Letter to the Editor
The Royal Gazette
January 17, 2017
I have to set the record straight after an opinion piece published Friday January 13th by Christopher Famous regarding the cost of the Cross Island project.
The article is thin on facts, inaccurate and misleading.
The reality is that WEDCo was pursuing the land reclamation project long before Bermuda was contemplated as the America’s Cup venue. The original concept was to create between six (6) and eight (8) acres of land for a mixed use development, including marina, working boatyard and home for the Department of Marine & Ports Services. The reclamation design had gone through a number of variations which included an 11-acre proposition. This was unrelated to the needs of the America’s Cup Village.
When Bermuda was successful in its bid to host AC35, it was agreed that the proposed infill at Cross Island would be an excellent site for the America’s Cup village and the project was expedited so the first use of the site would be for the America’s Cup, and only as interim use.
The planning process included a recognition of concerns relating to environmental impact assessment and wind and wave studies, including the potential future impact from sea level rise and storm surge. This resulted in a number of significant changes to the original scope which, amongst other things, included raising the infill several feet, requiring significantly more fill materials than originally scoped. This and other factors altered the cost projections on the initial scope.
It should also be noted that the project includes a number of additional elements beyond the land reclamation, including the construction of a new bridge, the approach causeway, site infrastructure, design and engineering costs, etc. The actual cost of the land reclamation itself is approximately $23 million.
Rather than increase the cost of the project, it was agreed instead, to work to a fixed total budget and maximize the project build to what the budget would allow, hence the current 9-acre design.
WEDCo believes that this additional land presents a significant opportunity for Bermuda. This opportunity will endure into the future giving Bermuda approximately nine (9) acres of land that simply did not exist before this project. To compare the price per acre of reclaimed land to existing land is invalid and misleading. This new reclaimed land adds real estate to Bermuda’s finite and limited land mass.
Financing for the project has been achieved through a loan to WEDCo from Butterfield Bank. It is supported by a backstop guarantee from the Government of Bermuda. All repayment obligations are current.
The long term use of the land will be contingent on financial models that evidence a suitable return on the investment to WEDCo, allowing it to repay the loan.
Current expenditure on the overall project is approximately $38 million and we are confident that the project scope will be completed within the budget of $39 million. The stakeholders in the design and build process, managed by ACBDA, have been steadfast in their commitment to deliver the project within budget.
WEDCo has worked closely with various stakeholders on the project, indeed we are grateful to the ACBDA project team which has managed the project. The ACBDA is now involved in installing various elements that are focused on the America’s Cup Village and once this work has been completed, the America’s Cup Event Authority (ACEA), responsible for the event itself, will begin the build out of the America’s Cup Village, at their cost and outside the scope of the land reclamation project. Bermuda residents will soon see the various buildings - and team bases that will make up the village - emerge.
While we contemplate that this initial use is for AC 35, there is a possibility that AC 36 could be located in Bermuda and there is provision for this within the agreement between WEDCo and the ACBDA. All of the America’s Cup Village infrastructure will be removed at the end of the America’s Cup events, leaving this land to be utilized by Bermuda for the future.
Specific to the end use for the land, WEDCO is working with a sub-committee who reached out to the community for ideas and suggestions. The report was completed in November and tabled before the WEDCo Board in December. The Board will be continuing to review the report, working with the professional services of Deloitte, and WEDCO will be providing the community feedback from the submission.
Additionally, it should be noted that the interim America’s Cup use is not completed until July 2017 and there is a possibility that this event could be contracted for continued use by the ACEA.
Finally, WEDCo is making every effort to ensure our community is aware and informed on all projects, events and opportunities through our website and various media forums.
I do hope this assists and provides some further clarity on the Cross Island project.
The West End Development Corporation.