Govt. offers $30m sweetener By Tim Greenfield A "watershed'' agreement which Government believes will accelerate the Island's largest hotel deal in decades has been announced.

Premier Jennifer Smith yesterday revealed that the agreement -- which includes a $30 million Government sweetener -- will lay the foundation for a $200 million, five-star resort at Castle Harbour to open in 2002.

The new Regent Hotel Bermuda will include timeshare properties, 200 luxury guest rooms, spa, shops, a conference centre, golf, new beach house and homes -- providing hundreds of jobs for Bermudians.

But the financing for the project is not yet in place, although Castle Harbour operators Bermuda Properties Ltd. reportedly believe the "Memorandum of Commitment'' will go a long way to getting the cash. Premier Smith said the $30 million guarantee was in addition to concessions on land tax, payroll tax, incentives on Bermudian entertainment, and duty-free drinks offered to the developers.

"We believe this agreement sets the standard for an entirely new environment for hotel investment and development in Bermuda,'' she said. "It also sends a signal that Bermuda is an investor-friendly jurisdiction to potential hotel developers.

"We are particularly delighted that such a prestigious and world renowned hotel group as Regent is planning its first resort island development in Bermuda.'' The Premier introduced the agreement at a Press conference attended by Tourism Minister David Allen, Development Minister Terry Lister, Works and Engineering Minister Alex Scott, and Peter Parker and Ed Trippe of Bermuda Properties L td.

She said the $30 million guarantee to the investors, the "Credit Security Account'', would be funded by land licence fees from the sale of homes, at Ship's Hill and Tucker's Point.

"This account will serve as security for the senior lender for the development, thus ensuring its completion,'' Ms Smith said. Mr. Lister said the fees would be fed into the security account as the residential units were sold -- adding there would be no "drawing down'' of funds if there were no reserves there.

"If there is nothing there, we are talking about a project that has completely failed,'' he said. "We believe it will be a quality project, we don't have that concern.'' But other hotels, who may be looking enviously at the incentive package offered to the developers, are likely to be disappointed.

Hotel deal Mr. Allen said: "We gave these kind of incentives for development in the broad national interest. This is a watershed development that almost by itself relaunches Bermuda tourism.

"If hotels have developments in the broad national economic interest, we are very happy to look at them.'' Mr. Trippe, president of Bermuda Properties, said they had signed a letter of intent with Regent International Hotels, for the company to have overall responsibility for the operation of the hotel.

He added that Government's assistance was a critical factor in arranging the financing for the project, which he hoped would be finalised in the near future.

Bermuda Properties investment partner, Donaldson, Lufkin and Jenrette, are said to be anxious to proceed with the project.

In addition to luxury hotel facilities, there is to be a "residential vacation club'', whereby visitors buy a home with upmarket hotel services but also lease back several weeks a year to hotel guests.

Teamwork: Premier Jennifer Smith, Ed Trippe and Peter Parker, both from Bermuda Properties at the Press conference Ambitious: An artist's impression of the proposed Castle Harbour resort