By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government proposed a 21-year lease of reclaimed Crown Land at Nygard Cay to its fashion mogul owner, with an annual rental rate pegged at $25,000.

Documents obtained by Tribune Business reveal that the Christie administration sought to justify the lease on the grounds that it was needed to support an “estimated $50 million touristic development” at Nygard Cay.

The August 3, 2012, letter from Richard Hardy, the Department of Lands and Surveys’ acting director, provides the first concrete confirmation that the Government was assessing its options for granting a Crown Land lease - the issue at the heart of recently-launched Judicial Review proceedings.

The letter, described as a Memorandum, does not go into detail about the nature of the tourism project proposed by Peter Nygard for his Lyford Cay property.

However, the $50 million sum referred to matches the figure discussed at a meeting between Mr Nygard and Bahamas Investment Authority (BIA) officials, which was held two months’ prior to Mr Hardy’s letter.

Previously obtained notes of that June 2012 meeting revealed that Mr Nygard was proposing a $25-$30 million investment to rebuild his fire-destroyed Nygard Cay home, with the balance earmarked for a stem cell research and treatment facility targeted at medical tourism. It would thus appear this proposal is what Mr Hardy is referring to.

Mr Hardy’s memorandum, addressed to the permanent secretary in the Prime Minister’s Office, and which bears the director of investments’ (Joy Jibrilu) stamp, dated August 15, 2012, is headed: ‘ Proposed Lease of Land at Nygard Cay for a proposed touristic development’.

Referring to an August 1, 2012, missive he had received, containing two proposed “plans”, Mr Hardy disclosed that the minister responsible for Crown Lands - who is Prime Minister Perry Christie - had decided to lease a portion of the reclaimed seabed at Nygard Cay to Mr Nygard.

“It is noted in your second paragraph that the Minister Responsible for Crown Land has determined that appropriate acreage should be leased to Mr Peter Nygard to facilitate the proposed estimated $50 million touristic development,” Mr Hardy wrote.

Referring to one of the lease options presented to him, Mr Hardy said the “area coloured red is recommended on a 21 years renewable lease basis, at an annual rental of $25,000, (with reviews after seven and 14 years)”.

The Lands and Surveys acting director then effectively confirmed the acreage involved was Crown Land reclaimed from the sea.

He added: “In effect, this recommendation is in respect of the property between the December 1984 high water mark and the June high water mark.

“It does not include those areas..... which are covered by water (other than the northern lagoon) and are tidal, i.e. (4.779 acres minus tidal, non-lagoon, areas).”

A handwritten note at the bottom of Mr Hardy’s letter says a proposal was expected imminently, and that all these details “should factor into Cabinet/National Economic Council papers”.

While there is no evidence to suggest that the Nygard Cay lease was a ‘done deal’, the contents of Mr Hardy’s letter are likely to reignite the controversy surrounding its Canadian owner’s construction endeavours.

This is because the Save the Bays coalition, in its Judicial Review action, is challenging the Government’s alleged failure to prevent “unauthorised development” at Nygard Cay - the same development it claims has resulted in the seabed reclamation subject to the Crown Land lease.

In effect, if the coalition’s allegations are correct, the Christie administration’s plan to lease the reclaimed Crown Land to Mr Nygard, under cover of facilitating a tourism development, would be tantamount to legitimising/sanctioning wrongdoing.

Mr Nygard has argued that his Simms Point property has expanded through natural accretion, but this has been dismissed by both Save the Bays and the former Ingraham administration.

In the Attorney General’s draft defence and counterclaim, filed in response to a legal action initiated by Mr Nygard, the former government sought a court declaration that the Canadian fashion mogul had unlawfully “trespassed” on Crown Land through his construction activities.

Implying that Mr Nygard lacked the relevant permits and approvals, the Attorney General’s Office had also sought a court Order requiring Nygard Cay’s owner to remove - at his own expense - all the groins, docks and seabed infilling he has allegedly carried out, thus returning the coastline to its original 1984 boundaries.

The Christie administration’s Crown Land lease proposals thus represent a stunning U-turn on the position taken by its predecessor within three months of the 2012 general election. The $25,000 annual lease payment, which over 21 years would amount to a collective $525,000, also pales into insignificance alongside both the Government’s fiscal deficit and the alleged $25-$30 million valuation Save the Bays has placed on Mr Nygard’s reclaimed Crown Land.

And the coalition had previously warned that granting Nygard Cay’s owner his much-desired lease would set a bad precedent, sending signals to Bahamian and other foreign landowners that they could ‘do as they pleased’ with respect to developing their properties without reference to existing laws and regulations.

Further evidence that the Government was contemplating a Crown Land lease to Mr Nygard is contained in the August 16, 2013, affidavit by Hyacinth Smith, an attorney in the Attorney General’s Office.

The affidavit, sworn in support of the Government’s bid to have Save the Bays’ Judicial Review action thrown out, refers to “the consideration of any lease options by the Government” in relation to Nygard Cay.

Other documents filed in support of the Government’s application, though, have also revealed previously unknown facts related to the Nygard Cay situation.

• The former Ingraham administration obtained two $2.7 million-plus bids from construction firms to return Nygard Cay’s size, and coastline, to 1984 conditions. The work, it told Mr Nygard, would have to be paid by himself.

• The Christie administration issued Mr Nygard an annual dredging permit, via the Department of Lands and Surveys, for the period June 13, 2012, to March 12, 2013. The issuance came just six weeks after the general election.

A transcript of the court hearing at which Save the Bays obtained permission to file its Judicial Review action saw its attorney, Fred Smith QC, disclose the contents of a January 9, 2009, letter sent by the then-government to Mr Nygard.

Referring to talks with the fashion mogul’s then-attorney, Sidney Collie, the Government said it was its “intention to cause the coastline at Simms Point... to be reinstated”.

It added: “The Government has sought and obtained bids from two suitably qualified firms, Tycoon Management and Bahamas Marine Construction, in the amount of $2.75 million and $2.73 million respectively, to undertake the proposed reinstatement work.

“The two bids are being reviewed, and you will be advised of the successful bid shortly. It is the Government’s determination that the full cost of the work be borne by you.”

Tycoon Management is headed by James Curling, while Bahamas Marine is part of the Mosko Group of Companies.

Ms Smith’s affidavit for the Government, though, questions the “bona fides” behind the Save the Bays’ Judicial Review claim.

She alleges that the action is nothing more than the latest extension of the battle between Mr Nygard and his Lyford Cay neighbour, hedge fund billionaire Louis Bacon, who is a prominent member of Save the Bays.

This, she added, “throws doubts on the bona fides of the Judicial Review claim”. And the application’s reference to the Bahamas Investment Authority meeting “speak clearly to the collateral interest of the coalition in opposing the consideration of any lease options by government with respect to the Nygard Cay matter, and a stem cell facility connected to Mr Nygard”.

All three of the Government, Mr Nygard and the latter’s attorney, Keod Smith, are seeking to have the Judicial Review action dismissed on legal technicalities.

For example, the Attorney General’s Office and Mr Smith are alleging that in obtaining leave to file its Judicial Review action at a hearing where only it was present, Save the Bays and its attorneys failed to properly disclose all material facts relevant to the case.

Indeed, Mr Smith’s summons blasted those behind the Judicial Review action as “busybodies with misguided complaints”.

Mr Nygard, for his part, wants the injunction halting all further construction works at Nygard Cay thrown out on the grounds that he is not a public official or body subject to Judicial Review. He is also seeking damages for the injunction.

And the Attorney General’s Office has blasted the document discovery order imposed on the Government as a “fishing expedition”.