More questions than answers on hotel redevelopment

Fiona McWhirter

Created: Oct 11, 2021 07:54 AM

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Finance minister Curtis Dickinson (left) with David Burt, the Premier (File photograph by Akil Simmons)

Fairmont Southampton (Photograph by Blaire Simmons)

Talks about the redevelopment of the Fairmont Southampton continued in the Government last week, a spokeswoman has confirmed.

But officials did not answer a series of questions about problems that have dogged the redevelopment.

A government spokeswoman said: “The Government continues to discuss the redevelopment of the hotel site and it would prejudice those discussions to comment on historic matters from a year ago.

“The focus of the Government is on achieving a redeveloped site to further the growth of the economy and a return of this important property to the tourism stock.”

The statement came in reply to several questions asked by The Royal Gazette in connection with e-mails released after a public access to information request.

The Gazette highlighted a request made in June last by Karim Alibhai, the founder and principal of Gencom, to extend the timeframe for a layoff to become a redundancy from four months to 12.

The Government was asked: “What was the Government’s response to that? Was the request considered? To what end?”

The Gazette also asked: “What do the Premier and Minister of Finance say to the allegation by Mr Alibhai on August 9, 2020 that there appeared to be a “lack of urgency” on the Government’s part to help resolve the financing problems at the Fairmont Southampton?

“Is it these concerns that eventually led to the letter of intent, which ultimately expired on December 31, 2020?

“In addition, what do they say to Mr Alibhai’s concerns that the Fairmont Southampton redevelopment project was compared to the Morgan’s Point project?

“Does the Government see similarities between the two?”

The Gazette quoted an e-mail from October last year in which Mr Alibhai said “it was our collective understanding that the Government had agreed to fund 50 per cent of the total redundancy amount” due to the 750+ Fairmont Southampton workers, with the rest to come from Westend Properties“.

We asked: “Was that an option considered at the time? Was it expected that the 50 per cent funding would be repaid by Gencom/Westend?

“Why would the Government agree to paying 50 per cent of the redundancy payments?

“Or, if there was no agreement, why was that Mr Alibhai’s understanding?”

The Gazette asked: “What was contained in the memorandum of understanding drafted and shared by the Minister of Finance on October 14, 2020?

"What decision was reached by the Government/Ministry of Finance after the request by Gencom to provide a guarantee in support of the Fairmont Southampton redevelopment – as outlined here?

“If any decision to provide a guarantee has been made, what is the value and what are the terms?

“What is the Premier and Minister responsible for Tourism’s latest information on when redevelopment works will be completed at the Fairmont Southampton, and when the hotel will reopen?”

Government and Gencom vow to work together

David Burt, the Premier, sent “a note of thanks” to Karim Alibhai, the founder and principal of Gencom, and Chris Maybury, who represented the company, on June 18, 2020.

He said that the pair showed confidence in a plan to reopen Bermuda.

The note was written after the coronavirus pandemic hit the island and two weeks before the airport reopened.

Mr Burt added that Zane DeSilva, then the tourism minister, had worked “diligently … and it was wonderful when he shared it”.

The Premier added: “We will keep working together to make a success of the next few years; they will be difficult, but I am more determined than ever to ensure success for Bermuda and our tourism economy.”

Mr Maybury, a long-time resident, replied: “Thank you so much Premier.

“Minister DeSilva has put in some hard yards for Bermuda this week.

“In my comments yesterday I mentioned our partnership with your administration.

“That is how we feel.

“It does not mean we will always agree, but it goes [sic] mean we will work it out in the end.”

Mr Alibhai said that “we are still very bullish on Bermuda and investing over the long term”.

He added: “We are pleased that we are able to mutually support each other in these very ʽunusual times’.

“As mentioned, we will need to all work closely together to be successful (especially given the severe challenges that the Fairmont will continue to face).”

Questions sent to Gencom included a request for information about the Fairmont Southampton redevelopment project, such as what work had been completed so far, if financing for the entire redevelopment had been secured and when the hotel is expected to reopen.

The Gazette asked why an extension to the layoff window was needed and for details about an agreement that was understood by Mr Alibhai to have been reached, in which the Bermuda Government would “fund 50 per cent of the total redundancy amount” due to Fairmont Southampton workers.

Gencom was asked whether a prediction turned out to be accurate that more than $30 million would be lost across Rosewood Bermuda and the Fairmont Southampton by March 31, 2021.

The company was also asked if any guarantee was provided by the Government in support of the Fairmont Southampton redevelopment.

No response from Gencom was received by press time.

The Gazette’s public access to information request was submitted in January 2021.

It asked for records of correspondence to and from the Premier in relation to Gencom and its subsidiaries.

The scope of the request was later narrowed to March 1, 2020 to March 1, 2021.

A response was received on September 21. The e-mails covered from March 25, 2020 to October 16 this year. A request has been made for internal review.

* To read the e-mails, click on the PDF under “Related Media”. The Royal Gazette has redacted contact details contained within.