Legal Action Launched Over Development, Lease

February 23, 2015

Two planned developments — the City Waterfront and the Par-La-Ville Hotel — are the subject of legal proceedings, with Michael MacLean’s company launching legal action over losing the waterfront lease, while another company Mr. MacLean is involved in is the defendant in legal action correlated with the Par-La-Ville development.

Citing “costs and losses”, Mr MacLean’s Allied Development launched legal action over losing the lease, which they signed with the Corporation of Hamilton [CoH] in late 2012. The RFP process to award the lease was criticised in an Ombudsman’s report, and the lease was overturned following a vote in Parliament.

In addition, Mexico Infrastructure Finance LLC has initiated legal action against the CoH as well as Mr MacLean in his capacity with Par-la-Ville Hotel and Residences Ltd — the other planned development he is involved in — over an $18 million loan which was backed by a guarantee by the Corporation of Hamilton.

Waterfront Development-new

2012: City Waterfront Lease Granted

In late 2012, the Corporation of Hamilton [CoH] signed a lease with Allied Development Partners, giving them a 262-year lease on 26-acres of City waterfront.

The CoH said, “The document gives the developers a 262-year lease on 26-acres of City waterfront between Barr’s Bay and the Department of Marine & Ports on Front Street.

“The long lease is in keeping with the leases given to 9 Beaches and Club Med and was necessary in order to attract institutional investors and secure the capital necessary to build a $1.7 billion infrastructure.”

2013: Ombudsman’s Report Criticizes RFP Process

In December 2013, the Ombudsman for Bermuda issued a report into the CoH and the Waterfront Development, with Arlene Brock saying “The Waterfront Development seems to illustrate the general allegations of poor governance.

Ms. Brock’s report said the Request for Proposal [RFP] to select a development partner consisted entirely of a 4 inch by 6 inch advertisement with “no supporting specifications, guidance or other scope, parameters and documents that would typically accompany an RFP.

The report [PDF] said the “CoH’s decision not to follow their own Tendering and Quotes Policy, their failure to invite the technical staff to provide input into the RFP process as well as the absence of materials such as submission guidelines, evaluation criteria and parameters of the project created an environment for arbitrariness, non-transparency and abuse of power.”

2014: Waterfront Lease Overturned After Vote In Parliament

In March 2014, Parliamentarians passed a Bill that resulted in the overturning of the 262-year lease the CoH signed with Allied Development Partners for the City waterfront area.

The Municipalities Amendment Act 2014 [PDF] passed in the House by a vote of 18 – 15, with all OBA MPs present voting in favour, while all PLP MPs present plus Independent MP Terry Lister voted against it.

Clause 2 of the Bill — “any agreement that is rejected by the Legislature under subsection [4] shall be void ab initio” — was the section that allowed for the lease to be overturned.

Following the passage of that Bill, Junior Minister of Home Affairs Sylvan Richards introduced a Motion to invalidate the lease the CoH signed, which was approved following a heated debate which saw multiple Opposition MPs criticise the Government for invalidating a lease.

2015: Allied Development Partners Launch Legal Action

Allied Trust and Allied Development Partners Limited have filed legal documents seeking millions of dollars in financial compensation, saying they have “lost the ability to carry out the Waterfront development.”

In his affidavit, Michael MacLean alleged that his first contact with the new OBA administration was a few days after the General Election in December 2012, when he was invited to meet with then Premier Craig Cannonier at the Hamilton Princess.

“When I arrived at the Princess I was taken to that Gold Lounge, which is above the reception area of the hotel, to have a private meeting,” Mr MacLean’s affidavit says.

“The Premier took the Waterfront development proposal document, and a shorter summary document I had also brought with me and my business card, and put them under his jacket when he left the meeting. ”

Mr MacLean said the next day he received a phone call from Stephen Decosta — who he termed the “Premier’s assistant” — saying “he wanted to speak to me about the development proposals. We met later that day at my office.”

The 17-page affidavit goes on to describe more meetings and conversations that allegedly took place in 2013, about both the Waterfront lease, and the Par-La-Ville development.

It goes on to allege that around July 2013,  it “was very clear that the Government of Bermuda was going to block the Waterfront development…”

Par-La-Ville Development-new

Background To Par-La-Ville Development

Discussions surrounding building a hotel on the site of the Par-La-Ville car park have been ongoing for years, with a 2009 news report saying the resort was “scheduled to open in 2013″.

