Financing for renovations at the Fairmont Southampton has closed, Westend Properties announced yesterday.

Alessandro Colantonio, the chief investment officer at Gencom, Westend’s managing partner, said: “While we have had the financing commitments to fully fund this redevelopment in place for some time, it has been a complex process to finalise all the necessary documentation with the various parties to the transaction.

“Late last year we stated that the project was fully funded and that we were progressing to closing. We are so pleased to share that the closing date is today.

“We have completed the required documentation to close the financing and the balance of funds have been remitted for this redevelopment.”

The hotel and beach resort was closed in 2020 during the Covid-19 pandemic, but plans to restore the resort with extensive renovations were later put forward.

In May 2022, legislators approved the Fairmont Southampton Hotel Act 2022, which was estimated to deliver tax concessions of between $121 million and $133 million over 15 years.

MPs heard then that the Government would give a guarantee of up to $75 million, representing 21 per cent of the redevelopment project estimated cost at that time, which was $376 million.

The Act was seen as a key step in healing Bermuda’s tourism economy after it was battered during the Covid-19 pandemic.

Yesterday’s statement said that capitalisation for the entire project was expected to be more than $550 million.

Building for the project will now enter its next phase, which will see about 75 shipping containers with building materials and construction equipment reach Bermuda by mid-October.

The hotel will be completely covered in scaffolding and prepared for further renovation by November.

A spokeswoman for Gencom said that at least 200 construction-related positions will be made available for Bermudian workers, with employment advertisements expected to be released this month.

BCM Construction, Performance Construction and Frazee Construction have been contracted to spearhead renovations.

Clarien Bank and Starwood Property Trust were described as key lenders to the renovation project.

Lotus Capital Partners, led by Faisal Ashraf, also acted as a capital markets adviser to Gencom.

Mr Colantonio said: “We are thrilled to be working with high-calibre, blue-chip partners on this venture.

“As we continue to forge ahead, the public will see very real evidence of this progress in the coming weeks.”

Simon Van de Weg, the chief banking officer of Clarien Bank, added: "Clarien is proud to play a pivotal role in the financing of this transformative project, which will revitalise one of Bermuda’s most iconic resorts and strengthen the island’s position as a premier destination.

“This underscores our commitment to supporting the growth of Bermuda’s economy through innovative financial solutions that meet the evolving needs of the Bermuda market."

The update said that construction on the Fairmont Southampton’s beach club is expected to be finished by autumn next year, while the hotel is planned to fully reopen by spring 2026.

Earlier, the business said that the renovation project would start construction last September and open its doors by 2025.

Karim Alibhai, the founder and principal of Gencom, said the company was “thrilled” to have reached the crucial milestone.

He said: “This has been an incredibly complex transaction, with the involvement of the Government and multiple lenders.

“But this is where Gencom excels — we are visionaries and dedicated creators of destinations.”

Mr Alibhai added: “Our team successfully navigated the challenges we’ve faced and we remain unwavering in our commitment, both to this project and to the people of Bermuda.

“We are so grateful to everyone who was involved in this achievement and especially want to thank Premier Burt and the Government for their unwavering support and belief in this project.

“We can’t wait to reopen the Fairmont Southampton and welcome everyone back to this world-class destination resort.”

The Premier, David Burt, told MPs in February 2022 that a deal was imminent, but it faced delays after the sudden resignation of Curtis Dickinson as finance minister. Mr Dickinson refuted the Premier’s claim that a deal was imminent and the suggestion that his resignation caused delays.

In March 2022, Mr Dickinson explained that while he supported a level of financial support for the project, “the quantum of and form of the Government’s support” were the main reasons he resigned.

Mr Burt eventually told Progressive Labour Party delegates during an internal fight for power in October that year that a deal had been reached.

A special development order to set up residential and tourism units was granted in 2009, but in February 2023 a request was made by Westend Properties to double number of the units to 261.

Environmental groups pushed back against the scale of development, and a petition of more than 4,000 signatures in opposition to the extent of the project was delivered to the Government.

Westend later submitted a revised application requesting a maximum of 250 units, for which the Minister of Home Affairs announced his approval last October.

A government comment in yesterday’s statement said: “This is exciting news and represents a resounding vote of confidence in Bermuda and the potential of our tourism industry.

“The Government of Bermuda has maintained that the redevelopment of this site is critical for the continued growth of this economy.

“Bermudian employment opportunities at every stage are key to our determination to play our part in delivering this project.

“We look forward to work starting in earnest and for this redeveloped hotel becoming the demonstration of a tourism renaissance in Bermuda."

Chris Furbert, the president of the Bermuda Industrial Union, welcomed the project as a boost for Bermudian employment.

He said: “This next chapter in the renovation of the Fairmont Southampton is so important — not just for BIU members, but also for Bermuda’s position as a premier tourist destination.

“We are all looking forward to working together to bring this project to fruition.”

Owen Darrell, the Minister for Tourism, Culture and Sport, echoed Mr Furbert’s comments, calling it a “seismic boost for tourism”.

He added: “Today’s news sets the stage for inevitable growth in our tourism industry and will open doors to the increased airlift we need.

“I look forward to the commencement of the work at the site and the employment opportunities this will provide to Bermudians who can look forward to careers in this critical industry.”

• To see the statement in full, see Related Media

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