Burch’s pen notes shed light on DeSilva rent deals
Handwritten notes by former Cabinet minister Lieutenant-Colonel David Burch justifying why the Government should rent office space from a company co-owned by Zane DeSilva, the Deputy Premier, have been released “in the public interest”.
The top civil servant at the Ministry of Public Works and Environment disclosed the notes and internal reports to The Royal Gazette in response to a public access to information request, after determining they would “provide a better understanding of government decision-making”.
The records relate to several five-year leases for the offices of the Department of Child and Family Services at 131 Front Street in Hamilton, which are due to expire on August 31.
The Ministry of Public Works and Environment said on Friday: “As per standard procedure, the future of the DCFS lease … is under review.”
The commercial building is owned by F&E Holdings. Mr DeSilva, who is the Minister of Housing and Municipalities, is a director of the firm, as are his wife, Joanne, and two children, Zane Jr and Zara Harper.
Colonel Burch’s notes shed some light on an arrangement that has raised eyebrows in the past, including in the run-up to the General Election this year, when social-media posts questioned whether the rental agreements and another lease held by the customs department should have been listed on Mr DeSilva’s nomination disclosure.
The customs department moved into 131 Front Street in 2018, after Colonel Burch, who was public works minister, announced to MPs a plan to dramatically cut rental costs. He disclosed Mr DeSilva’s financial interest in the building and said other government departments were likely to move there.
The newly released records show that plans to move DCFS and the Registry-General to 131 Front Street were drawn up the following year.
Ultimately, only DCFS made the move, relocating to three floors in the building, at an annual rental cost of $788,079, according to a notice published in the Official Gazette.
The Pati disclosure details how taxpayers have forked out almost $200,000 a year more for DCFS’s offices at 131 Front Street than for its previous accommodation but have less space. They also reveal that the department did not confirm an “operational need to relocate from their existing premises” before it moved in 2020.
However, civil servants wrote that the 131 Front Street premises could house DCFS’s sexual assault response team, allowing it to relocate from King Edward VII Memorial Hospital in line with best practice, and that “efficiencies” could be achieved by moving the department to a single location.
Colonel Burch said in 2021 that the move was made to “consolidate” the department under one roof, which “added to the safeguarding of Bermuda’s children”.
He explained then: “After years of being ill-housed and unable to meet basic international standards for core functions, 131 Front Street is ideal as it provides adequate space for the entire department, including the security of underground access, a suitably modern technological interface and vitally, a secure space for the sexual assault response team to conduct investigations to international standards.
“The site presents value for money and demonstrates the priority of this government when it comes to addressing the needs of the island’s most vulnerable.”
The Official Gazette notice, published in December 2020, showed that one of the contracts with F&E Holdings for DCFS office rental at 131 Front Street was for “interview rooms, group rooms, therapy rooms, visitation rooms, Sart/forensic interview suite, maintenance expenses” and parking.
In one of his handwritten notes, Colonel Burch pointed out the advantage of government IT services already being in the building because of the customs department having relocated there.
“The decision to lease space at 131 Front Street for both the Department of Customs and the Department of Child and Family Services was made to address pressing operational needs and followed standard government procedures.
“For customs, their former premises no longer met acceptable standards. A review of available spaces identified 131 Front Street as the most suitable option based on functionality and value for money.
“DCFS faced similar challenges operating from two separate locations and consolidation at 131 Front Street allowed for improved efficiency and service delivery.
“All decisions regarding these leases were guided by existing policies and administrative processes. The fact that the property is owned by F&E Holdings Ltd, a company linked to Minister [Zane] DeSilva, was not a factor in the selection process.
“Minister DeSilva was not involved in the lease negotiations or approvals during his previous or current time in Cabinet. His current responsibilities do not include oversight of government leases, and appropriate safeguards are in place to prevent conflicts of interest.
“Alternative options were explored and assessed in each instance, including the original leases and the 2024 customs lease renewal. Relocation was deemed less practical or cost-effective and the final decisions prioritised continuity, suitability and responsible use of public funds.
“As per standard procedure, the future of the DCFS lease, which expires in August 2025, is under review. All leasing decisions are made to ensure efficient public service delivery while maintaining transparency and value.”
The Permanent Secretary at the Ministry of Public Works and Environment released three reports under Pati to the Gazette relating to DCFS’s move to 131 Front Street, along with associated leases and a report about the proposed Registry-General relocation.
He wrote that the reports were exempt from disclosure under Pati, as they concerned ministerial responsibility, but he “ … determined that it would be in the public interest to release the documents to provide a better understanding of government decision-making …”
The records show that Colonel Burch received a recommendation report in 2019 from estates officers in the Department of Public Lands and Buildings who had been “asked to consider 131 Front Street as potential alternate premises for the office of DCFS”.
The officers wrote that further consideration of the idea was “merited”, but a review of other government-owned and privately rented accommodation should be done to “ensure best practice and adherence to protocol”.
March 2018: Lieutenant-Colonel David Burch tells Parliament that HM Customs will move to 131 Front Street, a Hamilton office building owned by F&E Holdings, as part of a cost-cutting exercise, with other departments likely to move there, too. The Minister of Public Works declares MP Zane DeSilva’s financial interest in the building.
