Sir John Swan has issued a stark warning to the Government, Corporation of Hamilton and local developers: start regenerating the waterfront, or the city "will die".

The former Premier (pictured), this week voted Bermuda's most admired business leader in an omnibus survey, told the Mid-Ocean News that the development of the Hamilton waterfront should be a priority as the island continues to weather the economic downturn.

He added that, if properly executed, such a project would show that Bermuda is still "in business", helping to attract tourists back to the island.

"The development of the waterfront, if taken seriously, can form a core for Bermuda making a statement that it is in business ¿ not just international business, but tourism," he said.

"Hamilton will die if we don't do this. You don't want it to become strictly a commercial city."

Sir John envisages the new waterfront as both an entertainment and shopping centre to rival similar developments overseas.

"The waterfront development would be mixed use, with an entertainment centre, possibly a casino, a convention centre, a cultural centre ¿ supported by shopping and a number of things, including a marina," he said. "There should be no office buildings."

Sir John, himself a prominent property developer, believes that the worldwide recession will not necessarily put a damper on Bermuda's real estate market. Instead, he sees the island's social problems as far greater a liability ¿ more so than any Wall Street crisis.

"There are always people out there not affected by economic changes," he said.

"These people may have a diversified portfolio. If they've planned to do something, they'll do it. There are always wealthy people wanting to spend $5 million. It comes down to whether the environment is conducive. We have to solve our problems with crime and drugs, and stop beating up on each other.

"People feel a sense of uselessness in general, black or white, rich or poor. It depends on how we treat people locally and internationally ¿ that is how Bermuda will be regarded. If we realise there are stresses in the marketplace, we need to be far more understanding, supportive and compassionate. There are those struggling to make things work."

Sir John believes both the residential and commercial property sectors will survive the downturn if Bermuda encourages companies affected by the crisis to consolidate their business here. He added that the rental market is by its nature directly affected by international business on the island, with expatriate workers only able to pay expensive rents if their jobs are secure.

"Bermuda has to encourage the salvaging of the fallout from this sub-prime and derivatives market," he said. "Hopefully, we will create an environment that, if consolidation takes place, it takes place here. This will have a less adverse effect on the rental business, which affects property values."

Sir John is confident in Bermuda's ability to attract growing companies or those looking to consolidate, especially given the problems facing other popular (re)insurance hubs including Ireland.

"We keep thinking Bermuda is expensive, but compared to other jurisdictions, it isn't, and we're working with the dollar," he said.

"Ireland is suffering from inflationary pressures and recessionary conditions ¿ something we have not experienced. We should not buy into the doom and gloom on the nightly news, but if we want to maintain a semblance of normal economic activity we need to be reasonable. There might still be some opportunity, through consolidation ¿ other companies looking to contain cost ¿ or organic growth."

Sir John, in his guise as head of real estate company Challenger Banks, is currently overseeing the development of office building Seon Place on Front Street East. He said that, despite today's market, he has enough confidence in Bermuda's demand for office space to build all of his developments on spec ¿ that is, without any guaranteed tenants.

"Seon Place was built on spec," he said. "My buildings have always been built on spec. I have confidence in Bermuda. Bermuda's done well for me and I have tried to do well for Bermuda. We have people interested in renting but nothing is cast in stone. As far as office buildings go, if there's an economic upswing, then demand for office space will continue. Keep in mind that there is a lot of old office space people are moving out of."

However, he again urges developers to look to the waterfront as a potential "alternative income source" in the long term, citing the "risk factor" of the rentals markets.

"No one will escape the risk factor, whether with domestic or commercial rentals," he said. "It is an opportune time for us to use our political will to bring about policies and practices that try to put into place plans that might benefit us in the short and long term, like alternative income sources."

In July, the Corporation of Hamilton's new Secretary Edward Benevides told the Mid-Ocean News that conversations concering the regeneration of the waterfront were ongoing, and that any announcements would be made in due course.