The Hamilton Waterfront complex was promised to developer Michael MacLean while the corporation was in talks with former mayor Charles Gosling and his administration about the property’s release from the Democracy Trust, it can be revealed.

Documents seen by The Royal Gazette show that the Corporation of Hamilton, under Mayor Graeme Outerbridge, and Mr MacLean’s development company, Allied Development Partners Ltd (ADPL), entered into a co-operation agreement in which the developer was granted an exclusive partnership.

At that time, the trustees were the members of the corporation of the previous administration.

The Democracy Trust was formed as a public trust for the benefit of residents and taxpayers in the city.

Outerbridge and his corporation members wanted that trust disbanded and the City properties that were leased to it released.

Correspondence shows that the trustees, which included Mr Gosling, had given those instructions to the law firm Marshall Diel & Myers.

Documents also show that only one day after the corporation properties were released from the trust, on December 13, 2012, the Corporation and the ADPL agreed a 262-year ground lease and development deal for the 20 acres that compose the waterfront property, from Barr’s Bay Park and including the cargo docks, along with the City Hall car park.

Mr MacLean gave the affidavit in a lawsuit against the Minister of Home Affairs and the Attorney-General for losses that he has claimed as a result of losing the rights to the City Waterfront and its development.

The minutes from the Corporation of Hamilton board meeting for July 4, 2012 show the subject of the trust was discussed while Carlton Simmons was present. The minutes state that corporation secretary Ed Benevides said that the previous board had agreed to see what the new board wanted to do with the trust, “although obviously that discussion has not taken place yet”.

The minutes say that meetings between the trustees and the board members, and then between the board and Marshall Diel & Myers, were to be arranged. “The board members agreed that the existence of the trust should remain confidential to the board,” the minutes read.

That meeting took place on July 17, 2012.

Now, Mr Gosling, who was Mayor of Hamilton at the time the Democracy Trust was set up — and who is running again for the position in Thursday’s municipal elections — has been subjected to public criticism from Mr Simmons, his rival for the mayoral seat.

Mr Simmons has claimed that the existing corporation was kept in the dark about the trust, which protects the corporation’s assets and leaseholds, and a $1 million legal defence fund.

Mr Gosling, who has already publicly defended the trust, explained it was formed by a unanimous decision of the Corporation of Hamilton board, which followed revelations regarding the Progressive Labour Party Government’s declared policy to wind up Bermuda’s two corporations and take their operations into Government.

“It was also a time when Government was refusing to enter into, or even discuss, a new lease for the rental of the Bermuda fire brigade’s station on King Street — a property on an expired peppercorn rent and the corporation, and its taxpayers, having to pay for the City’s fire service.

“There was a great worry that Government was failing to live up to its commitments and responsibilities as set out in the Bermuda Constitution regarding property rights: the right to own property and to receive proper benefit of that ownership.”

He said at that time the Municipalities Act empowered the corporation to form the trust. That Act has since been amended. “The Democracy Trust was formed as a public trust, held in benefit for the residents and taxpayers of the City of Hamilton.

“Members of the Corporation of Hamilton board served as trustees — no member of the board could, or would, have benefited from the trust,” he said.

He added: “There was no transfer of property to the trust; the trust simply received a renewable 20-year lease on all the properties — except Par-la-Ville car park — which were then re-leased back to the corporation.

“The Trust had the first right of refusal on any sale of corporation property, thus preventing any ‘fire sale’ or below market sale.”

He said outgoing members could resign their trusteeship, which could then be taken on by the newly elected members. “During the 2½ years that the trust was in operation, its existence was stated in the audited financial statements of the corporation, and was mentioned in the auditor’s notes.

“During that time the full audited set of statements were received by both of the ministers responsible for municipalities, the Minister of Finance and latterly the Premier, as well as their permanent secretaries, through the minister.

“Each year, as was the established practice then, a summary of the statements was published in the local papers.”

Mr Gosling explained that after losing the previous municipal election to Mr Outerbridge, he arranged a meeting with his successor the next morning.

“A meeting was held that afternoon, well within 24 hours of the election, with both of us, the City secretary and the Democracy Trust lawyer who gave an explanation as to the history leading up to the formation of the Trust, the way in which the Trust was formed and the manner in which it was run,” he said.

“The newly elected mayor was advised that the Democracy Trust and the trustees would respond to his instructions as to whether the new Corporation of Hamilton board would all be appointed as trustees, allowing the current ones to resign, some mix of both boards, or to disband the trust.

“The mayor requested time to consider how he wanted to move forward and how he could release this information to the board members.

“After a council meeting in the first week of July, an invitation was made for the prior council to meet with the current board to discuss the trust. On July 17, the ex-mayor and several members of the prior board met with the new members and mayor.

“A full discussion was engaged and it was apparent at that time there was no consensus, as many around the table believed that Government was still committed to winding up the Corporation of Hamilton, while others were confident in their relationship.”

Mr Gosling said: “In September, the mayor advised the trustees that he wanted the trust dissolved, which is what has happened — with the lawyers being instructed the same day. In November, the council was informed that the trust was dissolved. All the leases have been released and monies returned.”

Mr Gosling said the Waterfront properties were almost immediately leased to Mr MacLean’s development entity. “The City received no compensation for this transaction, just the promise of some future revenue,” he said. “The resolution approving this lease is unrecorded.”

Mr MacLean had confirmed this in his affidavit. “Allied Trust has or had a long leasehold interest from the CoH in the Waterfront of Hamilton,” he said. “The ground lease was granted by the CoH to allow the development of the Waterfront.”

Mr MacLean explained in that same affidavit that he settled and is the main beneficiary of the Allied Trust, which was established on December 10, 2012.