Legislation to create a government-owned company to oversee the redevelopment of the failed Morgan’s Point hotel property was passed in the House of Assembly.

The Morgan’s Point Company will have the power to hold the land, buy more of the Morgan’s Point property and to find a new developer for it.

David Burt, the Premier and finance minister, said on Friday that the failure of the proposed Caroline Bay resort meant the Government had to exercise the $165 million guarantee the previous One Bermuda Alliance government had issued.

Mr Burt said the Government had been forced to spend $211 million on the property to date, most of it borrowed, and had spent a further $7.7 million dollars a year in interest.

He said: “The history of the Morgan’s Point site is well known. Honourable members will recall that a previously little-known expanse of privately owned land in Warwick called Southlands became a rallying point for local conservation when three Bermudians purchased it and outlined plans to transform that site into a hotel.

“In April 2011 the land at Southlands was swapped for land at Morgan’s Point. That agreement set out the terms and conditions of the swap and was discussed in this Honourable House as part of an Act of the Legislature to enshrine the permissions and rights over the land to the benefit of the developers.

“At that time the proposed development at Morgan’s Point included an 80-room boutique hotel with 313 additional residences, and a 325-room luxury hotel with 337 additional residences.

“It is unfortunate that the financial viability of this project had been in question for at least the last six years of its operation.”

Work on the Sandys site ended in 2018 after the original developers ran out of financing for the project, leaving the Government to bear the brunt of a $165 million guarantee – which was arranged by the former One Bermuda Alliance Government.

The Act gives the Morgan’s Point Company Limited authority to acquire, hold, develop, lease, sell, manage or oversee the management of the land at Morgan’s Point. Members of the company are to be Mr Burt, as Minister of Finance, and the Minister of Public Works, currently David Burch.

In response, Cole Simons, the leader of the opposition One Bermuda Alliance, defended his party’s role in the debacle.

He said: “We have taken the rap for this development for years.”

He said the Southlands development had progressed without any problems until the then-PLP government gave in to pressure from environmentalists and persuaded the company to agree to a land swap, exchanging their south shore site for 37 acres at Morgan’s Point.

Mr Simons said: “The PLP placed obstacles in front of the developers and these are the cause of the problems we have today.”

That accusation prompted outrage from several government backbenchers, including Lawrence Scott and Kim Swan.

Anthony Richardson, PLP MP for Hamilton South, said that the Government was turning the troubled development into an opportunity for development.

He said: “At the end of the day, we’re all here to debate a Bill to set up a company, similar to other companies, which do similar things, that can bring about a reasonable development of the land.”

Scott Pearman, the OBA’s spokesman on legal affairs, asked why the Act applied to all 229 acres at Morgan’s Point, rather than just the 37 acres that had been granted to the developers.

Walter Roban, the Minister for Home Affairs, replied that it was “a standard provision” that would give the company the ability to buy up parcels of land in the future when they became available.

He added that the company could not take any commercial action without the approval of the legislature.