Fahy defends municipalities law
Home Affairs Minister Michael Fahy has rejected a claim by developer Michael MacLean that a mistake was made in the new law governing the municipalities.
And, he says, Government is willing to hold talks with the parties involved in the City hotel project to work out the way forward.
Mr MacLean, the principal shareholder of Par-la-Ville Hotels, the company behind plans to build a $350 million luxury St Regis hotel and condominium development, has warned that his investors have lost confidence in the negotiations and discussions with the Government since the passage of the Municipalities Amendment Act 2013 which now requires a proposed financing deal to go before parliament.
The developer has claimed that it had been understood that the Corporation of Hamilton would be empowered to guarantee a $15 million bridge loan using its land, but another requirement that the deal go to parliament was not anticipated.
“The bill does provide for, and allow for corporations to give guarantees using corporation land for developments subject to parliamentary approval,” the Minister said yesterday.
“That allows the people of Bermuda to understand how such lands are being used and guaranteed. Nothing wrong with that at all.” He insisted that the law reflects Government's intentions and no mistakes had been made in drafting the law.
“The Act speaks for itself. The Government's not made any mistakes, the Act is what it is.”
As to the reported reluctance of the investors to move forward under the conditions of the new law, he said: “We will continue to work with both the developer and the Corporation with respect to Par-la-Ville.”
He would not be drawn on whether he supported the deal.
“I'm not going to say anything outside the Economic Development Committee in respect to any of this.”
But he noted that the law requires all agreements for leases of land for more than 21 years had to be reviewed by his Ministry before being submitted to parliament.
“For me to comment any further is going to be premature until I see everything that's out there.”
But Mr MacLean has warned that investors for his City hotel project are disillusioned by what they see as yet another delay.
“I wouldn't want to see any investors walk away, but to prevent something like that happening means open dialogue and conversation as to what the position of the Government is in respect to the development — both the developer, investors and the Corporation,” Minister Fahy said.
“The parties need to sit down and have a conversation about what is required. That's now what needs to happen. The Act is in place. Let's sit around the table and make Bermuda get back to work. That's what we pledged to do.”
Once the Act comes into force, the Corporation of Hamilton would have 14 days to submit to the Government all land leases for more than 21 years, as well as outright land sales, for review by the Minister who is then required to table them in parliament.
Land leases for both the waterfront redevelopment project and the St Regis hotel project will be impacted because the requirement is retroactive to January 1, 2012.
The Corporation of Hamilton entered into a 262-year lease of about 26 acres of its land to Mr MacLean's Allied Development Partners on December 13, 2012.
And in April 2012, the City, headed by then Mayor Charles Gosling signed a fresh 120-year lease — renewable to 262 years — with Par-la-Ville Hotels and Residences, Ltd.
It is unclear whether the Government already has all the relevant documents for the two projects.
Minister Fahy indicated that the process could well be expedited if that is the case.
Parliament reopens on November 8.