A Government appointed inspector will assess the financial status of the company that owns a troubled east-end timeshare complex.

And sale of the St. George's Club to Great Vacations resorts -- or any other buyer -- is conditional upon Government approval, announced Tourism Minister David Dodwell yesterday.

Mr. Dodwell revealed the news following meetings between his Department, the Ministries of Finance and Works and Engineering, the club's Members Advisory Council (MAC), the club's developing owner Alistair Woolf and his audit firm of Deloitte and Touche.

It was concluded that the special assessment notice sent out in May by Mr.

Woolf was premature because prior approval from Mr. Dodwell had not been sought.

"To that end, the developing owner has subsequently made a formal application to charge a special assessment,'' said Mr. Dodwell.

In order for an informed decision to be made on the assessment "Government has appointed an inspector to assess the financial status of the company that owns the St. George's Club'', he continued.

That company is Real Estate Development Co. and the firm appointed to carry out the audit has had no connection with the club for the past seven years, added Mr. Dodwell.

The St. George's Club has been struggling since 1991 under a burden of mounting operating losses, accumulating a projected deficit of $2.9 million.

Meanwhile the operations side of the timeshare is expected to lose over $820,000 this year.

In the newsletter Mr. Woolf said Real Estate Development Co. voluntarily advanced about $1.1 million to the timeshare's operations to cover the cash flow needs over the past few years.

Mr. Woolf told timeshare owners that in order to remediate the "cash-flow crisis'' they would have to ante-up on an extra "assessment'' fee this year to meet the current total operating deficit.

He also proposed the members' annual maintenance fee would have to be hiked by around 55 percent.

But timeshare owners opposed the increases. One owner told The Royal Gazette that when he bought into the timeshare operation three years ago Mr. Woolf informed him there would be no fee increases.

He also claimed that when he first bought into the Club details about the operating deficit were not revealed to him.

Members maintenance fees and other income are meant to cover the timeshare's operation budget while the company is responsible for development, sales and marketing.

"Once the inspection, which commenced on June 21, has been completed, and Government is in receipt of the inspector's report, the Minister will review the application for a special assessment in light of the findings of the report,'' said Mr. Dodwell.

This decision will be passed on to club members by the MAC.

The Minister said agreement was reached by the MAC and Mr. Woolf on a variety of other issues as well, including sale of the property.

Mr. Woolf told members he was in the process of negotiating selling the Club to US-timeshare developer Great Vacations Resorts.

But Mr. Woolf and representatives of Great Vacations Resorts will be required to submit a proposal to Government, said Mr. Dodwell.

And he added: "The approval process is not one that happens overnight as Government must be satisfied that the sale is in the best interests of the timeshare club members, the developing owner, and of course, Bermuda as a whole.'' TOURISM TOU