June 2018: The Department of Customs relocates to 131 Front Street after a five-year lease is signed.
November 2018: Mr DeSilva returns to Cabinet as the Minister of Tourism and Transport.
2019: The estates team at the Department of Public Lands and Buildings are asked to look at potentially moving the Department of Child and Family Services to 131 Front Street. Colonel Burch instructs civil servants to “move expeditiously” on part of the relocation.
July 6, 2020: Mr DeSilva quits the Cabinet.
September 1, 2020: A five-year lease for DCFS on several floors at 131 Front Street begins.
March 2024: Parliament hears that a new ten-year lease for the customs department on the first floor of 131 Front Street was agreed in the 2023-24 financial year.
August2024: F&E Holdings crops up in reports of a dispute Mr DeSilva is involved in with Butterfield Bank. His lawyer, in a letter to the Bermuda Monetary Authority, claims the dispute is really about a “multimillion-dollar facility provided by the bank” to F&E Holdings.
December 2024: A Supreme Court judgment reveals that an attempt by F&E Holdings to pay off part of an outstanding $14.49 million loan was refused because Butterfield had “concerns over the source of funds”.
February 2025: Mr DeSilva returns to Cabinet as the Minister of Housing and Municipalities after the Progressive Labour Party’s General Election win.
At the time, DCFS occupied two city centre properties: Milner House, where the lease had expired and was rolling on a monthly basis, and Magnolia Place, where the lease was due to run out at the end of the year.
The officers said the existing offices were larger than required. They added that they were suited to DCFS’s operational needs except for “minor alterations” needed to improve security in the reception area.
Regarding a potential move to 131 Front Street, the report pointed to concerns raised by DCFS about “sharing an office with non-DCFS organisations”.
In a penned response, Colonel Burch wrote: “Nonsense — they do that now.”
The report noted that DCFS felt the concerns could be addressed with careful consideration to public access and security.
The officers wrote: “It is anticipated that efficiencies could be obtained in consolidating the two existing offices.”
The report requested the minister’s instructions. In a handwritten response, Colonel Burch wrote: “Approved — please proceed expeditiously with this move in relation to Milner House offices, as lease has expired.
“We can take advantage of government IT services that already exist in the building with HM Customs already in situ.”
Two later decision reports in 2020 noted: “DCFS have not confirmed an operational need to relocate from their existing premises.”
An August 2020 report recorded that Colonel Burch had requested a reduction in rent for the fifth floor of 131 Front Street, which was agreed with the landlord.
The report noted that the relocation of DCFS to the building meant less space — 15,117 sq ft versus 16,244 sq ft — and an overall increase in rent and service charge costs of almost $200,000 a year.
The technical officers wrote: “Since serving notice to vacate the existing premises, the landlord has indicated that they would reduce the rent at the existing premises.
“The average of the total rent for the new leases will be $40.63 per sq ft. This is above the rental level agreed in April 2018 for the Department of Customs at the second floor of the same building [ie, $31.50 per sq ft].”
Colonel Burch and his Acting Permanent Secretary at the Ministry of Public Works signed off on the report regarding DCFS’s relocation on August 5, 2020.
The final report disclosed by the permanent secretary was from 2019 regarding a proposal to move the Registry-General to the third floor of 131 Front Street, at a rental cost of $361,781.50 a year.
Civil servants noted that the proposed space was about 3,000 sq ft more than the registry needed and would increase costs by more than $150,000 a year.
They compared the $40 per sq ft rent with lower rents in Hamilton, including the $31.50 per sq ft for customs in the same building.
In another handwritten note, Colonel Burch described other properties as “legacy buildings that are older than 131 Front Street” with “old infrastructure”.
He wrote that costs would be greater for older premises and attached an advert for a building owned by Bermuda Press (Holdings) Ltd, also priced at $40 per sq ft.
The Registry-General’s office remains on Parliament Street.
Mr DeSilva was in Cabinet when the Registry-General and DCFS moves were proposed but had quit by the time the Department of Child and Family Services moved into 131 Front Street in September 2020.
The customs department had an initial five-year lease for 131 Front Street, which was renewed for a further ten years in 2023.
Island Construction boss Mr DeSilva named F&E Holdings in a list of directorships on his parliamentary register of interests form.
He stated he had a beneficial interest greater than $50,000 or 1 per cent of the issued share capital of F&E Holdings and of the Silverwood Trust, a company earlier reported to be the owner of 131 Front Street.
He was approached for comment for this article.
An X user called “King in the North” posted about the rental agreements at 131 Front Street in February, asking whether their omission from Zane DeSilva’s nomination form meant he should be disqualified as an election candidate for Southampton East.
The post followed calls by the Progressive Labour Party for One Bermuda Alliance candidates to be disqualified for allegedly failing to declare before a deadline that they had interests in contracts linked to public entities.
David Burt tweeted in response. The Premier wrote: “Would invite you to read the Legislature Qualification and Disqualification Act. Your assumption is 100 per cent incorrect and MP DeSilva is not ineligible.”
• To view the reports and Lieutenant-Colonel David Burch’s notes, as well as Zane DeSilva’s register of interests form, see Related Media
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