Failure to win legal case over failed hotel plan could have decades-long impact – Mayor
Hamilton’s mayor fears the city could lose a controversial court battle costing taxpayers upwards of $20 million and setting capital development back decades.
Charles Gosling admitted he was “concerned” about a long-running international legal tussle centred on a failed development of a city centre car park site.
The mayor said his fears were based on the unpredictability of the US court system.
The bitter struggle stems from attempts to develop a luxury hotel on Par-la-Ville Road car park, dating back to the mid-2000s, under a series of Hamilton administrations.
A loan of $18 million was made by Mexico Infrastructure Finance (MIF), a company based in Florida, to Par-la-Ville Hotel and Residences, also known as PLV, in 2014.
The loan was guaranteed by the Corporation of Hamilton under the “Team Hamilton” administration of then-mayor Graeme Outerbridge.
The Corporation of Hamilton and PLV were sued by MIF after the developer defaulted on the loan in December 2014.
MIF’s series of legal actions to recover the money, in Bermuda and overseas, started in January 2015.
Mr Gosling told The Royal Gazette: “They lost their case in Bermuda and now they are going elsewhere to proceed.
“It’s a completely different legal system than the UK or Bermuda. So, we are a little bit concerned about it, I’ve got to admit.
“But I’m still fairly, fairly positive.”
Asked what the concerns were based upon, the mayor said: “You never know with the US system. Where we are lucky is that it went form the state system to federal. So, the judges are appointed rather than being elected. So, there’s confidence there, but, it’s out of our jurisdiction.”
Mr Gosling, who has announced he is not seeking re-election, said the implications of a loss would be grave for the city.
Pressed on whether the financial hit for Hamilton could be $20 million if the city lost the case, the mayor said: “I’m sure that they would be one to go for damages and stuff like that, and lost revenue, so I’m sure the number they would be asking for would be more than that.
“I just feel that our case is strong enough that it might be a long – several years more – battle, but, ultimately common sense will win out on this one.”
He added: “If the city lost … we would be capable of being able to take care of our loses.
”But, while we can pay for it, in terms of capital development or anything like that within the city, it would be probably 15, 20 years before we were able to get out from underneath that.“
Mr Gosling said: “These guys did not go in blinkered … they were not misled in terms of the arrangements that they went through.
“Their original case has pretty much been cut in half by the US judge. They are in the process right now of interviewing various people that were involved with the releasing of the monies, the guarantees and so on and stuff like that.”