DeSilva: time of reckoning for Morgan’s Point
The corporation tasked with a development plan for Morgan’s Point, which MPs heard today has cost taxpayers more than $230 million without yielding results, is on track to bring “firm recommendations” before the Cabinet.
Zane DeSilva, the Minister of Housing and Municipalities, updated the House of Assembly on management and oversight by the Morgan’s Point Development Company.
He said the MPDC had taken on the law firm Carey Olsen as its corporate secretary, appointed a “dedicated privacy officer” to oversee data protection and was now engaged in a feasibility study for the redevelopment of the site.
Mr DeSilva told MPs: “This study is updating the financial model originally prepared in 2021, taking into account the effects of inflation, site degradation and market conditions.
“The updated model will allow the company, and by extension Government, to consider a range of options for the site’s redevelopment.
“These options include direct development by MPDC, public-private partnerships or the potential disposal of certain assets through sale or lease.”
He added: “In each case, the analysis will ensure that decisions are grounded in rigorous financial assessment and strategic foresight.”
The 250-acre Southampton property, occupied by the US Naval Annex until 1995, was given away for development in a land swap that resulted in the Government acquiring the Southlands property in Warwick.
The swap was agreed in 2008 and finalised in 2012 — with a lengthy remediation for pollution left at Morgan’s Point to follow.
Plans for the luxury Caroline Bay resort at the site, which were backed by a $165 million government guarantee agreed in 2016, left taxpayers on the hook in 2019 when the financing for the development unravelled.
In the House today, Mr DeSilva said there had been a “long and difficult history” of successive plans for development, with the latest project “beset by financial instability from its inception”.
The minister said that the collapse of the deal, which left behind “an unfinished site and a marina” at Morgan’s Point, underscored the need for “discipline, transparency and rigorous due diligence” at the development company.
He said bank accounts for the MPDC were now in place through Bermuda Commercial Bank, with the company tackling its vendor payables and regulatory fees.
Liability insurance is in progress to cover directors and officers, with the MPDC “finalising” the appointment of accounting and legal services and an operations and project management consultant taken on.
Mr DeSilva said that the site was being cleaned up and prepared, with an assessment of hurricane readiness completed and cost estimations in place for contract negotiations.
He told the House that the next step would entail hiring contractors for clean-up work.
Details on a proposed medical tourism facility at Morgan’s Point will be disclosed to MPs, David Burt told the House of Assembly.
The Premier was responding to questions from Michael Fahy, the Shadow Minister of Housing and Municipalities, who asked for the date on which the Morgan’s Point Development Company had approved a memorandum of understanding with the firm Medical Concepts Consulting Management.
Mr Burt clarified that the agreement had been made between the company and the Bermuda Government, and not with the MPDC.
When asked if the MOU would be tabled in Parliament, Mr Burt said he had committed in August during his announcement of the memorandum to bring “relevant details” to the House.
“I will seek legal advice on those particular matters, but I am happy to share as much information as possible, because it’s not something that needs to be hidden,” he added.
Mr Burt said the proposed acreage to go for medical tourism was “under deliberation” and not contained in the MOU.
In further questions, Mr Fahy asked Zane DeSilva if the Premier’s mention of residential development and a retail complex at Morgan’s Point in the 2023-24 Budget had been “premature”, given that feasibility studies were continuing.
Mr DeSilva responded: “No.”
Mr Burt highlighted that responsibility for Morgan’s Point had previously rested with the Ministry of Finance, and that the concept had come from “the team that was working on it”.
“There is a new board in place now that the company is there,” he said. “There is nothing saying what’s been put forward before may not go ahead.”
Site visits with engineers will inform plans for assessing buildings at Morgan’s Point, while a 2021 financial model for the site is being updated for a “range of options” — including “direct development by MPDC, public-private partnerships or the potential disposal of certain assets through sale or lease”.
Mr DeSilva’s statement did not mention the possibility of bringing medical tourism to Morgan’s Point that was raised last month by David Burt, the Premier, in a memorandum of understanding between the Government and a local firm, Medical Concepts Consulting Management.
The minister said that the feasibility study would be advanced to “a point where firm recommendations can be brought before Cabinet”.
Mr DeSilva said he would bring the company’s aims for the site to the House as the MPDC moved from “planning into implementation”.
• To read the ministerial statement in full, see Related Media
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