EXECUTIVE SUMMARYThe proposed SDO is NOT in the interests of Bermuda or BermudiansThe financial troubles of Tucker’s Point have NOT been solved by the granting of SDOs on two previous occasionsThe granting of a further SDO will bail out Tucker’s Point to the exclusive benefit of its investors at Bermuda's expenseThe debt burden of Tucker’s Point is significant and while the proposed housing developments might reduce the financial loss to Tucker’s Point, it will not save the hotelReceivership could save the hotel and is likely to be a better option for Bermuda as the hotel could be purchased for significantly less than it cost to build, reducing debt repayments for the new owners and enabling the hotel to charge more competitive prices and become profitable in its own rightIf the hotel goes into receivership, it is possible that no jobs will be lostMany Bermudian families were forced off this land in the 1920s with the understanding that it would be used to benefit the community as a whole; to allow it to be sold off as housing to benefit a few individuals and institutions that made poor investment decisions is morally wrongOur precious remaining open spaces are the very amenities that draw visitors to our unique island and the loss of any open space degrades our tourism productBy developing residential properties on land zoned for tourism, actual hotel development can never take place on that landBy developing land zoned for conservation, we are destroying the island’s critical (and already scarce) “green lung” acreage that is so vital for sustaining the health and wellbeing of our peopleThe proposed SDO creates double standards by:1. Preventing the proposal from being submitted to the same process and public scrutiny that the plans of any average Bermudian homeowner would be2. Allowing Tucker’s Point to sell to non-Bermudians when Bermudians cannotThe likely arguments in favour of this proposal are highly inadequate and largely invalidBEST is committed to working with the Bermuda Government to develop a distinct and sustainable tourism plan that will benefit ALL Bermudians in both the long- and short-term.IntroductionThe Bermuda Environmental and Sustainability Taskforce (BEST) supports the recent move to debate all Special Development Orders (SDOs) in Parliament and, in view of the upcoming debate surrounding the proposed Tucker's Point SDO, would like to make an urgent plea to all Members of the Legislature not to be bullied again into accepting and approving an SDO that can only be branded illegitimate.Minister of Business Development and Tourism, Patrice Minors, and Minister of the Environment, Walter Roban, have voiced their support for the issuance of this SDO based on the premise that “our hotel product is of national importance”. BEST does not dispute this and very much supports the revamping of Bermuda's tourism product. The fact remains, however, that the SDO proposed for Tucker's Point is for residential properties and only incidentally for hotel development. In the words of the President of Tucker's Point, Edward Trippe, himself, “We have been very successful with the residential component to date and it is really a continuation of that element of this resort that is important to us.” This is not a hotel development that will create jobs for Bermudians. This is not the development of a luxury resort that will miraculously revive our tourism product and benefit the Bermuda economy and community as a whole. This is a high-end residential development on one of Bermuda's largest remaining and most ecologically significant woodland areas and these are developers receiving tax breaks to build homes to sell to foreigners. This is not a project of national importance. This goes against Bermuda's national best interests.Tucker's Point has already indicated that the only tourism component of the entire three-phase proposal may never be built as “[t]he actual number of additional rooms will depend on ...tourism market conditions as the expansion gets under way.” Given an average 2010 occupancy rate of just 56.5% and greatly reduced air arrivals to the island in recent years, it is highly unlikely and wishful thinking that tourism market conditions will improve to the extent that the hotel component of this development will ever be built. As previously seen with the former Palmetto Bay Hotel site, among others, the inclusion of a tourism component is increasingly a pretence under which to obtain planning permission for residential development and sales. When David Bragg of HSBC listed the project's stakeholders at a recent press conference, he could but name “banks, would-be-investors, developers.” This is not a development for the people of Bermuda. This is a development of the people's land that will benefit only a select few.While BEST supports that some environmental considerations were made in drafting the SDO, the 7.5 “compensatory” acres (mostly wetlands and pond) to be designated a land preservation entity (of what is a 240 acre site) is a pittance unworthy of even being discussed as justifying the approval of an SDO. Once the land is developed and the profit