Michael Fahy said that despite issues with the Corporation of Hamilton, he does not regret allowing them to use Par-la-Ville car park to guarantee an $18 million loan which later defaulted.

While the Minister for Home Affairs noted the default had left the municipality in a difficult position, he said: “Faith has to be placed in the hands of those who are the decision makers.

“They did due diligence. Some things clearly went awry, which we discovered, and we put in the appropriate stops to that. No, I don’t regret it. I think that the Corporation had elected officials. They made those choices, and they made some poor choices. On the other hand, they also made some good choices.

“Unfortunately this one has bigger ramifications than some others, but we will continue to work and see what we can do.”

The loan guarantee was approved by the House of Assembly last year, allowing the Corporation to use the Par-la-Ville car park as collateral to guarantee an $18 million loan to Par-la-Ville Hotel and Residences Ltd. The loan subsequently defaulted and the parking lot was placed in receivership.

Mayor Charles Gosling, who was elected in May, has said the burden of the $18 million loan guarantee had created a major financial challenge for the administration.

Asked by The Royal Gazette if Government is helping the municipality deal with the results of the defaulted loan, Sen Fahy said that he has had regular meetings with Mr Gosling and his team.

“We met as recently as last week, and we spend time looking at the various options and Government will continue to think about what can be done to assist, but at the end of the day this was something that the previous administration had asked for,” he said.

“Our Government was not interested in government guarantees for that project. The Corporation of Hamilton made approaches, as did the developer to give a guarantee from the Corporation and we passed legislation to facilitate it. They made those decisions, and they made some poor decisions.

“As a result Government had to take stewardship, and that’s been returned. The powers have returned to the Corporation. There’s not much more I can say other than that we will continue to work to find a solution and hopefully we can.”

Sen Fahy acknowledged that he had a complicated relationship with the previous administration at the municipality. Over the past two years, the senator twice placed a stewardship notice over the municipality in response to various issues.

“It was challenging,” he said. “There were a number of people out there who said: ‘Minister, you would be better off closing the Corporation down entirely and turning the Corporation into a Government board’.

“I have said this repeatedly, but that was never our interest to do that. The City of Hamilton and St George’s both have rich history, some good and some bad, but you don’t simply shut something down because of a perceived conflict of personality.

“I believe the previous administration did some things that were not quite right, and this Government had to take a stance and fix some of these things and also give opportunity where we thought we could give opportunity, and unfortunately some of that has not been successful.”

Sen Fahy said his relationship with the current administration also has some challenges, but said the relationship between the city and the government is good overall.

“The relationship with the new administration obviously also has its own challenges and we can’t all expect to get along. Having said that, the working relationship is good,” he said. “The Municipalities Act has been amended so there is Government oversight, but our position is very much one of we are hands off as much as we can be.

“There are obviously financial instructions that need to be followed, the Minister has to get engaged from time to time, but they pretty much get on with the business that they need to get on with without any interference from us.”

Asked about the Hamilton Waterfront project, which found itself before the courts after the Government voided the developer’s contracts, he said he was pleased by a recent Supreme Court judgment which struck out some of the developer’s claims, which Sen Fahy described as “scurrilous”.

He further said that he was confident the legal battle would not affect the Island’s hosting of America’s Cup events, and that the Government was not concerned about the financial impact of any judgment.

“The Government has made its position very clear indeed about what we believe the lease is worth, and we have made representations to that effect,” he said. “The rest we will see in arbitration, but no, we’re not concerned with that at all.”