Cabinet Approves Morgan’s Point Project

[Updated] The Cabinet has approved the completion of Morgan’s Point, with 101 residential units planned for phase one along with an amenity village with restaurants, shops, a boardwalk and more, with the Premier saying that “initial cost estimates for this first phase are $130 million.”

Premier Burt tweeted the images below, saying: “Exciting news, Bermuda: the Cabinet has approved the completion of Morgan’s Point. 101 residential units are planned for phase 1, ranging from entry-level to high-end. Amenity village, open to all, will contain dining, retail, a boardwalk and a farmers market.”

The full details were announced in the Budget speech just now and will update this article with the full extract about Morgan’s Point as able, and for full coverage of the 2023 budget, click here and for our ongoing live updates, click here.

A quick look at the Morgan’s Point area as it looks currently:

Update 1.20pm: In delivering the 2023 Budget today, Premier Burt said, “Mr Speaker, late last year in this Honourable House we passed the Morgan’s Point Company Bill to enable the people of Bermuda to take control of the property. Today, as part of this budget statement, I’m pleased to share with the public the re-imagined vision led by the Bermuda Progressive Labour Party Government, which has been approved by the Cabinet.

“Mr Speaker, in light of what was previously proposed at the site, we should begin with what the project will not be. Phase one of the redevelopment plan will not involve the construction of a hotel. We are also not proposing at this stage that there will be condominiums for sale.

“Both concepts have been thoroughly vetted by our advisors and, as a government, we have determined that neither represents the best use of the site at this time.

“Instead, Mr Speaker, we have targeted this mixed-use site for the development of a range of residential rental apartments including a component for seniors’ housing, with an active and engaging Amenities District filled with commercial retail and restaurant opportunities at its centre. To be clear, Mr Speaker, the newly proposed Morgan’s Point Project will not be operated as a gated community, and the Amenities District will be open to all Bermuda residents. The new enterprise will not only put the site into productive use but will also address several long-standing key goals of this Government regarding economic stimulus and increasing housing supply. At the centre of the redevelopment plan is the concept of Live, Work, Play – all onsite.

Goals & Plan

“Mr Speaker, the goals moving forward are simple: we want to put the site into productive use and generate cash returns that more than cover the costs of construction so that Bermuda can recoup the funds that were paid out for the $165 million guarantee agreed by the former government. The vision for operating the site is to provide opportunities in the hospitality, retail and services sectors while also offering a concentrated residential community for the taxi, minibus and, in due course, water taxi and ferry industry to target. So, Mr Speaker, how do we get there?

What We Will Have Post-Transition

“Mr Speaker, Honourable Members will be aware that at present the assets of Georges Bay Limited comprise of mostly completed high-end residential buildings and six concrete shells, with one yet to be erected. Between these two sets of partial structures is a wide expanse of land that had been intended for use as amenities for the hotel.

“Under the new plan, the residential buildings will be completed as high-end rental residences as intended. Completion of these units is the highest return exercise on the site as they were substantially complete when the project went into financial distress. The non-erected concrete shell will be erected, along with the other six functionally identical shells, and they will be reconditioned as ocean-facing residential duplex apartment units. Although there is capacity for 42 units, at this time only three blocks consisting of 18 units will be completed. This is, of course, subject to existing real-estate demand, which could increase and support the completion of all 42 as part of Phase One.

“Mr Speaker, the centrepiece of the project will be the re-imagined Amenities District. Placed between the two existing structures, it will consist of a diverse series of commercial retail, restaurant and services opportunities at ground level and, built on top of them, two floors consisting of 48 residential units. These central Amenities District apartments will be in an affordable range for most Bermudians and will consist of one-, two- and three-unit apartments. Further, an additional percentage of these Amenity District apartments will be priced at a further discounted range to expand opportunities for young Bermudians.

“Mr Speaker, we see the 37-acre Morgan’s Point site and plan as based on commercial principles. However, it should also be viewed through an economic opportunity lens in the sense that this project will generate economic activity for the country, specifically in the western part of the island. Investment in Phase One will serve as a platform for future phases around the Morgan’s Point land, and it is expected that future phases will likely drive a higher commercial output for the Bermuda Government.

“A stylish pedestrian- and bicycle-friendly integrated boardwalk supporting 19,000 square feet of Amenities District rentable area will include unique restaurants and bars, branded and boutique shops, and other stores offering conveniences and necessities. Together these will become the ‘draw’ factor for residents and will increase commercial activity on the western side of the island. Additionally, the repurposing of the existing back-of-house shell for a potential farmers’ market/local food hall will provide another 13,000 square feet of rentable concession space for a grand total of 32,000 square feet of active retail, dining and commercial options.

“The design of the boardwalk and future bridge element will also provide integrated outdoor seating and gathering spaces evocative of New York’s High Line walkway park. World-class facilities will unlock the value and demand for the 101 residential units proposed in Phase One.

Key Factors Driving Project Success

“Mr Speaker, we recognise that projects of this size and complexity come with challenges, and the public would be well within their rights to express scepticism over the execution of Government contracts. To address this we have put a comprehensive process in place.

“Mr Speaker, to oversee governance and control a selection of management team and independent directors on the board will be critical and should have the relevant expertise in hospitality, project management, finance and infrastructure development. The independent board of directors will conduct regular meetings with the Project Execution Team in order to receive periodic key performance indicators on progress and quality. Full requests for proposals [RFPs] with independent scoring will be issued for key partners in the execution of this project, with experience in large-scale, on-island projects seen as a must.

Project Financing

“Mr Speaker, initial cost estimates for this first phase are $130 million. Discussions about the fundraising process will be run in parallel with the design and definition of cost elements. Our present assumptions on financing consist of two debt tranches: a combination of a senior debt tranche secured against Morgan’s Point land and applicable assets as built and a subordinated debt tranche provided by a local Bermudian bank, backed by a Government guarantee. Both tranches will be backed either by security of the property or sovereign guarantee, thus minimising interest costs. Importantly, the construction and operation of Phase One will increase the value of the remaining land assets under the control of the Government and serve as a land bank for future development.”

Images, which we assume are renderings of the planned development, that the Premier tweeted

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