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Bazarian seeking to amend East End resort lease

Developer Carl Bazarian has asked Government for changes to be made to the 262-year lease he signed several years ago to build a resort at the site of the old Club Med in St George’s,

The Royal Gazette can reveal.

This comes after it was claimed by UBP MPs Kim Swan and Charlie Swan that Mr Bazarian missed a deadline to start work on the proposed Park Hyatt resort, which was to open this year.

Kim Swan and the Chamber of Commerce East End division yesterday both expressed frustration that St George’s continues to suffer economically from what now clearly appears to be the “premature” and “short-sighted” closure of the St George’s Golf Course and demolition of its popular restaurant four years ago.

The Swans said a copy of the lease signed by Mr Bazarian, which was made available by Government in response to Parliamentary Questions, showed an agreement was made that construction should have begun by now.

In response to questions on the lease, Tourism Minister Wayne Furbert said in a statement to

The Royal Gazette: “The Ministry is working with Mr Bazarian on proposed amendments to the lease submitted by Mr Bazarian. Mr Bazarian is still fully committed to the project.”

Mr Furbert declined to say whether any construction deadline had been missed.

But MP Kim Swan showed us in the copy of the lease that references to the “construction period” mean “a period not exceeding forty-eight (48) months commencing from the date of completion of the demolition under Article 6 of the MDA (master development agreement)”. Demolition of the old Club Med occurred in August 2008.

“It is now 42 months since the property was imploded, and surely 12 months ago the property was in breach of this deadline,” Mr Swan said. “However, we were promised development would have commenced last year at the latest.”

Mr Swan accused Government of not being transparent on the matter since the MDA signed by Mr Bazarian was “conveniently” not included with the copy of the lease he was given.

Responding to Charlie Swan’s questions in the House last week, Deputy Premier Derrick Burgess had said Government was continuing to work with Mr Bazarian, but “building a hotel (and), getting money for a hotel, is not easy”.

It is understood from hotel sources that Mr Bazarian, expected on the Island this week, does not have in place sufficient financing for the project.

But it’s not clear why, given the many high-level announcements in the past about financing being firmly committed to the project despite the global economy.

Before stepping down as Premier, Dr Brown assured financing to build the Park Hyatt resort was in place, with the Bazarian group said to be investing money into the project; and saying it had also secured a loan from HSBC.

In August 2009, Mr Bazarian said he expected to sign an agreement with HSBC Bermuda for “long-term hotel project financing … in the area of $120 million”. He added once a “new” master agreement was signed with Government the design process should take at least one year to finalise though he may be able to “move dirt” at the site sooner.

No dirt has been moved there to date.

Even Park Hyatt, after signing on to manage the resort, had announced back in October 2010 that it was investing a “significant” amount into the $300 million development, in officially agreeing to become an “equity stakeholder” in the project.

When asked this week if the hotel corporation was or still planned to be an equity party, Hyatt senior vice-president for real estate development Patrick McCudden would only offer: “The planned Park Hyatt Bermuda is currently under design and is behind schedule. For further information, please contact Carl Bazarian, the project’s developer.”

Mr McCudden, who flew to Bermuda to make the investment announcement with former Premier Ewart Brown, declined to answer whether Hyatt was still or planned to be an equity partner.

Mr Bazarian, who was also in Bermuda for the announcement, had said he was “hoping to break ground in November 2011, but if planning comes through sooner we can begin sooner”. He said the project would take 24-30 months to complete.

Dr Brown had declared optimistically at that conference: “There were those who said it couldn’t be done; there were those who said it would never happen; there were those who said the future for tourism in St George’s was bleak. We are pleased to stand before you today with proof that those predictions and predictors of doom and gloom were absolutely, positively wrong!”

Kim Swan, who represents St George’s West, said he was increasingly concerned by not just the lack of a new hotel in the parish but by the continued closure of the golf course.

“The premature closure of the golf course has hurt the Town of St George’s and the St George’s Club resort financially, as the golf course was built to enhance the marketability of both hotel properties in St George’s,” Mr Swan said. “Its closure was short-sighted and helped to diminish the viability of the Town of St George’s whilst removing an important economic staple.”

Chamber of Commerce East End Division chairperson Cheryl Hayward-Chew concurred.

“The closure of the St George’s Golf Course and the subsequent destruction of the golf club had a significant economic impact on St George’s,” she said.

Mrs Hayward-Chew pointed out: “The golf course brought both locals and visitors into St George’s and enhanced the experience for visitors staying at the East End hotels.

“It was very difficult to understand why the golf club was demolished, remembering at that time the economy still appeared to be strong and rental space was scarce. Even if one accepted the argument that the golf course was operating at a deficit, the golf club also housed a successful restaurant with a solid local following that could have been allowed to continue.

“Four years later, it is no easier to understand and accept the demolition given the hotel development has still not commenced.”

Delayed project: Resort developer Carl Bazarian, pictured four-and-a-half years ago with former Premier Ewart Brown

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Published March 30, 2012 at 2:00 am (Updated March 30, 2012 at 8:59 am)

Bazarian seeking to amend East End resort lease

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