Government has pledged to ensure publicly paid consultants will stay at the Coco Reef Resort while visiting Bermuda on official business in its lease with the hotel.

This clause is meant to promote the hotel, which sits on public land, and boost profits 20 percent of revenue is supposed to be paid to the Bermuda College.

To date the hotel has run at a loss which means Government has only collected rent for the Paget property since 2008 a stipulated $200,000 per annum.

The Royal Gazette was given a copy of a letter sent to various Government departments from the general manager of Coco Reef.

In it he stated: "Our lease agreement with the board of governors for the Bermuda College (acting for and on behalf of the Government of Bermuda) states those Government consultants and others visiting Bermuda in connection with the Bermuda Government shall stay at Coco Reef Bermuda.

"We are committed to offering the travellers who your Ministry books with us the most competitive hotel rate and great value."

Owner John Jefferis confirmed that the letter had been circulated in a bid to drum up business.

"That is correct, Government consultants and others visiting Bermuda on Government business should stay at Coco Reef," he said. "Sadly, that has not been the case, we have not had many at all. That is why our general manager Lyle Pauls sent out the promotional letter."

Yesterday Bermuda College board chairman Senator Walton Brown said: "The relevant part of the lease reads as follows: 'The landlord agrees to use its best endeavours to ensure that all Bermuda Government consultants and others visiting Bermuda in connection with the Bermuda Government shall stay at the property from the first anniversary of the date hereof."

Sen. Brown said it was included because the Bermuda College is a quango and receives most of its funding from Government.

"When we are able to increase our revenue from other sources there will be reduced need to rely on public funding," he said. "Our agreement with Coco Reef calls for the College to receive 20 percent of gross profits; this is in addition to the $200,000 annual rent. We therefore have a vested interest in their economic success.

"We have received no revenue from profits as the hotel continues to suffer losses along with almost all other hotels on the Island."

The clause was included in the 2003 lease, which was not tabled in the House of Assembly or seen by the Bermuda College board before it was signed. It was also included in the renegotiated lease in 2009, which has also not been tabled in the House.

Bermuda Democratic Alliance leader Craig Cannonier described the clause as "shocking and very revealing".

"We know that there has been suspicion that Government had made a commitment of this nature, which was considered inappropriate and unfair to the other hotels on the Island, but to learn that the commitment may form part of the actual lease agreement is extraordinary," he said. "We must question what other outrageously favourable terms are contained in this lease.

"We in the Bermuda Democratic Alliance call for the Government to table before the House of Assembly the full lease with Coco Reef Bermuda. This is the people's property and they have a right to know what is going on with it. What we have been able to learn suggests that Mr. Jefferis seems to be greatly benefiting from the terms of the lease and the question we must ask is why?"

And Opposition MP Grant Gibbons, who represents the Paget West constituency where the hotel is located added: "I would have thought it only fair and equitable that IRC Sandys Ltd [9 Beaches] should have the same benefit, and of course Park Hyatt, if it opens — as all these entities effectively lease Government, public, property.

"It would be interesting to know whether this particular benefit was offered in the original public tender for the Stonington property in 2002/2003 — or whether it was added to the 2003 Coco Reef lease after the tender — as discussed in the Auditor General's 2004 Special Report."

The Royal Gazette was unable to contact the owners of 9 Beaches yesterday to ask if promoting the hotel was also a condition in their lease. On Friday it was revealed that the owners will be renegotiating the lease for the Sandys hotel as they prepare 9 Beaches for an $80 million redevelopment which will see it double its occupancy and move away from its eco-friendly theme. It is expected that the hotel's lease will also be extended.

Thus far the public have only been made aware of certain aspects of the Coco Reef lease:

• it was extended from 50 to 120 years;

• the college is no longer responsible for paying foreshore insurance;

l the college is no longer responsible for paying content insurance;

• a dispute resolution mechanism has also been put in place.

The UBP has submitted parliamentary questions on the lease, and asked for it to be tabled in the House of Assembly.

But last week Dr. Gibbons said Education Minister El James had refused to answer the questions because the Bermuda College was its own entity.