Good afternoon and thank you for joining us here at the Harmony Club in Paget where I am delighted to announce that the Bermuda Housing Corporation has entered into a purchase and sales agreement with the owners Bermuda Resort Hotels Ltd.

The Harmony Club is a small hotel formerly operated by Bermuda Resort Hotels and I acknowledge the presence here today of one of the principals, CEO Mr. Naval Mehra. Also present is Mr. Wendell Hollis, Director and Mr. William Griffith, President of Bermuda Resort Hotels. The Harmony Club closed early in 2006 amid plans for redevelopment.

In the intervening two years, the owners of the property have flirted with tourism redevelopment, outright sale, a branded partnership style tourism development and other means of realising the potential of the site. Those efforts did not succeed primarily as a result of the current difficult credit market environment in the United States. They have therefore determined that this sale provides a great opportunity to proceed with plans of redeveloping their other properties, particularly Surf Side Beach Hotel.

When looking for suitable housing options the Ministry approached the principals of Harmony in late 2007 about the possible sale of the property and preliminary discussions were held. Over the intervening months those conversations continued until early April when the owners indicated a willingness to entertain an offer from Government. As part of our due diligence a chartered valuation surveyor, on behalf of the Bermuda Housing Corporation, conducted an appraisal of the property.

The principal mandate of the Bermuda Housing Corporation is to provide affordable housing for Bermudians. In fulfilling that mandate more creative means are required in light of market conditions, lessening developable space and the costs of construction. The purchase of this property provides a number of opportunities to address our housing challenges in key areas.

The Management Team of the BHC, represented today by the General Manager, Major Glenn Brangman have been in discussions with various ministries but particularly Departments within this Ministry regarding their housing needs as they seek to recruit both locally and overseas. The Bermuda Police Service, the Department of Corrections, the Bermuda Regiment and the Ministry of Health were departments identified with the greatest and most pressing needs.

In the majority of these cases, those recruited will be single professionals whose preference will be the rental of a studio or one-bedroom apartment. Market conditions dictate that left in direct competition with Bermudians in this critical sector of the rental market, these professionals’ ability to guarantee payment make them preferable to landlords. The effect of this unchecked and inequitable competition is to drive the cost of single-person rental units further out of the affordable range of the average Bermudian. As such an alternative solution needed to be found.

It was therefore proposed that following Cabinet approval and necessary remedial works the property be made available to the Bermuda Police Service in the first instance and to those other departments listed above to house those professionals presently being recruited. This absolves us from funding market rates in the private sector, paying per night rates at local hotels for extended periods, or purchasing houses to accommodate much needed staff. Concurrently, the rental market is eased in favour of those Bermudians seeking units in this category.

Everyone knows that we are recruiting police officers from overseas – and no we have not been dragging our feet – oftentimes in governing you must remain silent for a time and work – so that when one does speak – you have something significant to say. One of the major potential obstacles to the recruitment process was housing and we set about devising a solution that would meet the deadlines set by the Bermuda Police Service. This solution solves that potential problem and recruitment is proceeding as planned. More on that at another occasion.

An assessment of the property indicates that, several of the units can be made ready in a short space of time with the remainder being brought into use in phases. The initial plan is to renovate the forty units, in three buildings at the rear of the property and bring them online in short order.

I draw your attention that the proposed use of the property, as set out above is the immediate proposal. The footprint of the site, along with its potential for further development, makes its acquisition a critical means by which the Housing Ministry can continue to meet its mandate in the future.

I must acknowledge the support of my Cabinet colleagues in general and that of the Honourable Premier and Minister of Tourism and Transport in particular – whose support was vital in transferring this property from the tourism inventory. And of course the Minister of the Environment and Sports for agreeing to the rezoning.

May I conclude by thanking the Board of Directors, management and staff of the Bermuda Housing Corporation for always ‘stepping up to the plate’ to deliver on our mandate of providing affordable housing to the people of Bermuda. And likewise to Bermuda Resort Hotels for their willingness to partner with Government.

Thank you.

PRESS STATEMENT
by
Senator, the Honourable Lieutenant Colonel David A. Burch, OBE, ED, JP,
Minister of Labour, Home Affairs and Housing
Purchase of the Harmony Club
Thursday, 29th May 2008