Taxpayer-funded financial breaks for the $376 million Fairmont Southampton refurbishment have set a “bad precedent” for the Elbow Beach resort as its owners seek a new buyer, a shadow minister believes.

The people who control the landmark Paget complex are in talks with a potential developer, as revealed by The Royal Gazette.

But, Craig Cannonier, the Shadow Minister of Tourism, said that while he wanted the hotel to be operational again, he has concerned taxpayers could be in for a sharp ride.

“We were aware someone was interested in Elbow Beach. I do not believe they were looking for concessions before the Fairmont Southampton deal.

“Anybody coming down the line is now going to be interested in new concessions. As we said with that deal, it created a bad precedent, which will impact on Bermudians.

“The Fairmont Southampton deal has now set a precedent. People will now say, ‘hey, you’re obliged to give these concessions’.”

The emergence of the coronavirus pandemic dealt a blow to Elbow Beach, a Saudi Arabian owned hotel, which closed in March 2020, making all staff redundant.

There had been expectations it would reopen its doors by 2021.

An Elbow Beach Hotel spokesperson previously told The Royal Gazette: “We are in discussions with a potential buyer and are not providing any further comments at this time.”

Vance Campbell, the Minister of Tourism, said talk of a deal was positive to stop the resort “just sitting there”.

Parliament approved tax concessions for the Fairmont Southampton in May valued at between $121 million and $133 million over 15 years to site owners Gencom.

The Government also gave a guarantee of $75 million, representing 21 per cent of the revised costs of the project.

The move was strongly criticised by former finance minister Curtis Dickinson, who walked out of the Cabinet in February after clashing with David Burt, the Premier, over the deal.

The PLP MP told the House of Assembly that the Government was “flying blind” over the real costs of the Fairmont Southampton situation and being “too generous” to developers Gencom.

The ex-finance minister also said there was a risk that other developers could approach the Government for retroactive relief because of the Fairmont deal and the precedent it had created.

The Lido Complex on the Elbow Beach hotel property reopened in March after being closed during the winter months for renovations.