Richards: I would do it all over again
Bob Richards, the former Minister of Finance, stands by the administration’s $165 million guarantee on the Morgan’s Point development.
“If I had to do it all over again, I would do it,” Mr Richards said yesterday of the decision, which was formally signed in March 2016.
Mr Richards countered finance minister Curtis Dickinson’s charge that the One Bermuda Alliance committed the public purse to a development already mired in financial difficulty.
“Nobody came to me as minister to say the project was in trouble, that the loans Arch and Axis made were not being serviced, that they were defaulting,” he said yesterday.
Instead, Mr Richards criticised the Progressive Labour Party for opting to raise the country’s debt ceiling instead of putting aside funds earlier to cover the guarantee. Mr Richards’s comments were echoed by Craig Cannonier, the Leader of the Opposition, who called Mr Dickinson “disingenuous”.
Mr Cannonier added: “That project put hundreds of Bermudians back to work. What has his government done?
“Let’s remember, that’s a project the PLP put in place. We were the ones to incentivise it and get it moving.”
Mr Richards, who lost his parliamentary seat in the July 2017 General Election, described a bleak economic scenario for the OBA administration, which took power in December 2012 searching for projects to stimulate the economy.
He insisted that “context is everything” and added: “The traditional way to get a country out of recession involves the Government borrowing money and creating projects.
“We could not do that because the Government was already in huge debt and running deficits that automatically put us in more debt.”
Pollution at Morgan’s Point from its days as a military base meant “we had inherited an unworkable arrangement”, as the Government had to spend about $35 million to clean up contaminated land.
“The principals got land they could use, but because it was a brownfield site, there was no way any investor was going to put a penny in without a government guarantee.”
Mr Richards was unfazed at the scale of the guarantee. He said $165 million was “not much” and that a full development of the site with a hotel, marina and residences could have been worth $2 to $3 billion.
Asked if he felt he had been gambling, Mr Richards said: “There’s risk in everything. We felt it was an investment in Bermuda’s future.”
He explained: “Look at the alternatives. If we were sitting pretty with a stable economy and a normal tourism industry, that step would have been imprudent. I agree. But that was not the case. We had a situation where we were mandated to try and get things moving.”
Mr Richards added that he could not say whether developers had overstated their hand when it came to financing.
But he speculated that, in the rush to complete its marina in time for the 2017 America’s Cup, developers may have “diverted money from the hotel”.
A request for comment on Mr Richards’s suggestion was sent last night to a spokesman for the developers.
Mr Richards said superyachts attracted to the regatta might have led to easy sales of luxury condos, but “most were in Dockyard and in town” when the races arrived.
“They got themselves in a spot of bother,” he added.
Mr Dickinson stated yesterday that the PLP government, after seven months in office, was informed in February 2018 of “significant financing issues”.
Mr Richards said: “They did nothing. That’s not prudent management. And they kept spending anyway. That’s not on Bob Richards; that’s on the current government.”
He said the Government should have set funds aside over the two subsequent Budgets “in case they had to make good on the guarantee”.
Mr Richards also said he suspected the minister of intending to “pull the plug” on the project. Mr Dickinson responded last night that the former minister was “incorrect”.
Mr Richards added: “The only real way this project can be brought to a conclusion is if Caroline Bay is finished and opened to the public, with guests spending money and the Government getting taxes.
“How are we going to get that $165 million, plus $35 million spent on remediation, how are we going to make that $200 million not a waste of money?”
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