A stalled hotel development at the West End needs a major rethink, the Minister of Finance warned yesterday.

Curtis Dickinson told the House of Assembly that the Caroline Bay project, at Morgan’s Point in Southampton, had to be “recast and devised with a realistic view”.

But the developers, Caroline Bay Limited, declined to comment on the plans for the resort last night. A contractor for the project at the former US Navy base said construction firms had still not been paid for work on the site.

Mr Dickinson told MPs that the project hit problems even before the completion of its marina for the 2017 America’s Cup.

He said the public had been kept in the dark about the project, despite optimistic announcements by the developers.

Mr Dickinson added: “This had to have been known to the then Cabinet and the developers who persisted in providing public updates on the project which were inaccurate.”

He said Morgan’s Point “continues to represent an important opportunity for Bermuda to renew its claim to being a luxury destination”.

He added: “The economics of the development must be recast and devised with a realistic view of the world economy and the value proposition we need to present in order to be successful in tourism, business and economic diversification.”

Mr Dickinson said the opportunity to develop the brownfield site was “too important to squander”.

But he added: “We do not do justice to the people of Bermuda by continuing to shore up a vision that no longer matches reality and which cannot be sustained on any applicable metrics. It is well past time to approach this development differently.”

The minister said that the former One Bermuda Alliance government, along with the developers, had sought to renegotiate the terms of its financial agreement as long ago as 2013.

He added the Caroline Bay Marina was completed in time for the 2017 America’s Cup races. Mr Dickinson said the marina’s inclusion as part of the first phase of the development meant the rest of the project then consisted of 35 branded condominium residences and a five-star 79-room Ritz Reserve hotel.

He added: “What the people of Bermuda did not know was that even before the marina had opened, the Caroline Bay project was experiencing difficulty.

“This had to have been known to the then Cabinet and the developers who persisted in providing public updates on the project which were inaccurate.”

Mr Dickinson said developers has asked in early 2018 “to meet with the then Premier and Minister of Finance to advise that there were significant funding issues and that in all likelihood work would slow down and eventually cease without an injection of capital”.

Caroline Bay Limited announced last month that it had “entered into an agreement” to secure financing.

Mr Dickinson said any offer had to comply with regulatory requirements and get “the approval of the Government of Bermuda who, through the terms of the guarantee, is a full partner at the table in matters related to the financing of this development”.

He added that a term sheet or draft terms of agreement “do not represent irrevocable funding and should not be termed as such”.

Mr Dickinson highlighted that much of the lending for the construction of the development was “founded, unfortunately, in a Government of Bermuda guarantee to the tune of $165 million”.

He said that reports that work had stopped at the site and that contractors and subcontractors had not been paid were “disturbing”, although that was not a government responsibility.

Mr Dickinson added that the Government would support developments that provided investment opportunities for Bermudians, employment, growth for small and medium-sized businesses and “an increase in economic activity arising out of a sensible, fair immigration policy”.

He added: “Where these ideals are embraced by developers, existing or prospective, we are open to working together.”

• To view the ministerial statement in full, click on the PDF link under “Related Media”