Insurance giant XL Capital is in talks about buying into the Belmont and Newstead hotel developments to help house its staff, The Royal Gazette has learned.

If the deal goes ahead, XL will lease condominiums or cottages to be built at the Belmont Hotel, which Bermudian businessman Kevin Petty is developing.

But as an exempted company barred from doing business on the Island, XL needs approval from the Ministry of Finance to invest in a project owned by a local company.

Mr. Petty's company, Belmont Hills Development, is rebuilding the closed Belmont Hotel and constructing housing on the site. And he is poised to take over the Newstead on Harbour Road, Paget, and dramatically expand the number of rooms.

The involvement of XL, which has confirmed it may become a minority shareholder in Belmont Hills Development, would give a huge shot of capital to the development.

Last year Labour and Home Affairs Minister Terry Lister said exempt company staff put a strain on the Island's housing, and they should consider teaming up with local developers to build accommodation.

XL said one reason for the possible involvement in the Belmont and Newstead project was because the company wanted to contribute to the Island's infrastructure.

The Royal Gazette revealed last week that Mr. Petty wants to scale back his plans to rebuild the Belmont from a 120 room hotel to one with 50 rooms, with 70 residential units.

But he also plans to expand the Newstead from 40 to 140 rooms.

The residential units at Belmont would include 40 condominiums and 30 two and three bedroom cottages.

Government has a formula where developers must provide a certain number of hotel rooms for every house they are allowed to build. The combined Belmont and Newstead project means the company has provided more rooms than necessary for the number of housing units it is building.

It is not known how many of the residential units would be reserved for XL staff if the company becomes involved in the project.

In a statement to The Royal Gazette, XL Capital said: “XL Capital can confirm that it has been approached by private developers to become a minority shareholder in the Belmont and Newstead property re-development projects.

“The investment, which is contingent on the receipt of relevant regulatory approvals, reflects XL's commitment to Bermuda.

“Bermuda is the location of XL's world headquarters and, as a responsible corporate citizen, XL believes it should consider contributing to the Island's infrastructure.”

Last December, Mr. Lister said: “As a group, international companies have got to sit down and consider how their staff coming to Bermuda are going to be housed.

“It may mean joint ventures with the private sector or the public sector. I don't have a problem with ventures with the private sector, collaborating with developers.

“It could be Bermuda Housing Corporation, it could be the private sector. I am not suggesting they have to go a certain way, but I am suggesting they have to look seriously at how we house we house the community.

“If Bermudians find themselves consistently squeezed from a housing perspective, you can create all the jobs you want, but (a Bermudian) may not be able to pay the rent.”

Mr. Petty said: “Having a partner like XL is a great asset and gives muscle to the overall project.

“It shows they have commitment to tourism, because this is a tourist project, and they are doing the right thing.”