CAB129-53 — Page 92

Printed for the Cabinet. July 1952

Page 92

CONFIDENTIAL

62

Copy No.

C. (52) 211

7th July, 1952

CABINET

ADMIRALTY AND WAR DEPARTMENT PROPERTY IN BERMUDA

MEMORANDUM BY SECRETARY OF STATE FOR WAR

Service property surplus to requirements in Bermuda and offered to Bermuda includes: -

Admiralty-

Dockyard.-57 acres, 425,000 square feet storage, wharfage, &c. Ireland Island, South.-73 acres, hospital and 108 houses. Spanish Point, Nelly and Ports Islands.-37 acres vacant land.

(Total Area: about 167 acres.)

War Department—

Scaur Hill.-21 acres vacant land.

Warwick Camp.—123 acres of southern beach frontage. Prospect Camp.-256 acres, barracks, hospital, &c.

St. George's.-130 acres, barracks, hospital, &c.

St. David's.-31 acres, camp buildings.

Boaz and Watford Islands.—43 acres various buildings.

117 houses and 59 acres at various places.

(Total Area: 663 acres.)

2. Locations. The property is in four main locations, i.e., St. George's Barracks, adjoining St. George's town at the eastern end; Prospect, close to the capital town of Hamilton; Warwick, on the southern coast; and Dockyard, Boaz, &c., at the western extremity.

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3. Value. Early in 1952 the property was valued by a professionally qualified valuer of the War Office and exploratory negotiations were opened by the War Office representatives with the Bermuda Authorities. The negotiations were con- tinued in London in May. The following is a summary of the figures mentioned to date:

(a) It was considered by the War Office representatives that the property was conservatively worth rather more than £2 million if sold immediately, but if disposed of piecemeal it should realise £3 million.

(b) The lowest figure mentioned by the War Office representatives in the

exploratory talks in Bermuda was £2.5 million.

(c) The lowest figure mentioned by the Bermuda Government during the exploratory talks was £1 million (with a suggestion of more if the Dockyard proved to be a valuable commercial asset). This assumed Bermuda would discontinue her present voluntary annual contributions to Her Majesty's Government, of which some £480,000 remains to be paid over a considerable period.

(d) The War Office representatives in their report on return from Bermuda

suggested a compromise figure of £1 million or thereabouts.

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Page 3 the 45hdon negotiations in May, Bermuda, made an of 630,000

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(to be paid by £250,000 down and the balance over 5 years)—the voluntary annual contributions (paragraph 3 (c)) would continue to be made in addition. Bermuda also asked not only for the Service property now surplus but, in addition, for other property becoming surplus in the future and certain furniture and other stores as well.

(f) The last counter-offer made to Bermuda was £1,850,000–£2 million down

and the balance over seven years.

4. The following points have been made by each side during the negotiations: --

Bermuda

(i) £650,000 is a fair price having regard to the maintenance costs involved through piecemeal disposal and the restrictions imposed by the Bermuda Government on the sale of property to non-Bermudians, to prevent land speculation.

(ii) Most of the property would be used for social purposes (subsidised housing

for the coloured population, open spaces, schools, &c.).

(iii) There would be serious political reactions in Bermuda to any attempt by

Her Majesty's Government to drive a hard bargain.

(iv) The Bermuda Government cannot afford more.

(v) As between Her Majesty's Government and the Bermuda Government the value of houses and installations, &c. should not be taken into account as Her Majesty's Government has had its full value from them as part of the requirements for Imperial Defence.

(vi) The majority of the land was originally acquired about 1795 by Her

Majesty's Government at prices round £50-£100 per acre.

The Service Departments

(a) Any figure of the order even of £1,850,000 is below the conservative valua-

tion of the property for disposal now.

(b) The supply of land is already short and the additional land must be valuable

to Bermuda.

(c) The buildings generally are solidly constructed and in a reasonable state

of repair. Maintenance has not therefore a high incidence.

(d) 225 houses are available in various parts of the Islands which would go

a long way to solving the current housing problem.

(e) The dockyard area has potential interest for storage, for industrial pur-

poses, and possibly as a port.

(f) The original price of land acquired in 1795 can have no relation to its value

to-day.

5. The possibilities are:-

(i) Adhere to Services' offer of £1,850,000.

(ii) Accept Bermuda's offer of £650,000.

(iii) A compromise between (i) and (ii).

(iv) Failing any of the above, direct disposal by a Service Agency in co-

operation with the Bermuda Government (which has been promised). 6.

This memorandum was prepared in consultation in the First Lord of the Admiralty.

The War Office, S.W.1,

7th July, 1952.

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