$190m financing in place for Fairmont Southampton
Finances to start the much anticipated redevelopment of the Fairmont Southampton are now in place, owners of the island’s biggest resort this morning revealed.
Westend Properties said it had secured “highly-reputable international lenders” for the $190 million-plus project.
However, a statement from the company made no mention of financial guarantees from the Government, although the Premier later told MPs a guarantee for an unspecified amount will be provided.
Closure of the hotel in October 2020 was a major blow to Bermuda’s economy, with the loss of more than 750 jobs as the Covid-19 pandemic gripped the island.
Developers said work would begin this summer, with a reopening slated for the autumn of next year.
It is understood that Curtis Dickinson’s shock resignation as finance minister just days before last month’s Budget was partly triggered by a Cabinet bust-up with David Burt, the Premier, over Government’s role in the Fairmont Southampton redevelopment.
The Premier stated earlier this month that a $50 million guarantee had been agreed in principle in 2019, but had since lapsed.
A spokesperson for Westend Properties said today: “The funding for the Fairmont Southampton redevelopment is in its final stages with the announcement of an agreement being made between the Government and Westend Properties.
“Following dedicated efforts and extensive negotiations from both parties, as well as the Union, the agreement has now been executed by the Acting Financial Secretary.
“Westend Properties has secured highly-reputable international lenders for the $190+ million redevelopment. Following the finalisation of the agreement with the Government, the repositioning of the resort can move into the development phase.”
The company said it had also invested in “extensive planning and predevelopment activities”.
Karim Alibhai, principal of Gencom, the managing partner of Westend Properties, said: “We are thankful to all parties who were involved in helping us get to this stage of the redevelopment, including the Premier, whose efforts were instrumental.
“The plan as of now is to break ground early this summer with the intent of the resort reopening by the fall of 2023.
“Undertaking a renovation of this scope during a global pandemic has required managing through a very difficult and unprecedented economic situation.
“It has not been an easy journey, however, against the odds Gencom has continued to pursue this large-scale project.
“We believe with the right investment, the Fairmont Southampton will return to its former glory, attract a steady stream of revenue for Bermuda and create over 800 direct employment opportunities, and many more related jobs.”
The Premier stated: "This agreement is a critical step in the redevelopment of a signature tourism property in Bermuda.
“Gencom has demonstrated a genuine confidence in our tourism product and their determination to restore the Fairmont Southampton is a tremendous vote of confidence for the future of Bermuda's tourism product.
“The economic activity and the opportunities for Bermudian employment are the most exciting aspects of this project. The Government of Bermuda is demonstrating that we can and will deliver economic recovery and social renewal for Bermudians.”
December 2019: the hotel is bought by Gencom, an investment firm based in Miami, Florida, with a major 18 month long overhaul of the resort planned.
October 2020: Fairmont Southampton shuts down with the loss of more than 750 jobs.
March 10, 2021: Government insists that it had not committed to provide any form of financial guarantee for the project.
February 4, 2022: David Burt, the Premier, signals that a deal with Gencom is imminent, telling MPs it could be struck that day.
February 14, 2022: Curtis Dickinson makes shock exit as finance minister just days before the Budget. A bust-up over revamp guarantees between himself and the Premier is believed to be one of the major reasons fro the departure.
February 15, 2022, ex-Premier Sir John Swan tells The Royal Gazette that “everybody knows” Mr Dickinson had reservations about the Fairmont Southampton deal. Sir John says Mr Burt has “a crisis on his hands”.
February 16, 2022: David Burt denied Mr Dickinson quit over Fairmont Southampton, stating: “I don’t believe that is accurate to say.”
February 25, 2022: Premier Burt delivers Budget, says little about the Fairmont Southampton project.
March 3, 2022: Premier Burt reveals that a $50 million guarantee was agreed in 2019, but has since elapsed. This flatly contradicts the Government statement of March 2021.
Mr Burt says the total cost of the hotel revamp will be $376.2 million.
March 4, 2022: The Bermuda Industrial Union backs a $50m government guarantee for the redevelopment of the island’s biggest resort.
March 25, 2022: Developers announce they have secured funding for the project and expect work to begin this summer with the resort reopening in the autumn of 2023.
President of the Bermuda Industrial Union, Chris Furbert said: “Having been involved and fought for the reopening of this hotel for the last two years, as it is not only crucial for my members but also for Bermuda‘s position as a premier tourist destination.
“It is the largest non-government employer on the island, the hotel rebuilding phase will create hundreds of construction jobs, and when the hotel opens Bermudians can take the opportunity to create careers for themselves.
“We believe with the new collective bargaining agreement already in place we can enter a new chapter in industrial relations between the BIU and the hotel management and work together to create jobs and careers for our members.”
Wayne Caines, chairman of the Bermuda Tourism Authority, said reopening the hotel resort would be a major boost for the island’s attractiveness to visitors.
He said: “With the return of our marquee conference resort facility, Bermuda will be positioned to reassert our claim as a premier leisure, and group travel destination.
“More than just extra rooms into our inventory, Fairmont Southampton’s reopening will drive up our capacity for year-round group business and create consumer demand for our airline partners.
“What’s more, the redevelopment of the property will fire up the economy through construction in the short-term and reintroduce hundreds of tourism jobs for 2023 and beyond.”