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Planning board says minister should not approve hotel SDO

Fairmont Southampton and Turtle Hill Golf Course (Drone photograph by Rufus Bonnar)

Members of the independent body tasked with considering planning requests agreed unanimously that the Minister of Home Affairs should not make a special development order to pave the way for up to 250 units at the Fairmont Southampton.

The Development Applications Board concurred “wholeheartedly” with the findings of the Department of Planning, which presented members with an assessment of the proposal from Westend Properties Ltd.

An earlier report from the department concluded that the submission conflicted directly with the goals of the Bermuda Plan 2018.

It said that the proposal was “considered to represent an unsustainable form of development which would result in several adverse environmental effects” that the applicant had failed to show could or would be satisfactorily mitigated.

Westend Properties said it was not surprised by the DAB decision but took exception to a suggestion by the board that the scheme put the island’s tourism product second to a focus on real estate.

Minutes from the DAB meeting on September 20, which were published online yesterday, said: “The board unanimously confirmed its wholehearted and complete agreement with the assessment, conclusions and recommendations of the department that the minister should not proceed with making a special development order.”

Westend Properties, an affiliate of Miami-based investment firm Gencom, sought in-principle approval for up to 159 tourism and 91 residential units in buildings of two to four storeys at the Fairmont Southampton, where the 593-room hotel has been shuttered since 2020.

The DAB minutes said: “The board expressed the view that the proposal puts Bermuda’s tourism product secondary to being a development focused on real estate and is not in the national interest.

“The board raised concerns that the proposed development would become an ‘unfinished eyesore’, with comparisons made to Caroline Bay at Morgan’s Point.

“The board expressed the view that the proposal is clearly not in the spirit of the Bermuda Plan 2018 or what Bermuda aspires to achieve in respect of the character and quality of its tourism product.”

Members had “strong concerns” that once the hotel was refurbished and reopened, it would be within an active construction site for years.

A scheme for up to 261 units in buildings of two to six storeys was first put forward by Westend Properties in April but met criticism from residents and campaign groups amid fears about impacts on the landscape and environment.

In July, a revised request proposed a reduction by 11 in the overall maximum number of units and none would be higher than four storeys.

The DAB minutes said the board questioned “whether and to what extent” the applicant took on board the planning department’s feedback.

They added: “Technical officers advised that some recommendations were taken on board and the department worked closely with the applicant and their environmental consultants to improve the proposal as far as possible. However, the applicant declined to address a number of matters [as detailed in the presentation and board report] and, most critically, did not significantly reduce the proposed number of units.”

The minutes added: “The board expressed the view that Bermuda does not need the residential development which is being proposed and the details which have been provided do not present a high-quality tourism development.

“The board raised concerns over procedures for making SDOs and the planning appeals process, noting that both allow development to be approved which are in conflict with the Bermuda Plan 2018 and against recommendations and decisions of technical officers and the board.”

Members asked whether SDO requests typically had a significant number of outstanding details.

The minutes said: “Technical officers advised that the current process for considering SDOs is new and, previously, SDOs have been made with minimal details, little to no public consultation and no proper consideration of environmental impacts. New procedures require a great deal of additional information and assessment and provide greater transparency.

“Technical officers further noted that, if the minister decides to make an SDO, this will have the effect of granting in-principle planning permission. Subsequent final development applications will be bound by the SDO, such as the number of units, and will be required to be considered by the board against any conditions attached to the SDO.”

The minutes added: “The board expressed the view that the proposal is more akin to a feasibility study to assess financial viability than a development proposal which responds to the site and surrounding area.”

Westend Properties said: “We aren’t surprised by the decision of the DAB; rather, it’s what we expected.”

The company claimed: “The DAB had no choice but to recommend that the Minister of Home Affairs turn down Westend’s Fairmont Southampton SDO application — it is, after all, legally prevented from supporting a proposal that doesn’t conform to the current development plan.”

Procedures published on the planning department website said that an SDO can be made by the minister responsible for planning — Walter Roban, the Minister of Home Affairs — under the Development and Planning Act 1974.

They said an SDO can grant planning permission for a specific development or class of development; or allow the DAB “the discretion to grant planning permission for development which it could not approve under the provisions of the relevant development plan”.

Westend added: “We do, however, take exception to the board suggesting that the proposal puts Bermuda’s tourism product secondary, particularly considering two thirds of the proposed units are for tourism.

“The development’s primary purpose is, and has always been, to transform the property into a year-round destination resort that will benefit Bermuda as a whole, putting the proposal squarely in the national interest.

“Westend continues to hope the minister will consider the many benefits this development offers Bermuda and its people when he reviews our application for the SDO.”

Home affairs ministry response

A spokesman for the Ministry of Home Affairs highlighted that the request for in-principle approval to add up to 250 tourism and residential units at the Fairmont Southampton follows a set procedure.

He said: “The ministry appreciates the public's continued attention concerning the Fairmont Southampton special development order.

“It is also pleased that the Development Applications Board minutes are now available online despite delays resulting from the recent cyberattack.”

The spokesman added: “The ministry can advise that with the DAB's recommendations and all others contained in the report, the next step involves the minister deciding on the SDO request.

“Should the minister grant an SDO, in accordance with the law, it is done via the negative resolution procedure, made once gazetted and laid in the House of Assembly thereafter.

“This is an important project, and the process continues to be managed in accordance with the statutory requirements under the Act.

“The complete process by which SDO applications are considered, as set out in the Development and Planning Act 1974, and the Department of Planning's Procedures for Making Special Development Orders, is available online at the Department of Planning."

Craig Cannonier, the One Bermuda Alliance shadow tourism minister, believes the Minister of Home Affairs, Walter Roban, faces a challenge.

He said: “It is important that ministers take any advice submitted by their boards and senior Civil Service members seriously.

“A board’s role is to steer ministers in the right direction and to assist in avoiding potential catastrophes.”

Mr Cannonier added: “To allow politics to interfere is a recipe for disaster.

“The Minister of Home Affairs knows all too well he has a serious challenge on his hands.”

In a memo that accompanied its submission, Westend Properties said the professional services firm PricewaterhouseCoopers calculated that the residential component of the project proposed would generate an additional $1.4 billion in gross domestic product at present value.

It added: “Approximately $300 million is attributable to job creation during construction, while an additional $1.1 billion is attributable to the wider impact of the demand for services to support the residences.”

The memo said that a hotel-only investment scenario would not provide enough revenue to attract capital.

The DAB minutes, which will be provided to the minister along with the planning department report and all other representations and consultee responses to help in his decision-making, highlighted that board member Denis de Frias recused himself from discussions and consideration of the matter owing to a conflict of interest.

A 2009 SDO for the Fairmont Southampton resort gave in-principle permission for 71 fractional tourism units, 37 residential villas and 22 town homes but none of the approved buildings was constructed.

To read the DAB minutes and the report from the Department of Planning, see “Related Media”

UPDATE: this article has been updated to include comments from Westend Properties

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Published October 14, 2023 at 8:00 am (Updated October 14, 2023 at 8:17 am)

Planning board says minister should not approve hotel SDO

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