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Blakey privileges included ‘rent-free’ Moresby House

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Less than flattering view of competence and accountability: David Burt, the Premier (Photograph by Akil Simmons)

American music promoter Anthony Blakey was allowed an “initial rent-free period” in a government-owned property at Dockyard after he proposed setting up a recording studio there.Andrew Dias, the general manager of the West End Development Corporation, told The Royal Gazette that Savvy Entertainment, owned by Mr Blakey, was given the rent reprieve at historic Moresby House to “assist the business during the start-up phase”.Mr Dias said: “At the end of the rent-free period, Wedco was to receive a minimum rent and also included a standard per-cent rent clause. “The minimum rent was not paid per the lease agreement, so Wedco immediately gave notice to vacate. The property was returned to Wedco’s control, where today it remains unrented.”The news comes after David Burt, the Premier, apologised yesterday for overseeing a $800,000 government loan to Mr Blakey and Danilee Trott, a Bermudian event planner who worked for Savvy, which was not paid back. But he emphasised that civil servants authorised the release of the taxpayer funds after they had carried out background checks.“Government ministers cannot release monies from government accounts,” he wrote in a statement on Facebook in the early hours of yesterday. “Public officers are the only persons who can authorise monies to be sent and they must be satisfied that all is according to financial instructions.”The Premier said: “The Cabinet I lead is responsible for the actions of the Government and though the proper process was followed for the granting of a loan for this project, the end result is a less than flattering view of competence and accountability.“I accept that, and as Premier, the buck must stop with me. I was the Premier and Minister of Finance when the loan was made and I supported this project.“No part of me feels good about the fact that this did not work. I fully get the anger and frustration — it is deserved and I am sorry.”The Royal Gazette revealed on Wednesday that $778,204 of the loan remained unpaid more than a year after civil proceedings were launched against Mr Blakey and Ms Trott in the Supreme Court.A government spokeswoman said lawyers were unable to track down Mr Blakey in Georgia to serve him with a demand for payment and so the Government had “initiated the appropriate steps to engage both the local and US authorities regarding a criminal complaint as part of the recovery effort of these funds”.The Bermuda Police Service said on Wednesday they had not received a complaint about the matter. A BPS spokesman said yesterday: “The Bermuda Police Service has today received an official complaint from Government with regard to Anthony Blakey/Savvy Entertainment and the missing $800,000.”The loan agreement was signed by Mr Blakey and Ms Trott, trading as Savvy Entertainment, and the Permanent Secretary at the Ministry of Economic Development and Tourism.Mr Burt said in his statement that Savvy was a Bermuda company with a local partner and an overseas partner, adding: “This project would never had been a consideration without a Bermudian in the equation. The Government doesn’t give funds to foreigners to ‘build their dreams’.”Paperwork at the Registrar of Companies shows all the shares in Savvy Entertainment were held by Mr Blakey when it was incorporated in September 2016. There is no way to determine the current beneficial ownership because the company is exempted, so does not have to make such information public.Exempted companies are not allowed to conduct business in Bermuda, for the most part, unless they have ministerial permission. But a question to Mr Burt about who the local partner was and whether ministerial permission was granted went unanswered.Ms Trott said she did not hold any shares in Savvy and did not receive any of the loan funds.Mr Burt said the money was lent to Mr Blakey and Ms Trott as a “loan agreement with security”.But he failed to respond to a question about the security.The agreement stated that the loan was for setting up the studio and shipment to Bermuda of recording equipment.“The loan may not be used by you to fund other business, to pay or discharge any other loan, or to make expenditures not directly connected with the studio, and the loan shall be a first charge on the equipment in the studio,” it stated.A source said yesterday: “The security was the equipment. To my knowledge that equipment was never bought. It never got here, so they gave money for something that didn’t physically exist.”Mr Burt said the “top-level recording studio capable of servicing local and international artists” was not “for the sole benefit of someone from overseas”.He said it was to be “constructed in a government-owned building for the benefit of Bermuda, especially local entertainers”.But the source queried that claim, noting that Savvy would have owned the recording equipment had it used the loan properly and paid the funds back, and would have been free to remove it from Moresby House at any point.“The Premier is being kind of disingenuous,” the source said.The Premier insisted in his statement: “Every financial order was followed, advice from technical officers for the protection of the Government of Bermuda was accepted and due diligence was performed. “The two persons who signed the loan agreement are jointly and severally liable for the debt.”He added: “The impression given by this story is that someone came to Bermuda, gave us a presentation and we let them fly away with $800,000 in a suitcase; that is not what happened here.”Mr Burt said the loan was “being serviced for a time”, but a second source told The Royal Gazette that only one payment was made in the summer of 2018, of less than $22,000.The Premier added: “The Ministry of Finance has directed that any future loan agreements that may be considered must have an escrow agreement attached to ensure that loan proceeds are used for their intended purpose.”Savvy Entertainment was also given a contract to manage Cross Island, the home of the 35th America’s Cup, in 2018.Mr Dias said Wedco had previously made unsuccessful attempts “to try and acquire a tenant or entertain possible viable business opportunities” for Cross Island.He added: “Wedco was approached by Savvy Entertainment and eventually in January 2018 entered into a one-year management agreement for the purpose of marketing and using Cross Island as an event site. “Once again, they, too, were unable to secure or host events which would have required them to pay Wedco a percentage of the gross earnings. “This agreement has now expired and the site remains on the Wedco website as a venue for rental ... Another local entity since has come forward and was granted an MOU [memorandum of understanding] period while they completed their business plan for consideration. Unfortunately, this too now seems unlikely to come to fruition.”Mr Dias did not provide details about the length of Savvy’s rent-free period or the number of missed rent payments for Moresby House. He declined further comment, citing the police investigation.• To view the loan agreement between the Government and Savvy, as well as Savvy Entertainment’s share capital document, click on the PDF links under “Related Media”

On the run: Savvy Entertainment chief executive Anthony Blakey, from Atlanta, Georgia, convinced David Burt, the Premier, and Jamahl Simmons, then the Minister of Economic Development and Tourism, along with their Cabinet colleagues, to agree to an $800,000 loan in April 2018 to pay for recording equipment for the historic Moresby House, on Pender Road, in Sandys (Photograph via Facebook)