Gencom $11m handed over to Government today
Payment from the owners of the Fairmont Southampton to cover redundancy payments to staff by Government have been handed over, the finance minister confirmed today.
Curtis Dickinson said the closure of the island’s biggest resort last October had created a “perfect storm” for the 750 staff “already suffering from the extended layoffs because of the Covid-19 pandemic”.
He added Westend Properties, a subsidiary of US-based Gencom, was “unable to meet its obligation to make redundancy payments in a timely fashion”.
Mr Dickinson said there was also no guarantee on when the employees would get their cash.
He added the Government had to step in.
Mr Dickinson said: “Action was required and the Government of Bermuda decided that it was unacceptable to allow this situation to continue unaddressed.”
Mr Dickinson said Westend Properties would also pay about half a million dollars for the Government’s legal and consultant fees “in the near future”.
The company paid the $11 million into an account for the lawyers representing the staff last Friday.
The staff, 500 of them Bermudian, joined forces in a class-action lawsuit against Westend as a condition of getting bailed out by the Government.
Mr Dickinson said the money had been wired to the Government’s accounts today.
He added: “This repayment is an excellent outcome of the Government’s action which has eliminated the Government’s financial exposure in relation to the employee loans.”
Gencom bought the resort in 2019 and announced plans for a $180 million refurbishment.
When the hotel was shuttered last October, an 18-month renovation was announced.
Mr Dickinson said Gencom had “secured further funding to allow Westend to continue with pre-development work”.
“They are prepping themselves for the development, and they are still looking to raise financing for the substantial redevelopment.”
He said model rooms were being built as part of the pre-development, which would include some asbestos abatement and the removal of a buried oil tank.
Mr Dickinson said that “the bulk of the work will be the refurbishment of the existing hotel”.
He added the project would bring jobs and an economic boost, but warned that recovery from the pandemic in the tourist industry would be “difficult to forecast and subject to significant risk”.
Mr Dickinson said the Government supported the redevelopment, but was committed to balancing the island’s budget by the 2023-24 financial year.
He added: “In that context, we understand Gencom is making progress with parties strongly interested in partnering to finance the redevelopment, and we wish them success.”
Mr Dickinson said the Government had seen some of the architects’ blueprints for the hotel, which included more conference space for business visitors.
⋅ To read the minister’s statement in full, click on the PDF under “Related Media”.