimed a principal of the Desarrollos Group had been imprisoned for participating in a Ponzi scheme. The senator later retracted and apologised for the statement, but only when threatened with a lawsuit.

The facts are that the Desarrollos Group was not involved in a Ponzi scheme. It received a $15 million loan from a Connecticut-based hedge fund that was to be used to complete a $300 million Ritz-Carlton being built in Aruba. We understand that once it was discovered the funds stemmed from fraudulent activity, they were returned. No criminal charges were ever filed against Desarrollos.

An even more ludicrous claim was made that because a similar corporate structure that was used for the project in Aruba would also be used for Bermuda, the likelihood of fraud was increased. By what logic does that follow?

The irresponsible maligning of the developer, driven by shallow political motives, threatens to undermine Bermuda’s working reputation. If the Island is seen as a difficult and unfriendly place to do business, developers will simply invest their hundreds of millions of dollars elsewhere.

Desarrollos has built at least three hotels for the Marriott Group. It has built a Ritz-Carlton in Aruba with a second soon to break ground in Turks and Caicos. These hotel companies would not engage any entity without conducting due diligence to make sure they were dealing with reliable and trustworthy people.

For the St George’s development, Desarrollos is investing $70 million of its own money, with Butterfield Bank providing $50 million.

To form a local company to move forward with the development, approval was required from the Bermuda Monetary Authority (BMA), which conducted thorough due diligence, including requiring beneficial owners to be identified. Butterfield Bank carried out similar due diligence as did the Ministry of Tourism Development and Transport for the request for proposal (RFP) process. No red flags were raised. All approvals were given.

As the Premier, Michael Dunkley, said during the debate on Monday, he recently met with one of the top executives of the Ritz Group in Toronto who said Bermuda was in “good hands” with Desarrollos.

To be clear, Desarrollos went through a rigorous RFP process, and has been vetted by the BMA, Butterfield Bank and the Bermuda Government.

It has a proven track record of developing hotels in the Latin American and Caribbean regions, is injecting substantial amounts of its own money into the project and is committed to hiring and training Bermudians. It has secured the luxury St Regis Hotel Group to run the resort and is committed to embracing and enhancing the Unesco World Heritage site of St George.

After 14 years of failing to get a hotel built, it seems the Opposition’s only option is to carry on with its campaign of misinformation, disinformation and criticism. That may be OK for our local politics, but when it attacks international developers who want to invest more than $100 million in a resort that will make a positive difference in people’s lives for generations to come, it is playing a dangerous, risky game with the future of Bermuda.

I call on Bermudians to support this important development that will lead to the first major hotel being built in Bermuda in many decades. The tourism minister and others who have been working diligently on this project for the past two years should be congratulated.

The new hotel in St George’s will be concrete proof that Bermuda is revitalising and reinvesting in our tourism product and, as a result, we will hopefully, once again, be a must-visit location for visitors from around the world.

• Glen Smith, a One Bermuda Alliance backbencher, is the MP for Devonshire North West (Constituency 14)