Bermudiana hotel site was on its way to Government House last night after being passed in the Senate.

Meanwhile the Bermuda Financial Centre Ltd. -- which opposes the deal -- revealed that it had received verbal confirmation of financial backing worth $125 million.

The Bermudiana Site Rehabilitation Act 1997 allows ACE Ltd. and Exel Ltd. to bypass the 60/40 ownership rule -- which requires that 60 percent of a company be Bermudian-owned -- and take over the Hamilton site off Pitts Bay Road where they plan to build offices.

BFCL wanted to develop the property for offices, shops, condominiums and a hotel but struggled over the past three years to raise the necessary funds.

Senators yesterday agreed BFCL had been given enough time to come up with financial backing for its plan.

Opposition Sen. Terry Lister said he thought BFCL could have raised the funds in time, but it had seemed to have run out on them.

It would have been nice to have had a hotel on the site, he continued, but ACE and Exel were not offering one in their deal and it was time to move forward.

BFCL gets financial backing as bill passed Independent Sen. Alf Oughton revealed he had heard BFCL had the possibility of being financed as they had established good financial contacts but it would also be a 100 percent foreign financing package.

However he added that BFCL no longer had any official ownership of the Bermudiana site as it had been taken over by Argus Insurance through Winson Holdings after they were unable to pay loans.

ACE Ltd. and Exel Ltd. had agreed to buy the property from Argus if the bill passed and planning permission was given.

But BFCL president Neville Conyers said last night that Boston-based investment banker Robert Downing had verbally confirmed 100 percent financing for the BFCL project.

Mr. Downing was due to arrive on the Island yesterday from New York but was involved in a car accident which delayed him. He is now set to arrive at lunch-time today.

Mr. Conyers said he was arranging meetings with Government and ACE and Exel in the hope they could work out a compromise to get BFCL's original scheme off the ground.

He added that despite the passage of the bill in the Senate, the ACE/Exel proposal still had to go through the planning process which could pose a stumbling block.

A similar proposal to set up office blocks at the site by A.F. Smith had been turned down, noted Mr. Conyers.

The bill did not receive the debate-free 42-second treatment it encountered in the House of Assembly as Senators spent two-and-a-half hours discussing it.

The bill was introduced for its second reading by UBP Sen. Lawrence Scott shortly after noon.

By approximately 4.20 p.m. the bill had passed its third reading and was due to be sent to Governor Lord Waddington for Royal Assent.

Senators from both sides of the chamber agreed throughout the debate that the Bermudiana was a derelict eyesore which needed to go before it sent out any more bad messages about Bermuda.

Government Senator Noela Haycock called the site a breeding ground for "termites, rats, winos and druggies'' located smack in the middle of the Island's prosperous capital.

ACE Ltd. and Exel Ltd. were felt to be good corporate citizens by Senators who recognised their wish to purchase the site as demonstrating their interest to commit to Bermuda.

Sen. Oughton noted that their establishment of a corporate headquarters on the Island meant they were less likely to "fly the coop''.

Sen. Lister said one way the companies contributd to the community was through their employment of almost 200 Bermudians in "high quality jobs'' including management positions.

These employees could also go overseas within the company which would inevitably benefit Bermuda, he added.

And the pair's plans to phase development of the site was also approved of by Senators as it would provide business for local construction companies for an extended period of time.

Senator Neletha Butterfield said she hoped small businesses would get a share of the construction pie, once that phase of the project was underway.

The fact that this development would also leave open spaces in the City of Hamilton's centre was also smiled upon.

And Senators addressed the concern that a precedent was being set.

It was noted that the 60/40 rule had been waived in the past for other companies including American International, Shell and Bacardi International.

This was done when it was felt to be in Bermuda's best economic interest, pointed out Government Senate Leader Lynda Milligan-Whyte.

It would not open the floodgates, she continued, as the 60/40 rule which had served Bermuda in good stead would remain in place.

Independent Sen. Walwyn Hughes noted it was a new experience for him to see both sides strongly supporting a bill brought before the Senate.

But he stressed that it was good to see the bill being debated. He said he would hate to see the situation arise where private bills became a means of avoiding debate.