A former Squamish Oceanfront Development Corp. (SODC) director is calling one of the project's selected developer's past dealings with the corporation into question. But municipal officials say there was no impropriety and are standing by their choice.
In 2008, Michael Hutchison, president of Bethel Lands Corp., was a director at the arm's-length municipal body. The following year he became SODC vice-chair and chair of the finance and audit committee.
Today, the Squamish developer, in conjunction with international development company Matthews Southwest Developments, is one of the SODC's successful applicants who answered its public call for expressions of interest.
The past connection raised alarm bells for Tom Bruusgaard. In 2011, Hutchison resigned from the SODC board and immediately submitted an unsolicited interim financing proposal to the board, he noted. In June of that year, the plan was presented and rejected by council during a closed-door Committee of the Whole meeting.
Hutchison was privy to information the public didn't know, Bruusgaard said, calling the optics of the action into question. At the time, the SODC was looking for a solution to its financial woes, he said. The corporation's credit line was close to exhaustion and banks were unprepared to extend credit without District of Squamish guarantees.
He had information that others didn't, Bruusgaard said, adding he wasn't the only one at the table who felt that way. Ordinarily a director would not do a thing like that. I thought it was wrong and could not support it.
Now Bethel is back at the table and Bruusgaard is pondering why, especially after the company's first proposal was rejected.
While a board member would have insight into a corporation's operations, the information may or may not be useful, said Heather Jones, a partner of Sager Legal Advisors, a West Vancouver law firm that deals with municipal matters. These sorts of callouts have specific parameters and, if done correctly, should screen for fairness, she said. Companies often seek out people with knowledge pertaining to proposals, Jones noted.
Under the Business Corporations Act, directors are allowed to remain on a board while the same individual is involved with business transitions with the corporation, Jones said. The board member must declare conflict and not partake in voting that could influence their dealings, Jones said.
There are no rules that disallow either of Hutchison's proposals, Coun. Doug Race said.
It wouldn't have mattered if he'd stayed on the board, he said.
Developers do a significant amount of due diligence, Race noted, adding they would know all the information that board members knew. The only documents not made public pertained to personnel matters, Race said.
If he had a better sense of what the community was looking for, well, then who gains from that? he said.
The SODC carried out a control process when selecting a developer, screening for bias, district officials say. The SODC received seven expressions of interest from its open call. Two of those met the board's evaluation criteria. Both proposals had local connections, district officials said in a statement.
Shortlisted developers submitted requests of proposals and had full access to all SODC documents, consultant reports and studies to complete the necessary due diligence before submitting full proposals, the release noted. To keep the process fair and unbiased, council was not told of the names of the proponents until a presentation to council on Oct. 8, 2013, the district stated.
Council chose the proposal that presented the most comprehensive and financially appealing offer that also brings international development experience and new investment to Squamish, Acting Mayor Patricia Heintzman said.
Bethel's initial proposal was rejected because it didn't follow necessary public process that any solicitations for proposals would require, district officials stated.
It was the responsibility of the SODC board to bring any proposal of this type to council for consideration, Heintzman said. It was also justifiable for council to reject it in favour of a more objective, inclusive and broad-reaching process.
On Tuesday (Nov. 5), Hutchison said Bethel's original offer was one solution for the district to remove itself from unwanted financial risk, not a move to overtake the board. He said he was unable to comment on the current proposal as he's about to enter negotiations with the SODC and District of Squamish.
A negotiating team is to be announced before the start of talks scheduled to begin on Wednesday (Nov. 13).
