Government will receive approximately $100 million in rent over the next two centuries for leasing public land to two hotel developments

According to two documents tabled in the House of Assembly on Friday the leases of the proposed hotel developments at the former Club Med site and 9 Beaches site will span 262 years.

Premier Ewart Brown tabled the approximately $90 million lease for the Park Hyatt development on the former Club Med site in St. George's, it is being built by Bazarian Ltd.

And Minister of Works and Engineering Derrick Burgess tabled a 117-year lease extension of Daniel's Head in Sandys, where 9 Beaches currently stands. IRC Sandys Ltd., BPDL Precast Concrete and NORDICA LTD are building it.

He added that amendments to legislation would be made in the next parliamentary session to extend the lease to 262 years.

"The submission before this Honourable House at this time requests a lease extension of 117 years less three days, the maximum period allowed in accordance with current provisions of the Base Lands Development Act 1996 which has a 2127 end date," he said.

"From the outset, IRC Sandys Ltd. requested an extension of 262 years, a similar arrangement to that which is in place for the Park Hyatt development at the site of the former Club Med Hotel in St. George's.

"A 262-year lease at this time could not be contemplated in the absence of amending the Base Lands Development Act 1996.

"Honourable Members are hereby advised that it is the Government's intention to bring forward an amendment to the Base Lands Development Act 1996 whereby it will be possible to extend the 117 years less three days lease for a further 145 years for a total of 262 years."

The House passed the current lease extension unanimously on Friday.

Speaking yesterday David Dodwell, who heads IRC Sandys Ltd., said the company was grateful for the support from all sides of the House. He added that it was "full steam ahead" for the $80 million development of the property, which is expected to begin in October and will happen in four stages.

The company will pay Government $15 million for the 262-year lease in payments over eight years. It will also be required to pay three annual interest payments of $100,000.

Mr. Dodwell said he expected the full lease would be tabled once the amendment to the next session.

The Daniel's Head lease will be the second time Government have tabled the terms of the lease of public land to hotel developers in 2010.

The terms of the Park Hyatt lease were tabled last Friday. The detailed 192-page lease outlined that developer Carl Bazarian's company will pay approximately $90 million for the property in annual payments over the 262 years.

The lease was signed in 2008, and once demolition was completed of the former hotel property, the company was expected to pay approximately $200,000 for it within a year. The former Club Med hotel came down in August 2008, though it is not clear when the entire demolition process was complete.

The lease states that the company will be required to pay approximately $237,500 for the next five years for the property, which can be paid in quarterly installments. Thereafter it will have to pay $327,500 a year for the remaining 256 years of the lease, this can also be paid quarterly. The lease says the rent will be altered to account for changes in the consumer price index.

A one-off $5 million payment is also required on the day its hotel opens for business.

Current plans for the hotel, which must be built by 2013 according to a Bill passed in 2006, is expected to cost around $294 million.

It will include 100 hotel rooms, 80 rooms that condominium owners can lease to visitors, 30 fractional ownership units and a golf course. There will also be a sewage plant, desalination plant and staff housing.