Dear Sir,

I am writing as I see a Gencom advertisement in favour of passing the second special development order for the Fairmont Southampton hotel development on the Royal Gazette website. Only four more acres, it says. Ask the Bermuda Environmental Sustainability Taskforce about that.

If our recent past teaches us anything, it should be that if the public have a hugely negative reaction to potential development, the developers should take notice and go back to the drawing board. In this case, 80 per cent responding to a Royal Gazette poll are against approving the SDO and more than 4,300 have signed a Change.org petition.

Perhaps the best example of a failure to read the room is Caroline Bay. I am a real estate agent and I remember the doubts I felt about the location of that project. It’s a long drive from the airport, and the beach is not in my opinion one of the nicest in Bermuda. Although there are wealthy Bermudians looking to downsize to luxury condos, location is everything in real estate and none were interested in that location. The condos were at a price point that is affordable only to the very wealthy, so they were left with no local market and never made it any further. It is now a depressing, abandoned construction site.

I believe many in Bermuda are experiencing the same kind of negative jolt I felt about Caroline Bay when they see the proposed plans for 261 units at the Fairmont Southampton. For context, there are fewer than 261 units — including houses, condos and commercial buildings — available for sale in Bermuda on Propertyskipper. So it’s a massive development.

Many have brought up that few would want to stay at a hotel that is so large a development. Construction is planned for the next 20 years. I certainly wouldn’t want to stay at a resort that is that massive and has ongoing construction.

To add insult to injury, Bermudians are being asked through a $75 million government guarantee and 15 years of tax concessions to partially fund this development, which many of us fear will be an eyesore. We lose more of the precious green space, and we pay to line the pockets of foreign developers. Bermuda won’t benefit from tax revenue from this project for 15 years. We are being forced into this when our government is highly in debt to the tune of $7 billion — if you count unfunded pension obligations.

We are being told that the hotel renovation will not happen without these overly generous tax concessions and a special SDO that forfeits land that is protected from development at present. At the same time, the developers have provided only one name from the investor group — Starwood Capital Group, a private equity firm with $120 billion under management. It boggles the mind that our tax dollars must be at risk in this deal when it has the backing of that calibre of investor. Perhaps it is only because much of the risk of the development has been offloaded to Bermuda taxpayers, making the rate of return higher for Gencom and its investment partners.

Besides Starwood, who are they? It is rumoured that non-disclosure agreements have been signed and we will not be told.

Real estate agents have been telling the Government for years that current policy regarding the sale of condominiums to foreigners unfairly penalises Bermudians by creating two classes of condominiums. Luxury condominiums that sell for $2.5 million or more give the owner the right to apply residential certificate via the Economic Investment Certificate scheme. However, condominiums that are still in the luxury market but fall below that number are not available to international purchasers because their buyers would not be eligible for a residential certificate, unless they are in a government-legislated tourist development.

The website for Bermudiana Beach Hotel states, “At certain vacation condo properties such as Bermudiana Beach Resort, owing to a specific government legislation, this licence fee [the fee for international buyers to buy a condo in Bermuda] is waived, creating significant savings for overseas buyers”.

I believe this is why the developers want so many units. They are going to massively add to a separate class of condos and take advantage of government policy to push through sales. There will be a sweetheart deal of no licence fee or reduced licence fees for international purchases to push through sales of the 261 condos.

Who loses? Bermudians, whose tax dollars are at risk while the return will go to foreign developers. That’s a bad deal for Bermudians. And, particularly, Bermudian condo owners. If the condo units do in fact sell, flooding the market, it will continue to be harder for Bermudian condo owners to sell their properties because they cannot sell to the international buyer or the work-permit holder.

Most importantly, Bermudians lose precious green space and the potential for a beautiful resort to help revive tourism.

SUSAN FRITH

Hamilton Parish