“Examining Options” To Assist MPL Developers

August 16, 2013

Minister of Finance Bob Richards said he is “examining options” to assist the Morgan’s Point developers, Morgan’s Point Limited [MPL] to obtain financing for the project, and has issued a letter of comfort to MPL to confirm the Government’s “strong support for the Project and willingness to provide a limited financial guaranty for the project.”

Government is committed by way of various agreements to the remediation of lands conveyed to MPL for the construction and operation of a boutique style hotel, condominium residences, sewage treatment plant, and other facilities.

MPL has advised Government that the environmental remediation issues at Morgan’s Point are impeding its ability to secure satisfactory construction financing for Phase 1 of the project. In that regard, MPL has requested that the Government provide credit enhancement for the financing of Phase 1 of the Project in the form of a limited financial guaranty.

Minister Richards stated: “It is generally not the policy of the Ministry of Finance to issue guarantees to the private sector unless the matter is of national importance. However, the island has not seen a new hotel development for some time and the Government strongly supports this Project and the economic benefits that it will bring to Bermuda.

“We must do more to attract foreign capital to our shores to develop our tourism product. At a recent Tourism Summit held in Bermuda it was noted that our competitors are doing a great deal to attract financing for hotel projects, some Governments are going so far as to guarantee the debt in order to finalize the acquisition of the required financing for the project.

“I am confident that if satisfactory financing is obtained this development will turn a brown field site into a stunning new resort – leading Bermuda back into the forefront of the hospitality industry. Once constructed, the project will create numerous jobs. Additionally, the total build will generate significant revenue for Bermuda both through payroll tax and stamp duty from the sale of units.

“Although the nature and extent of the credit enhancement cannot be quantified at this time and will depend upon the particulars of the Project and the construction loan, I can advise that I have recently provided a letter of comfort to the developers to confirm the Government’s willingness to consider credit enhancement for the project. This letter is required so that MPL can begin discussions with potential lenders for the project finance.

“It is important to note that at this time the Government has made no firm commitment, therefore, this comfort letter is non-binding. Also this action should not be considered precedent setting and is only being considered because of the environmental remediation issues at the Morgan’s Point site.

“The Government is eager for the Project to proceed and succeed, and is looking forward to working with the Developer to achieve that objective,” said Minister Richards.

Last year Morgans Point was swapped for the Southlands property in Warwick, after concerns were raised over building on the Southlands property, which was then owned by Craig Christensen, Nelson Hunt and Brian Duperreault.

They planned to develop a resort at Southlands, however this was met with resistance from segments of the public who wanted the property to be retained in its natural state, so the deal to swap the two properties was worked out.

The 80 acres at Morgan’s Point in Sandys/Southampton was owned by Government, while the 37 acres at Southlands in Warwick was owned by Morgan’s Point Limited, and the two sides swapped the properties.

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Comments (21)

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  1. Bermuda Male says:

    Just do what you need to to get some activity in the construction industry.

    We definitely need something to look forward to these days!

    • Lebron says:

      At least there is some straight talking here, and not some absurd Ewart Brown ribbon cutting followed by absolute silence.

  2. Terry says:

    “letter of comfort”.
    Tell that to the people being ripped off by BELCO and yet they make awards et al.
    I gotta start doing drugs.

  3. Y-Gurl says:

    Can we get the scoop on who is in this Morgans Point Limited, is this a throwback to the old days? Who are the players………..

    • Concerned Citizen says:

      Huh? The folk who have been there all this time.

    • Triangle Drifter says:

      Do you read anything before you post?

  4. boogiedownproductions says:

    If the swap has been made, are we (People of Bermuda) the Landlords of Southlands and how much rent are we receiving from them for their continued usage of this property.

    • Sandy Bottom says:

      Who is using the property? It belongs to the Bermuda government now.

  5. Meeee says:

    I understand that the MPL project could actually get underway with about $75m – $100m in startup investment. By getting underway, I do mean bulldozer blades going in, steel being put in place, concrete being poured, and buildings starting to rise. And obviously men and women employed to do that work.

