Hotel development plans scaled back in revised SDO application
The company behind the controversial redevelopment of the Fairmont Southampton hotel has scaled back its plans for the resort after a wave of public protest.
Westend Properties Ltd also said that the hotel was now not expected to open until the summer of 2025.
Westend had originally hoped to build 147 residential units and 114 tourism units on the property, in addition to refurbishing the hotel building.
Those plans — revealed in a special development order request to the Government in April — prompted a backlash from environmental groups who claimed to be “shocked” by the scale of the development.
Within two weeks, protesters presented a petition containing more than 4,000 signatures, calling for the SDO to be rejected.
Although Westend originally argued that it needed to build so many residential units to get a return on its investment, on Wednesday it submitted a revised SDO application that is less ambitious and reduces the amount of proposed new build on the site.
According to the new SDO application, which was released yesterday, Westend has cut back the total number of units from 261 to 250.
The number of units earmarked for tourist use has increased from 114 to 159, while those assigned for residential use have been cut from 147 to 91. As a result, the number of tourism bedrooms will increase from 311 to 441.
In another significant change, the maximum height of buildings has been reduced from six storeys to four storeys.
In a letter to the Director of Planning supporting the revised SDO application, Peter Adwick of Adwick Planning said that the rethink was prompted by adverse public reaction to the initial SDO request.
But his July 26 letter also acknowledged that planning officials had concerns with the original designs.
Mr Adwick wrote: “The feedback received during the public consultation period raised concerns about the proposed development around a number of issues.
“Broadly, the more deeply felt of these covered the extent of development across the site in non-development zones and the need for and mix of tourism and residential development proposed.
“Especially deep concern was expressed about the visual impact of higher rise buildings in the centre of the golf course.”
Addressing that issue, Mr Adwick pointed out that the higher rise structures had been “eliminated” in the revised plan.
He added: “The number of units in this part of the site has been significantly reduced, being less than half the number of units in the original proposal. The scale and massing of these buildings are also diminished with the centrally located residences being only two-storey.”
The head of the company behind the redevelopment of the Fairmont Southampton hotel has acknowledged that the project has been beset by problems and involved a certain amount of risk.
But Karim Alibhai, founder of Miami-based Gencom, which owns Westend Properties, insisted the $430 million project would be completed successfully, despite the setbacks.
Gencom acquired the hotel through its buyout of Westend Properties in December 2019 and immediately announced that an ambitious revamp was in the pipeline.
Since then, after protracted negotiations, the Government has increased loan guarantees from $50 million to $75 million and also given to $133 million in tax concessions over the next 15 years.
But ground has yet to be broken and this week David Burt, the Premier, was forced to admit that a contract between the two parties — which he had expected to be signed by last Christmas — had still not been agreed.
Questioned this week about the project by trade publication Hotel Investment Today, Mr Alibhai said: “That one has been not so easy to execute on because the markets, construction costs, capital market costs, everything that could go wrong, has been going wrong. But we’re going to get it done.”
According to the article, Mr Alibhai praised the Government and unions for making it more attractive to do business in Bermuda — to “come in, take the risk, and execute”.
Mr Alibhai added: “Coupled with our skill sets, we were able to make a real home run out of the Rosewood Tucker’s Point investment, which led us to take on the second big one — the Fairmont repositioning.
“It will make us the largest employer and owner of hotels in Bermuda, but most people would have shied away given the history.”
The article reported that Gencom has a portfolio of $7.5 billion in assets under management and that Mr Alibhai was a risk taker who had an eye for a deal.
He was quoted as saying: “When markets are choppy like this, where it's difficult to pin down values and potential, that’s usually a good market for us to get into projects.”
Mr Adwick went on to say that the ratio of tourism/residential units had been “rebalanced in favour of tourism units”.
He said: “Whereas in the original scheme 56 per cent of units were residential, in the revised scheme nearly two-thirds are proposed to be tourism units, the proposed reconfiguration of the development providing 159 tourism units and 91 residential units.”
But he acknowledged that the Department of Planning was not completely satisfied with the original SDO application, referring to “six points under separate subheadings which the department considered required further attention”.
He also made reference to the department’s “criticism of the original submission” concerning impact statements, and “your comments with respect to inconsistent and/or inadequate information”.
“Where necessary, information has been corrected or clarified,” he said.
In February, developers had stated that ground was expected to be broken in the second quarter of this year and be completed towards the end of 2024.
That timeline was later confirmed by David Burt, the Premier and Minister of Finance, who said: “The two critical timelines which all are working for is for the commencement of construction in the second quarter of this year and opening of the hotel in 2024.”
In his letter this week, Mr Adwick said that the hotel may not reopen until June 2025 but did not explain the reason for the timeline extension.
He added that construction work on the 159 tourism units would start in 2025 with a completion date of 2030. Work on the 91 residential units will not start until 2033 and will be carried out in three phases, with a completion date of 2040.
A Westend Properties spokeswoman last night confirmed that construction work was expected to start in September.
Mr Adwick said: “The applicant’s top priority is the completion of the hotel renovations, the construction of the beach club and upgrades to other associated facilities. A functioning hotel with a range of resort amenities is as essential to the success of the proposed tourism and residential development as those units are to the support of the hotel.
“It is now anticipated that the hotel renovation works will commence later this year with an expected hotel opening in Q2 2025.”
Claiming that all concerns had been “addressed in various ways” in the revised proposals, Mr Adwick concluded: “We believe that the revised package of proposals represents a much-improved project that has responded positively in many ways to the criticisms that the original proposals received.
“We also believe that the proposals will revitalise the Fairmont Southampton resort and transform it into a world-class facility that can boost Bermuda’s reputation as a desirable tourist destination.”
The Westend Properties spokeswoman added that the company’s decision to go back to the drawing board was largely driven by public discontent with the original plan.
“After receiving feedback from the public and through discussions with the Department of Planning, we determined that it was in everyone’s best interests to take our plans for the SDO submission back to the drawing board,” she said.
“Now, after considering the concerns that have been raised, our team has worked incredibly hard to revise the submission based on what we heard.
“We’ve had the opportunity to reconfigure the development so it can proceed while both meeting the requirements of our financiers and addressing the issues brought forward by the public. Over the next few days, we look forward to sharing greater detail on the amended submission.
“We are excited to get going on this project — and in particular, the renovation of the hotel. Our current renovation schedule projects contractor mobilisation will occur as early as September.”
Yesterday, The Royal Gazette e-mailed questions relating to the revised SDO for the attention of David Burt.
We also asked the Premier for his reaction to comments made by Gencom founder Karim Alibhai that “everything that could go wrong, has been going wrong” with the development.
Mr Burt did not respond to our questions by press time.
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