Home Affairs Minister Walton Brown disclosed that developer Michael MacLean has abandoned court proceedings, after he failed to secure $156 million in compensation for the voiding of his waterfront development contract.
In a Ministerial Statement to update MPs, Mr Brown said the Bermuda Government successfully petitioned the courts this week to drop its arbitration with Mr MacLean, saying the developer had declined to take part since 2015.
The Corporation of Hamilton (CoH) leases were granted in 2013 to Mr MacLean’s Allied Development Partners Limited. But in 2014, the former government “passed legislation to cancel the leases”.
“This triggered a right to compensation for the companies. An arbitration panel was duly established. Mr MacLean’s initial claim was for $156 million. This was not accepted by the Government,” said Mr Brown.
“In 2015 the companies controlled by Mr MacLean launched a constitutional challenge to this arbitration proceeding. They were unsuccessful in this challenge and directed back to arbitration by the courts.
“Since this time, Mr MacLean has not participated in the arbitration process and has not responded to efforts by the Government to advance the matter,” the Minister said.
The granting of development rights to companies owned or controlled by Mr MacLean for the Par-la-Vill car park were also linked to the waterfront deal. And legislation was passed by the former government to allow the CoH to grant such rights concurrent with its voiding of the waterfront lease.
You may recall that the previous government authorized the CoH to back an $18 million loan to a company controlled by Mr MacLean. The Court subsequently found that the Corporation did not have the authority to grant the loan guarantee.
“We now know that a large portion of these funds guaranteed by the Corporation were directed overseas and spent on luxury items having no relationship to the purpose for which they were intended,” Minister Brown said.
The Minister concluded: “This government stands ready to bring the issues involving the voiding of the waterfront lease to an end and is fully mindful of the interests of those claiming redress for the cancellation of the leases and the public purse.”