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Senate passes Fairmont tax concessions

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Artist's impression of Fairmont Southampton Beach Club (Photograph supplied)

Controversial financial breaks for the massive $376 million revamp of the Fairmont Southampton hotel complex were passed by the Senate yesterday after a clash over constitutional procedure.

The One Bermuda Alliance attempted to table a raft of amendments to the legislation but all but one was ruled out of order after the Upper House was suspended for a number of hours as legal advice on the matter was sought.

The president of the senate, Joan Dillas-Wright, said that although the Fairmont Southampton Hotel Act 2022 had not been certified as a money or taxation Bill, only one of the OBA amendments was acceptable under constitutional arrangements.

The Opposition had intended to amend the Bill, if it received the backing of independents, so that the legislation would go back to the House of Assembly for reconsideration.

OBA Senate leader Ben Smith said that although his party supported the reopening of the flagship hotel there were a number of “red flags” surrounding the financial breaks involved in the major deal.

Mr Smith said he was “not sure” why the OBA amendments had not been approved for discussion.

However, PLP leader in the Upper House, Ernest Peets insisted government support for the revamp would mean a huge jobs boost for the island and a major increase in tourism capacity.

Minister of Youth, Culture and Sports, and Senate leader, Dr Ernest Peets (Photograph by Akil Simmons)

The Government said the hotel revamp would provide 800 full-time jobs, as well as construction employment as the complex was remodelled.

State backing for the agreement with developers Gencom was the only item on the agenda for the Senate.

Parliament has approved tax concessions valued at between $121 million and $133 million over 15 years to site owners Gencom.

The Government will also give a guarantee of $75 million, representing 21 per cent of the revised costs of the project.

OBA senator Douglas De Couto criticised the Government’s attitude towards scrutiny of the deal with Gencom and insisted many questions were “still unanswered” regarding the arrangement with the developer.

The move was strongly criticised by Progressive Labour Party MP and former finance minister Curtis Dickinson who quit the Cabinet in February after clashing with David Burt, the Premier, over the deal.

Mr Dickinson told MPs this month that the Government was “flying blind” over the real costs of the Fairmont Southampton situation and being “too generous” to Gencom.

The one OBA amendment that was voted on – which sought to ensure all Bermudian staff were given training opportunities rather than just managers, as laid out in the Bill – was defeated by seven votes to three in the Upper House.

Last night Government senator Owen Darrell described the passing of the Bill as “another important step for Bermuda’s economic recovery”.

The junior Minister of Tourism also took aim at the Opposition, accusing the OBA Senate team of “political gaming”.

Mr Darrell said: “We cannot emphasise enough just how much the people are relying on the economic and career opportunities this hotel redevelopment will bring.

“Today’s debate showed the people of Bermuda that the Government is prepared to lead the way in the social renewal that will come from providing dignified work and economic security for our people.

“Ten minutes before we were to begin today’s important session, Government senators received eight pages of amendments from the Opposition. Almost all of them were unconstitutional and just delayed the important work we had all come to do.

“It must be frustrating for the people of Bermuda to witness this political gaming with Opposition speeches all ending by saying they can’t or won’t support the Bill and then failing to do their duty and vote with their convictions when given the chance to do so.

“Today we are a step closer to the creation of hundreds of jobs and a step closer to this hotel playing its part in the recovery of tourism for Bermuda.”

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Published May 19, 2022 at 7:57 am (Updated May 19, 2022 at 8:29 am)

Senate passes Fairmont tax concessions

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