taken, the hotel itself will in all likelihood remain unprofitable and the Government will face further demands and threats from Tucker's Point that they must develop more land or they will pull out. This is a pattern that is already repeating itself and BEST cannot emphasise strongly enough that this pattern must be broken before it is too late; before Bermuda's rich natural heritage has been squandered and there is no land left to give.Disturbing PatternAs most will be aware, the Tucker's Town area was originally and largely owned and occupied by black farmers and fishermen who were forcibly relocated, in some cases with little compensation, circa 1920. This relocation was made possible by an act called the Compulsory Purchase Order, which was passed in order to expand Bermuda as a tourism destination. The intention of this act was that those Bermudians being forced to leave their land were doing so for the greater good, as this land would be used to benefit the Bermuda economy and the community as a whole. Even at that time, however, concerns were expressed by MCP A.B. Smith that the Bermuda Development Company, which was to acquire the lands, “may not spend money on them but, in time, get rid of them at a great profit” .In 1995, what is now Tucker's Point was given permission to build 35 houses at Ship's Hill. This permission was granted and the land at Ship's Hill was subdivided and developed. In 1998, a second demand was made to allow certain portions of Castle Harbour Golf Course to be sold off for housing despite having no plans to refurbish and modernise the Castle Harbour Hotel. Around this time, Bermuda Properties sent a letter to all Members of Parliament (MPs) essentially to say “If we don't have what we want, we will pull out”. As asserted by MP Jim Woolridge at the time, “This is not the type of partnership that Bermuda should have and this is not the type of partnership that we should tolerate.” Permission to build more residential units was granted but the Marriott Castle Harbour Hotel was closed down regardless. There is no guarantee that the same will not happen with Tucker's Point.Tucker's Point has previously been granted SDOs in 1995 and 2001 and this is the third SDO to be sought by the property in just sixteen years. The previous SDOs have not had the positive economic effect that was the intention of their approval. There is no reason to believe that this development will be any different. Tourism occupancy rates at the existing Tucker's Point are already below expectations and adding additional rooms will only exacerbate this problem. Financial analysts advise that it is questionable business sense to add additional hotel rooms in the current economic climate and, as stated by the President of Tucker's Point, this is not their priority: it is really a continuation of the residential component of the resort that is important to them. In this particular instance, this involves the subdivision of one of Bermuda's richest ecological areas into residential developments in order to profit the bankers, the developers and the investors. This is not aligned with the interests of the broader Bermudian public.Double-StandardsAs BEST understands, in the case of the 78 additional private residences that form the majority of the Tucker's Point proposal, an SDO is being sought due to the protected status of much of the land proposed for the development. SDOs were never intended to enable the construction of residential units, let alone the construction of such units on protected lands. It is doubtful that the average Bermudian would be permitted to build a small addition to their home on land of such status and certainly not without the proposal being submitted to due process and public scrutiny. It is unjust that such a large and high impact development should not be treated to the same process.A second double-standard is being created by developments such as this by allowing “hoteliers” to sell to non-Bermudians when Bermudians cannot. In the words of MP Trevor Moniz, "The Government has stopped Bermudians from selling either qualifying condos or houses to non-Bermudians while enriching hotel developers by permitting them to become property developers where the hotel component will become vestigial and may whither away altogether.” Such differential treatment disadvantages the average Bermudian and is not in the best interests of Bermuda or Bermudians.Destruction of Bermuda’s Tourism Product and Critical “Green Lung” acreageThrough the proposed SDO, as with others before it, we are selling off Bermuda's most valuable and most finite resource: our land. Through the proposed development, as with others before it, we are not boosting our tourism figures but destroying the very foundation on which our entire tourism industry is based. The vast majority of our tourists come from densely populated conurbations. They come to Bermuda primarily for the island's traditionally unspoilt natural beauty and famous hospitality. They come for our beautiful beaches, lush vegetation, unique architectural heritage and green open spaces. In order to be competitive in the global