    Consider this fact. Between 2005 when Hunt/Christensen/Duperreault commenced with that project, the country of Bermuda could have put its good name and excellent credit behind that trio, taken up that $100m in a national bond – on-loaned it to the trio – and got them started,
    Instead, since 2005, Bermuda has borrowed fifteen times that much and pissed it away on what….?

    Today, all Bermuda can do is offer the trio a crappy bit of paper. And Bermuda has thrown away 5 – 8 years and billions of $$$$ and maybe lost an opportunity.

    Stupid, stupid, stupid.

  6. Citizen Banned says:

    How much longer are you going to ‘examine options’ before actually doing something? Pass the gambling bill NOW!!!!!

  7. W.T.F. says:

    “This letter is required so that MPL can begin discussions with potential lenders for the project finance.” Huh? Wait a minute. Didn’t these guys say the same thing when they got their legislation? So after all these years they’re only now starting discussions with potential lenders for the financing?! Good luck with that. I wish I could be there while Nelson Hunt tries to persuade someone to part with $2BN. What a joke. Oh but wait, they have valueless “Letter of Comfort” from the Government. The billionaires will think we’re all crazy now. Go ahead guys, have fun pursuing your pipe dream at the expense of the people of Bermuda who desperately need some action up there. Remember people, these are the guys who wanted to build an Aztec temple-style resort on Southlands and have us driving to work or to Horseshoe through a tunnel. And we were so impressed with their vision we gave them 200 acres to play with in Southampton and now we’re prepared to guarantee the money for them to do it. Scary.

  8. Simple question says:

    A very simple question – when Morgans Point was “swapped” for Southlands, who became responsible for environmental remediation? Did that remain with the taxpayer or was that liability assumed by the new owners?

    • Sandy Bottom says:

      Here’s another simple question. Do you want a hotel built or not?

  9. A. Little says:

    Politicians win gold medals in the Natty Best Island Political Games.

    Mr. Speaker, please allow me the opportunity to present some well deserved gold medals to the following politicians.

    Dale B. wins gold for unwavering loyalty in the face of immense adversity.

    Randy H. wins gold for overstepping party boundaries and ‘finishing well’.

    Wayne F. wins gold for the slippery flip flop manoeuvre.

    Marc B. wins gold for huffing distracting rhetoric.

    Craig C. wins gold for hopeful dreams and visions of future prosperity.

    Mark P. wins gold for airing dirty laundry.

    Michael D. wins gold for hyping up some criminal statistics.

    Pamela G-P.wins gold for valiant first aid attempts at the hospital.

    Mr. Speaker, ifinit weren’t such a vexxing reesasshun, we would have more gold to hand out…..oh vell, maybe nex yuur.

    Patience, peace and love and unity,we all in this together people.

  10. Babylon says:

    Fat chance!

  11. As long as there is NO Barzzarian, Dr. Brown, and dynamite good 2 go!! Please OBA dont play games with us Bermudians we deserve better we have been tossed around for at least 7 years under the last government. And show them how business is done! Thank you!

    • W.T.F. says:

      You take the ferry from Cavello Bay? That’s Dr. Brown too…….

  12. Chris Famous says:

    I think you all forget it was Stuart Hayward, jeff Sousa et al who caused the Hotel on southshore not to be built.

    • jt says:

      Who screwed the initial Morgan’s Point development?

    • Sandy Bottom says:

      No Chris. It was the people of Bermuda who caused that not to proceed. And that time (unlike in the case of Grand Atlantic) the developers listened. As a result the attractive land at Southlands remains attractive, and there is a chance that the unattractive land at Morgan’s Point may be developed.

  13. Jus' Askin' says:

    What are these ‘environmental remediation’ that seem to be holding up things?
    Did you get 80 acres of land with major issues?
    Did you give up 37 acres and expect nothing to be wrong with all you were getting in return?
    I feel you should have only received 40 acres max.
    The other 4 acres land should have been given to the people of Bermuda.
    Bermuda in 2020 will be real interesting ;-)