Senator Michael Fahy stepped into a stewardship role at the Corporation of Hamilton because of concerns about developer Par-la-Ville Hotel & Residences Ltd’s deal with lender Mexico Infrastructure Finance LLC, and the subsequent disappearance of an $18 million bridging loan.

Par-la-Ville car park — prime real estate long expected to be developed as a hotel — was put up by the Corporation of Hamilton as collateral for the loan, but after the failure to repay that loan by the developer, the property is now in the hands of the KPMG receivers.

“This whole debate is the reason we stepped in,” Sen Fahy said, adding that he now has a “good understanding” of the chain of events.

“We are in the middle of discussions with all parties,” he said, and are “in constant dialogue with all involved parties to try and find an amicable solution to the Par-la-Ville matter”.

Sen Fahy said that control of the Corporation was taken over on January 25, and that between March 2014 and the end of January this year, “we had no running of the Corporation”.

He explained: “I attended a meeting on January 22 with the entire Council of the Corporation of Hamilton, including the Mayor, and at that meeting, a number of concerns were brought to my attention in relation to the transaction, in respect to the guarantee and the loan.

“As a result of the conversation, and upon further inquiry, it led to my stewardship of the Corporation on January 25.”

Sen Fahy was first in a stewardship role at the Corporation from mid-December 2013 until March 17, 2014. “Then, obviously, the Corporation ran its own affairs,” he said.

The Par-la-Ville deal occurred after he returned management of the City of Hamilton to the Corporation under Mayor Graeme Outerbridge.

Carlton Simmons, an alderman of the city who is running for Mayor in the upcoming municipal election, said during an interview in regard to his candidacy that initially he did not support the Par-la-Ville loan.

“I was always sceptical about using City property to back a private business venture,” he said.

“The record will show that I personally requested our attorneys to come to address the board to give us a clear legal understanding of the implications of backing this particular loan.

“We were given assurances by our attorneys that the Corporation will never be financially at risk for more than $3 million.

“It was only after the Government approved legislation, specifically to allow the Par-la-Ville loan to go forth and gave their blessing, that I voted in support of the loan.”

“It is important for the public to know that based on the assurances given by our attorneys to the board, $15 million of the $18 million was never supposed to leave a joint account held by the Corporation of Hamilton and the developer. The legal conditions under which the money could have been released were never met.

“The Corporation of Hamilton’s lawyers and the Council were never consulted, and therefore did not advise the release of millions of dollars to a third party.

“Lastly, if the current City rules and guidelines had been followed, this tragedy would have never occurred.

“Someone has to be held responsible.”