tourism market, we must either compete on price or provide something altogether unique. As competing on price is not a feasible option, it is our uniqueness that must be preserved. To reiterate the words of Jennifer Gray, Executive Director of the Bermuda National Trust, “We need to recognise the economic value of our precious remaining open spaces which are the very amenities that draw visitors to our unique island and we need to also recognise the value of the biodiversity in these spaces which are core to the health of our environment and our own vital health.”Allowing large-scale residential development on lands zoned for conservation and tourism is not a solution, it is the start of far greater problems in the longer-term. By building on conservation areas, we are destroying both the island’s tourism product and its critical, already-scarce “green lung” acreage. With Bermuda’s extremely high population density and spreading urbanisation, green and wooded areas are vital for sustaining the health of our people, particularly given that the vast majority of the population cannot afford to buy any open space for themselves. Green spaces are widely recognised to improve both physical and mental health by providing places for informal recreation and creating breathing spaces to distract from the stresses of modern life. These benefits should be particularly embraced given Bermuda’s current social climate. Each additional house that is build on that site causes Tucker’s Point, and the island as a whole, to lose some of its attractiveness, exclusivity and charm. Furthermore, by developing residential properties on land zoned for tourism, we are eliminating the possibility that any actual hotel development can ever take place on that land, short of a repeat of the enforced relocation of families that occurred in the 1920s at this very location.ConclusionsBEST understands that this SDO is being considered in order to avoid Tucker’s Point defaulting on its loans and possibly going into receivership. To grant an SDO on these grounds would be short-sighted, weak and a betrayal of principle. The development proposed has little chance to increase the long-term prospects or profitability of the resort itself and, once the land has been developed and the profits taken, the Bermuda Government will in all likelihood face further demands and threats from Tucker's Point that they must develop more land or they will pull out, as has occurred on previous occasions.The Government is aware, as we are, that Tucker's Point is suffering from operational issues and BEST has recently been advised that the challenges currently being faced by the property, along with other resorts that are struggling financially, have more to do with the model they have chosen and an inability to keep pace with rapid changes in resort evolution. Development concessions CANNOT fix these problems and, aside from providing a temporary capital injection, real-estate development will certainly not save the hotel at Tucker's Point. At least if this resort does go into receivership, the possibility exists that it may be bought by an investor that can turn the business around and develop a concept that works. BEST understands that the remaining Elbow Beach tourism units, for example, are doing exceptionally well. In addition, our analysts advise us that the ability of a new owner to improve both the hotel’s success and its prospects as an employer of Bermudians would be greatly aided by the fact that, in the current economy, the resort could be purchased for much less than it cost to build. This would lead to reduced (if any) debt repayments and enable the hotel to charge more competitive prices and potentially attract more guests.Given the island's limited physical size, such land development in Bermuda cannot be sustained. It is critical that we put a stop to this disturbing pattern immediately and work together to develop and implement real, long-term, and sustainable solutions. This is not a project of national importance but a national travesty and the granting of this SDO arguably constitutes a crime against the people of Bermuda. BEST again urges Members of the Legislature not to be bullied into accepting and approving this illegitimate SDO.***Dispelling the Likely Arguments in Favour of the Proposed SDO1. The development will provide a welcome boost to the construction industryAllowing unnecessary and high impact development for the sake of temporarily creating construction jobs is not a long-term solution. Despite the large downturn in construction projects there are still many non-Bermudians being employed in the Construction sector. For example, construction manager Andy Pereira has warned that the hospital and Waterloo House hotel redevelopments are not going to save the industry as much of the work involves reinforced concrete which requires overseas expertise.Instead of artificially creating construction projects, BEST supports Junior Economy Minister Ashfield DeVent's recent suggestion that Bermudian construction workers should consider retraining in modern construction methods so that they can do jobs currently