Bermuda Real has learned that only three out the 14 new multi-million dollar condominiums at Morgan’s Point have been sold to date.
When the money pool from the sale of three out of 14 condos dried up, developers decided to pull the plug on the proposed 79 suite hotel, which is the second phase of the new development.
Until all of the condo units have been sold, we’re told that work on the hotel could not continue.
Of the 14 condos, five are up with the finishing touches yet to be completed. Three four-bedroom units have been sold to date, the rest have yet to be sold.
The condos surrounding the plush marina go for more than $2 million a piece.
With three sold and the rest still on the market, our sources said: “Those condos need to be sold to generate funds to build the hotel.”
To date, that hasn’t happened.
Bermuda Real also understands that the 150 workers laid off yesterday, work for Michael MacLean, David Durham and Dennis Correia.
Meanwhile, Craig Christensen and Nelson Hunt have quit George’s Bay Limited’s board, which is an offshoot of Morgan’s Point Ltd.
They have been replaced by the Chief Investment Officer of the Bermuda Tourism Authority (BTA) and Nancy Duperreault, wife of Brian Duperreault, as directors.
And Government is now in talks with the developers on the need for more cash to finance the new development.
Premier and Minister of Finance David Burt said: “This project is an important one for Bermuda and the Government’s principle objective is to protect the taxpayers of this country in light of the existing Government Loan Guarantee of $165 million.
“We now understand that George’s Bay Ltd have experienced difficulties with certain requirements of the loan guarantee agreement since June 2017 and so some restructuring of the Board and the approach to this project was suggested and changes have been made to the Board of St George’s Ltd.”
He also noted that the appointment of Mr Burrows would “ensure the Government’s interests are safeguarded during this critical phase”.
Workers downed tools yesterday when they were told that the hotel construction phase was put on hold “until further notice”.
Construction will continue on residential units being built at the former US Naval Annex in Southampton.
The hotel plans include 79 suites, two of them presidential suites to be operated by the Ritz-Carlton Reserve brand.
In a statement released yesterday, Minister of Tourism and Economic Development, Jamahl Simmons, “emphasized that the Government was working hard to ensure that work continued on the site and that investor confidence was maintained in the project and Bermuda”.
“This is a location of great promise and we believe that a formula can be identified quickly to resume the pace of work on the development,” he said.
“I wish to thank Marriott who remain committed to the Ritz brand as a partner for this project.
“Ultimately, Bermuda’s product offering will be enhanced by this development’s completion and our discussions with the company are targeted on achieving this result,” he added.
Premier Burt concluded: “There is a significant human element to our discussions also and that surrounds the hardworking men and women whose hours may have been cut or employment jeopardized by this reduced work stream.
“As a Government, we will keep their livelihoods at the forefront of our discussions and we will do all that we can to minimize the impact of this necessary action on them and by extension their families.
“With a restructured Board and more direct Government coordination we will maintain strict oversight of the management of this project as the new leadership team strengthens and extends the project’s financing.”
A spokesman for George’s Bay Limited said they are “working to strengthen and extend the project financing so that construction can resume as soon as feasible”.
The company is “committed to resuming the prior pace of first-phase construction once the necessary financing is in place”, he added.
“The resort and residential project owner look forward to the successful completion of this unique Bermudian destination resort and residential project at Caroline Bay.”
On that note he said: “George’s Bay Limited appreciates the engagement and ongoing support of the Government of Bermuda in this process.”