Calling it the “first major luxury hotel to open in downtown Hamilton in more than 50 years,” the 2009 report said the hotel would feature approximately 140 guest rooms and suites, 80 residences, a spa, restaurant, wine bar, library, and would be “owned by Par La Ville Hotel and Residences, Ltd., a partnership between Virginia-based Unified Resorts, Ltd. and New York-based Sagewood Investments, LLC.”

Guarantee/Loan Provided For Par-La-Ville Development

In 2013, a motion was tabled in the House of Assembly to authorise the giving of a guarantee of up to a maximum of $18 million by the CoH, for the purpose of developing a hotel on the Par-la-Ville car park site.

A loan – which was backed by a guarantee by the CoH – was provided by Mexico Infrastructure Finance LLC, which according to the official Florida business website, is a “Foreign Limited Liability Company” with a principal address in Miami, Florida.

Documents pertaining to the CoH guarantee of the $18 million loan can be viewed here [PDF] and here [PDF].

Legal Action Launched Over The Par-La-Ville Development

In a totally separate legal action from the waterfront matter, Mexico Infrastructure Finance LLC has initiated legal action against both the CoH and Mr MacLean in his capacity with Par-la-Ville Hotel and Residences Ltd.

This legal action is over an $18 million loan provided by Mexico Infrastructure Finance LLC, which was backed by a guarantee by the CoH, with allegations raised in reference to the repayment of that loan.

According to the Bermuda Supreme Court filings, Mexico Infrastructure Finance LLC has filed against the Corporation of Hamilton, “Par-La-Ville Hotel Residences Ltd.” and “Michael MacLean et al.”

Note: Non-Bermuda Related Legal Action Involving Old Club Developer & New One

While it does not involve Bermuda whatsoever, on a coincidental note related to legal action over leases and hotel developments, there was also a legal dispute in the U.S. Courts involving Bazarian International Financial — who was once slated to develop the old Club Med property in Bermuda — and the Venezuela-based Desarrollos Hotelco Group who are the new developers scheduled to develop the same property.

That legal action saw Bazarian International file against Desarrollos in the US District Court for the District of Columbia in reference to a lease for a hotel development in Aruba.  A legal document pertaining to that case can be read here [PDF] on the U.S. Government website.

testimonial-divider

We have asked a number of entities — from Government Ministries to the political parties — to comment on the Bermuda legal matters, however it is not likely that comment will be forthcoming from any entity, as officials tend not to comment on matters before the Courts, however we will update if able.

Update 5.58pm: Attorney-General Trevor Moniz has responded, his comments can be read here.

Share via email

Read More About

Category: All, News, Politics

Comments (9)

Trackback URL | Comments RSS Feed

  1. Tony Brannon says:

    What a mess….

  2. mike says:

    OK… just get rid of the Corporation… this is some mess that they have put the city in. Usually it takes a couple of terms to bankrupt an organization… they managed to do it in one.

    Did they get the deposit back for the black mayors conference?

  3. Triangle Drifter says:

    The legacy of the PLP keeps on giving through the COH & its incompetents.

    Looking at it a different way, the voters, the residents of Hamilton who voted this Team Hamilton PLP lot in are responsible for the millions upon millions of missing, poorly spent & now money being spent on legal fees to sort out the dung pile that they have created.

  4. aceboy says:

    This is COHgate.

    Maclean thinks he is owed millions by the govt. No way Jose. How can a bunch of Hamilton Corporation people who won the lowest turnout election in the history of the COH (because their PLP buddies removed the vote from the actual taxpaying businesses) turn around and hand out a 262 year lease to a local favoured contractor ? It’s WRONG. Plain and simple.

  5. Eragon says:

    How can anyone put into place a lease for 262 years that is almost the time Bermuda has had a government. No lease should be approved for over 50 years without the specific permission of the legislature. So unreal to have such a lease and even with the approval of the legislature it must benefit the country as a whole not just a small part. Here we are giving away land to an entity that would run through more than 50 terms of any government and over a period of time that even goes beyond the life of a normal trust. This is crazy, so very crazy that a company would even go into a contact for such a term. This appears to be driven by greed as something is very wrong with both sides of this coin send it back to the mint.

  6. swing voter says:

    bottom line….they guy has a legal document, as absurd as it is. Its a cycle of greed that started very long ago, but until recently, the greed was subtle, wheeling dealing in the ‘upper room’ ;-)