House: Par-la-Ville loan deal a ‘travesty’
Both parties labelled the Par-la-Ville hotel loan guarantee a “travesty” last night as they debated amendments to increase the Corporation of Hamilton's borrowing limit.
However, the Bermuda Government and Opposition took shots at each other during the debate over the responsibility for the failed loan, which left the Corporation of Hamilton owing Mexico Infrastructure Finance (MIF) $18 million and the Par-la-Ville car park at stake.
The corporation had been allowed by the Government to use its land to guarantee a bridging loan between MIF and Par-la-Ville Hotel and Residences to support the construction of a hotel.
That loan was later recalled, leaving the corporation liable for the $18 million, with interest of about $3,450 a day.
Starting the debate on the Municipalities Amendment Act, Sylvan Richards, the Junior Minister of Home Affairs, said increasing the loan limit for the corporation from $20 million to $30 million was necessary to protect the loss of corporation property and ensure the corporation could continue to operate.
He said the legislation was a response to the issues being faced by the corporation due to the failed loan guarantee, and noted that as far back as 2010 the corporation had requested having their borrowing limit increased.
He added that the Bermuda Police Service had been investigating since April, and both the minister and the mayor had been working to secure three experts to locate and recover the missing funds.
“This Government is doing its utmost to allow the corporation to manage its own affairs and this Bill will allow the corporation to remain sustainable with minimal government interference,” Mr Richards said. “The new council came into office with an unenviable task and their work to date to ensure the corporation remains sustainable has been very good indeed.
“The minister and his permanent secretary have done everything they can to work with the new council and will continue to work to ensure that funds are recovered.”
Walter Roban, the Shadow Minister of Home Affairs, said the amendment was an effort by the Government to fix an issue it had caused by allowing the loan guarantee.
“We understand the enthusiasm that the Government has to build a hotel,” he said. “They like to remind the public that the previous government didn't do it, but there isn't a hotel in Hamilton.
“There is an $18 million debt created by the Government of Bermuda and the Corporation of Hamilton.”
Mr Roban said the One Bermuda Alliance had promised proper procedures would be put in place to protect the guarantee, but that the $18 million was still missing. He described the legislation as a “meagre attempt” to repair a big disaster, and called for someone to be held accountable.
“We were told we wouldn't get to this point,” he said. “We were promised. The people of Bermuda were promised, but here we are. Trying to repair this mess. Where is the accountability going to start? Who is going to be held responsible for the actions of this Government? Stolen money is all we have. No hotel under the OBA, no jobs under the OBA, more money wasted by the OBA.”
His criticism was echoed by Opposition MPs Derrick Burgess, Zane DeSilva and Jamahl Simmons.
Shawn Crockwell, the Minister of Tourism Development and Transport, agreed that it was a travesty that forced the amendments to be tabled and joined the calls for accountability, but said the fault for the incident could not be fully laid at the feet of the Government.
He said Parliament had approved the amendments granting the corporation the ability to make the guarantee, claiming there had not been “vociferous objections” from the Opposition.
He added that the OBA had expressed concerns about developer Michael Mac- Lean being selected for the project under the previous administration.
Mr Crockwell further said the Opposition had repeatedly questioned the Government about why it was not giving Mr MacLean more support, and that Opposition Leader Marc Bean had gone on the radio to defend Mr Mac- Lean after the loan's collapse.
PLP backbencher Walton Brown suggested letting the MIF have the car park for $18 million might be a better deal in the long term, but the OBA's Grant Gibbons said more corporation property could be lost.