Corporation’s path to 262-year Waterfront deal appears unfair’ Brock
Ombudsman Arlene Brock has suggested that the controversial agreement to redevelop Hamilton’s waterfront should ideally be scrapped because the process was littered with irregularities.
Although the investigation initially intended to examine “general governance concerns”, Ms Brock eventually decided to focus on the waterfront development project “to illustrate the general allegations of poor governance” within City Hall.
The Corporation signed a 262-year lease with developer Allied Development Partners (ADP) in January 2012 to rebuild the city’s waterfront at an estimated cost of $300 million.
But Ms Brock found that the tendering process was flawed from the start.
A Request For Proposal advert “was inadequate and not in accordance with normal — never mind best — practices” and that “this was not a matter of ignorance, but rather of choice”.
She added that “the failure of a proper RFP ... would likely (and indeed did) dissuade serious interest from professional highly-qualified local and overseas developers”.
As a result, of eight companies that contacted the Corporation in response to the advert, five contractors only submitted Expressions of Interest, effectively ruling themselves out of the bidding process.
She said: “Had all responders known that their responses would be treated as proposals then they could have, for example, named relevant experience and international partners with similar scale projects.
“Only Allied did so. This contributed, among other reasons, to their submissions being judged as the best ‘by far’.”
Ms Brock said that the Corporation apparently did not reveal any parameters for the contract until the interview stage of the tendering process — and the three companies shortlisted for the job were given just one day’s notice to attend.
And the Ombudsman discovered that Deputy Mayor Donal Smith and two other councillors made a weekend visit to City Hall “in the absence of staff” to make sure that ADP’s bid had been received.
“I have no proof of inside information or of untoward action ... on the part of the developer,” she noted.
“The weekend visit to a closed City Hall by the Deputy Mayor and others to confirm that Allied’s boxed submission was received remains a concern.
“Selection of the development partner for what is billed as the most significant construction project in the Island over at least the next decade was clearly unfair, somewhat ad hoc and based on a quicksand of non-disclosed criteria and non-existent competitors.”
Ms Brock noted that ADP was expected to meet certain conditions before contracts were signed.
But she concluded that, of the municipality’s nine elected officials, “only the inner core [Mayor Outerbridge, Deputy Mayor Smith and Councillor Keith Davis] — not even a legal quorum — were privy to and apparently satisfied by evidence that all the conditions had been fulfilled”.
Ms Brock discovered that, although the lease with ADP affected the city’s commercial docks, operator, Stevedoring Services did not learn about the agreement until it was reported in The Royal Gazette several months after it was signed.
And the Corporation failed to consult with Government about ADP’s rights to encroach on the seabed, which does not belong to the Corporation.
“There appear to have been certain consultations or conditions that should have been met prior to the contracts being signed,” Ms Brock said.
“If the consultations were not carried out and the conditions were not fulfilled, there may be legal questions about whether or not the development agreement and the ground lease are entirely valid.”
The Ombudsman also noted concerns raised by the Planning Department, which observed that “the plans upon which the Environmental Impact Study appears to be based do not match the plans promulgated in the public domain”.
In her conclusion, Ms Brock said: “The Corporation’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.
“Not only was the RFP advertisement wholly inadequate, but the submission process was unclear and the evaluation process was unfair.
“With this RFP process the Corporation effectively asked responders to enter a game in which not only were the rules of the game not explained to them, but the rules were not created until the game had already begun.
“In such circumstances, observers cannot help but suspect that the rules were being created to ensure that a certain participant wins.”
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