The Premier will today announce the construction of 125 more affordable homes on the site of a new hotel.

Government is to use public money to help finance a 100-room hotel on the former Golden Hind resort on the South Shore. And as a condition of the capital invested, the developer must also build 125 affordable homes.

The deal is an example of a public-private partnership which Premier Ewart Brown is confident is the way forward for tourism during a time of recession.

Dr. Brown, Tourism and Transport Minister, disclosed the development as he officially opened the 13th Annual Caribbean Hotel and Tourism Investment Conference at the Fairmont Southampton last night.

He also confirmed developer Bazarian International is to break ground on the new five-star Park Hyatt resort at the former Club Med site in the Fall.

Welcoming international delegates to the three-day conference, Dr. Brown said that during such a global economic downturn, creativity and partnerships were the key to encouraging tourism investment.

The new Grand Atlantic Hotel and Spa was an example of a public-private partnership which he predicted would grow throughout the Caribbean.

After years of uncertainty, the brownfield site earmarked to become the Grand Atlantic Resort and Residences looks set to finally go ahead.

Government granted Atlantic Developers a Special Development Order (SDO) for the proposed resort in June 2007. But since then there have been little signs of progress on the 13-acre site in Warwick.

The original plan was for a nine-storey, 220-room hotel. Now however, a 100-room hotel will sit alongside 125 affordable homes.

Dr. Brown told conference delegates a "crisis of confidence" in the global economy was holding back investors, so innovative means of drumming up new capital were needed.

"I was telling a colleague this morning that such is the challenge of our times that a capitalist problem may require a socialist solution," said the Premier. "We have a few of our own, I am proud to say. Tomorrow I will announce an exciting public-private partnership. It's been decades since we've built a new hotel on the South Shore of Bermuda. Hopefully the Grand Atlantic Hotel and Spa will be our first by the next time we host this conference (in Bermuda).

The Premier said the proposed "hotel of around 100 rooms and 125 affordable homes" was "not the initial plan".

"Affordable homes came into the picture because it is part of the Government's commitment to the people of Bermuda,' he said. "We want more of our hard-working people to become homeowners, and this developer was in need of capital which was not currently available on the global markets."

Dr. Brown said the project would use part of Government's Budget for affordable housing as capital for the developer in an investment partnership. "It's a way of matching two national priorities, tourism and affordable homes, while at the same time helping a local businessman," he said. "An example of the kind of positive action which can be achieved, despite the headlines and the toxicity of the local media. A commitment to act in the best interests of our people is still the focus of this Government and that must never be compromised."

Dr. Brown also talked about the implosion of Club Med to pave the way for the new Park Hyatt resort in St. George's.

"It was a significant jolt to the Bermuda tourism infrastructure, and I am happy, no, I am ecstatic to say that Bazarian International will break ground on the former Club Med site in the fall of this year," he said.

US developer Carl Bazarian announced plans to develop the former Club Med site in April of last year. The $294 million hotel will be managed by Park Hyatt and will consist of 100 rooms, 140 condos and 40 fractional ownership units.

Dr. Brown concluded his speech by saying that in such turbulent economic times, those with "protectionist and isolationist" attitudes would not survive. Instead what was needed was a "partnership" approach. The Premier said: "And I can see a future where the public and private sector will form partnerships to reach more goals."