being farmed out to foreigners. Furthermore, the re-opening of the Bermuda Technical Institute to train Bermudians in the trades could provide further employment opportunities by preventing the loss of skilled construction positions to work permit holders. Through conversations with students, it is clear that many Bermudian males have no desire to work in an office but wish to do something practical that uses their hands. Training in the trades can provide an excellent career option for such Bermudians while also reducing the number of skilled workers that must be brought in from overseas and the associated pressures their numbers place on Bermuda's infrastructure.2. The additional housing units will help to depress rents and make housing more affordable for BermudiansThe housing proposed for Tucker's Point is high end real estate that will primarily be marketed to foreigners and is very unlikely to have any major impact at the lower end of the housing market where it is needed. Instead, by flooding the market with “luxury” real estate, these units will likely serve to further depress prices for those Bermudians who have managed to successfully work their way up the housing ladder. As the Tucker's Point homes will be available to a larger market than the market available to higher end Bermudian sellers themselves, who are only permitted to sell to other Bermudians, such existing homeowners would be at a further disadvantage.Instead of developing our precious little remaining land into housing for a stable (if not declining, given the recent large-scale loss of work permits) population, we should be considering alternative solutions to bring rents down and make housing more affordable to those Bermudians that need it most.Possible solutions that could be explored include:i. Reserving rent-controlled apartments for Bermudian tenants only• Rent-controlled properties are often the most affordable and/or the best value for money but such properties are currently available for non-Bermudians to rentii. Limiting the second-hand car market to Bermudians only• This would encourage the sharing of accommodation by work permit holders who might otherwise opt to rent individually in order to buy a second-hand car. This happened more often before the existence of the second-hand car market as work permit holders did not wish to buy a brand new car for only a couple of years. Limiting the second-hand car market to Bermudians only would therefore likely reduce demand for housing, and consequently rental prices, with the added benefit of reducing congestion on our roads.iii. Discouraging corporate housing allowances as these can lead to artificial inflation of the rental market• Work permit holders could be attracted by equivalent salary increases or basic housing allowances that do not encourage the payment of above-market rental values3. The development is necessary to ensure a viable future for the hotel at Tucker's PointAs discussed in BEST's position paper, the proposed development will only provide a temporary capital injection and will not secure the long-term, or even medium-term, viability of the Tucker's Point resort. The previous SDO granted for this purpose did not have the desired economic effect and there is no reason why this one should be any different.Instead of allowing protected lands to be destroyed for residential development that will really only benefit the bank, the developers and Tucker's Point investors, we should be encouraging the hotel to address their operational issues and re-address their concept model. In a recent Conde Nast survey, for example, Tucker's Point fell down in the categories of “Food” and “Service”. A large-scale residential development and additional rooms is not going to even begin address these.If Tucker's Point is unable to improve its prospects financially and is forced to go into receivership this could be a good thing for Bermuda as the possibility exists that it may be bought by an investor that can turn the business around and consequently employ a larger number of Bermudians in the longer-term.4. The development is necessary to salvage our struggling tourism industryAgain, this point is addressed in some detail within BEST's position paper. Ultimately, the development proposed is far more likely to impede than to benefit Bermuda's tourism industry. The vast majority of our tourists come from densely populated conurbations. They do not come to Bermuda for shopping or entertainment. Instead, Bermuda's unique natural beauty and hospitality are the selling points around which our tourism product is based.Instead of allowing unending residential development by hoteliers who are unable to make their hotels work, Bermuda needs to look at what does work and develop a distinct and sustainable tourism plan. BEST began to consider the options in their research piece on Sustainable Tourism Development, sent to then Junior Minister of Tourism Marc Bean and published in the Royal Gazette on July 13, 2010, and is committed to working with the Bermuda Government to develop a strategy that will benefit all Bermudians in both the long- and short-term.