Government has signed a multi-million lease agreement with Pembroke Hamilton Club Hamilton (PHC), The Royal Gazette can reveal.The Ministry of Education has agreed to pay PHC as much as $10 million, spread over a 20-year period, in usage fees for schools in the zone to use the club’s $4 million multi-dimensional complex.The usage fee is to increase annually at the rate of inflation.It is believed the deal between both parties was struck in 2008 but hasn’t been made public until now.When reached yesterday, PHC president Chris Furbert declined to comment while attempts to obtain comment from the Ministry of Education proved unsuccessful.Meanwhile, PHC are currently negotiating a loan with the bank to finance the new multi-dimensional complex at their Warwick property.It is anticipated the lease agreement they have with Government will cover as much as 60 percent of mortgage payments over the next two decades.PHC are keen to secure a 25-year loan, said to be in the region of $10 and $11 million, from the bank to complete the complex project. However, it is understood the bank is not willing to loan as much.One of the primary concerns the bank has is the interest roll up given that PHC will not receive usage fees from the Ministry of Education until the entire project has been completed.The bank has proposed to loan PHC between $7.5 and $8 million without the interest roll up being covered.Government have assisted PHC in their negotiations with the bank in the past and are keen to see the project, which is already behind schedule, completed. Once completed, Government believe the new facility will enhance the Warwick community and Bermuda as a whole.In 2001 PHC borrowed $1,202,778 from the Bermuda Industrial Union (BIU) to cover costs for the installation of a new lighting system and work done to their to Warwick ground.The loan was to be paid back over a 17-year period at an annual interest rate of seven percent via monthly payments of $10,075.93.The club has yet to pay principal on the loan and for the past several years has only paid on the interest in monthly payments of $7,000.According to the BIU’s accounts, the Union issued a series of promissory notes in 2001 with an interest rate of seven percent. According to a note in the accounts, which were audited by Ernst & Young, the borrower, in this case PHC, reserved the right to make principal payments at any time. The promissory notes were secured by the assets to which they relate, primarily land and buildings, the note said.According to reliable sources, PHC used the deeds to their Reid Street building as collateral for the BIU loan.After the BIU made the $1.2 million loan to PHC, the club successfully negotiated a 20-year lease agreement for $1 million with Esso for 20,000 square feet of land at their Warwick ground.Esso subsequently leased an additional 2,000 square feet of land for $125,000.00 to bring the total amount of the lease to $1,125.000.00.Monies for leasing the gas station property have been fully paid to PHC.Earlier this week Mr Furbert denied claims that the Union, which he is also president of, had called in their loan to the iconic club.PHC have suffered losses of revenue in recent years primarily due to the recession and loss of tenant Total Home Ltd at its two-storey Reid Street building.Total Home went into liquidation last year with the Registrar of Companies being appointed as the official receiver. All funds garnered from the liquidation of Total Home were used to pay liquidation expenses, a loan due to HSBC and unpaid employee claims.There were no other available funds to pay other creditors, including landlords PHC.According to Mr Furbert, the PHC had to write off as much as $164,250.00 in unpaid rent.PHC are currently exploring options to generate revenue to pay off debt and improve the club’s financial standing which includes potentially selling the club’s two-storey building in Hamilton.The building is estimated to be worth between $3.2 and $3.6 million.The option of selling the building has been strongly rejected by some of PHC’s membership.