Charles Gosling, the embattled Mayor of Hamilton, has defended the corporation against blame for the “fiasco” of the failed Par-la-Ville resort development.
Mr Gosling spoke in the wake of a proposal by the Ministry of Home Affairs to either turn the corporations of Hamilton and St George into quangos, or absorb them into the Government.
Walter Roban, the minister, responded on Friday that the collapse of the development was “not the reason” for the proposed intervention, countering: “The main reason is that the Government has a vision for where it desires the municipalities to go.”
He added: “The effort to develop Par-la-Ville goes back to the mid-2000s, under previous administrations. Mr Gosling cannot just attach his tenure to his most recent time.”
Mr Roban said there had been “a clear, longstanding effort by the Corporation of Hamilton, under its current structure, to develop Par-la-Ville — all of which have failed.
“The latest effort has failed very badly, and remains a challenge for the corporation. It’s not over yet — there is still a legal battle.”
Successive developers tried to steward the development for a resort and residences on the site of the Par-la-Ville car park in Hamilton. Ritz Carlton put through a proposal, followed by St Regis with Starwood Hotels.
Meanwhile, Argyle UAE Ltd, the company that received $12.5 million of an $18 million development fund for the project, now faces liquidation, with James Bennett and David Standish of KPMG appointed to the matter on December 12, 2018.
Robert McKellar, the director of Argyle, had his appeal dismissed after he tried to challenge a July 2017 judgment in London’s High Court, in which a judge found there had been “unjust enrichment”.
According to Mr Gosling, liquidators have begun to seize assets purchased by Mr McKellar: an Aston Martin car, an engagement ring, and two properties in Sussex, Overton Grange and Rystwood Farm.
“Justice is slowly catching up with him,” Mr Gosling said.
KPMG declined to comment on the matter when contacted on Friday.
According to Mr Gosling, the Corporation of Hamilton had attempted to extricate itself from a lease with Par-la-Ville Hotel and Residences Ltd, which he said had failed to meet “any of the timelines” connected with the project, by filing a writ against the PLV developers in 2011.
Last week, Mr Gosling told The Royal Gazette: “We realised that Par-la-Ville did not have the capability to enter into this.
“We were going through proper legal procedures to move them out. The Government saw the off chance of a hotel being developed.”
E-mails from March and April 2012 show Mr Gosling clashing with Wayne Furbert, who was then minister of tourism and business development, over getting a lease agreement signed for a St Regis development in Hamilton. Construction alone stood to create hundreds of jobs.
On March 28, 2012, Mr Furbert told the mayor he was “very disturbed” that the corporation had failed to reach an agreement with the developer.
Saying that time was against them, Mr Furbert added: “If this happens, I am going to be very upset, particularly with the corporation.”
He called on both parties to compromise, adding the following day that “all I am asking is that everyone pull out all the stops to make this happen”.
On April 10, on receiving word that a development agreement, ground lease and car park lease had been settled, Mr Furbert thanked Mr Gosling, adding: “I know it has not been easy, but one day you will look back and say it was worth it.”
Last week, Mr Furbert declined to comment, saying the exchange had occurred almost seven years ago.
Mr Gosling acknowledged that while Mr Furbert “put a lot of pressure on us, he was very firm on the developers as well”.
He added: “But we were forced to enter into a lease that ended up with a loss of $18 million to a lender, as well as the loss of a considerable amount of time and prestige of the corporation.
“We are now being accused of mismanagement, of not being able to handle this project. But I feel the council, back in 2012, was handling this very well.”
Shortly after reaching the development agreement, Mr Gosling’s administration lost the municipal elections of May 2012. Graeme Outerbridge succeeded him as mayor, with the “Team Hamilton” administration.
Mr Gosling says now that the new administration “were not capable of handling this issue”.
Mr Outerbridge also declined to comment when contacted last week. The lender in question was Mexico Infrastructure Finance, which in 2014 had provided a bridging loan to Par-la-Ville Hotel and Residences.
After the development collapsed, MIF tried unsuccessfully in the Bermuda courts to regain its $18 million — but the Corporation of Hamilton’s guarantee on the loan was declared void in November 2016.
In January, the Supreme Court dismissed charges against Mr Outerbridge, along with Ed Benevides, the city secretary, and developer Michael MacLean and his wife Yasmin. MIF continues to pursue a case through the courts in New York.
Meanwhile, as the corporation faces possible dissolution by the Government, Mr Gosling complained that “it seems the corporation is being fully blamed for the hotel fiasco”.
Mr Roban disagreed. He said Mr Gosling was merely “focusing on the most recent iteration of the Corporation of Hamilton”.
Mr Roban added: “People should be focusing on the vision outlined in the options presented, and giving us feedback.”