The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian engineer yesterday accused two of New Providence’s top developers of “weaponising” development restrictions in a bid to “control” other projects and potential competitors.

Nick Dean, principal of Integrated Building Services (IBS), told Tribune Business he is “a bit disappointed but not surprised” that New Providence Development Company and its affiliate, Old Fort Bay Company, have appealed to the Supreme Court in a bid to prevent his 30-unit Azumi residential community from progressing.

Describing the move as “financial bullying”, he argued that New Providence’s largest landowner and its subsidiary, which developed the Old Fort Bay community, were trying to crush him into submission through a time-consuming and costly legal process. However, pledging that he is “undaunted”, Mr Dean promised: “I’m not backing down. I’m hanging in there and will see this one to the end.”

The two developers, in their September 11, 2024, legal filings are urging the Supreme Court to “quash” both the previous Town Planning Committee and Subdivision and Development Appeal Board decisions that separately found in favour of Mr Dean and rejected their bid to block his western New Providence project from proceeding.

Both regulatory bodies have backed his call to extinguish restrictive covenants imposed by Old Fort Bay Company when it sold a three-acre parcel - located between Charlotteville and Old Fort Bay - to Mr Dean’s father some 26 years ago in 1998.

These limited the site’s development to two private residential dwellings of “no more than 3,000 square feet each” and, if not removed, would halt Mr Dean’s ambitions to develop Azumi and do his part to help ease New Providence’s housing shortage. Site plan approval, as well as rezoning from single family to multi-family, was also approved despite opposition from Old Fort Bay Company and its parent.

However, the two developers alleged in their Supreme Court filings that there are “other restrictive covenants” attached to the original conveyance that sold the land to Mr Dean’s father which “will have the effect or restricting, or preventing entirely, the proposed development”.

While the legal papers did not identify these other covenants, New Providence Development Company and Old Fort Bay Company laid out three grounds upon which their Supreme Court appeal is based. Most prominent among these is their argument that restrictive covenants can only be eliminated as part of a process that involves zoning changes.

Pointing out that zoning by-law reforms can only be approved by the minister responsible for town planning, in this case the minister of works, the two developers are thus arguing that the Town Planning Committee and Appeals Board have no legal powers to extinguish the covenants complained of by Mr Dean and thus their decisions are “ultra vires” or illegal.

Launching an impassioned defence of restrictive covenants, which are typically used to guide the nature, type and scale of development at a particular location, the duo said: “This appeal involves a point of very important constitutional principle: The extent of the powers of the Town Planning Committee to interfere with, indeed to totally destroy, a bargain made between two parties which regulates the future use of land sold from party A to party B.

“Restrictive covenants and their use are, of course, common place not just in The Bahamas but throughout the world. In the real estate world, they represent a method whereby Party A may sell to Party B land but still maintain and exercise a degree of - sometimes very great - control over the use to which the land is put, or what may be built on the land.

“Of course, the imposition of such a covenant may sink a land deal or save such a deal. The imposition of such a covenant may dramatically affect the price at which the land is sold. In short, restrictive covenants are a crucial part of the overall land deal and the bargain which is struck by Party A and Party B,” New Providence Development Company and Old Fort Bay Company argued.

“The existence (or non-existence) of a restrictive covenant may have a determinative effect on whether the land is an attractive proposition to buy and a determinative effect on the price paid. Not only that, the existence of a building scheme, whereby multiple parcels of land are all the subject of the same restrictive covenants, may have a determinative effect on the attractiveness of a parcel of land where a prospective purchaser would be able to rely upon being able to enforce covenants burdening other parcels within the same building scheme.”

The two developers then argued that the ability for the planning authorities to extinguish such restrictions “is very heavily circumscribed” by the Planning and Subdivision Act 2010. They asserted that this can only be done via zoning regulations and amendments to these, “not as part of an ad hoc planning application” such as the one submitted by Mr Dean.

“It is obvious [based on the Act and its chronology] that the extinguishment of restrictive covenants by the Town Planning Committee is limited to within the zoning by-law process. Zoning by-laws are prepared by the director of physical planning under the direction of the director and then approved by the minister,” New Providence Development Company and Old Fort Bay Company argued.

“Accordingly, the Town Planning Committee acted ultra vires its powers. It had no statutory power to extinguish the restrictive covenant in this case. Its powers are entirely derived from statute, and in the case of the draconian and far-reaching effect of extinguishment of a restrictive covenant, that can only be considered as part of the zoning by-law process.”

New Providence Development Company and Old Fort Bay Company also alleged the Town Planning Committee has failed to show that the requirements for extinguishing the restrictive covenants were met. They argued that this was “an exceptional case” where the regulator should have given its reasons for approving Mr Dean’s application, and it “erred in law” by failing to do so.

And the duo also asserted that the covenant extinguishing request was not “part of the planning application” made by Mr Dean, adding: “Accordingly, the Town Planning Committee erred in failing to consult affected landowners and the wider community on the effect of extinguishing the covenant.

“Further or alternatively, the Town Planning Committee acted contrary to the rules of natural justice in failing to give affected parties an opportunity to make representations.” Mr Dean yesterday conceded that having to defend Azumi before the Supreme Court will delay the project’s development, but added that his 30-year career in engineering and construction has hardened him against such challenges.

“It’s unfortunate,” he said of the move by New Providence Development Company and Old Fort Bay Company. “I’m a bit disappointed but I’m not surprised either. It’s a case of trying to bog me down in legal fees and time. It’s basically financial bullying.

“I’m committed to getting this project completed, and I’m not backing down on this. I’m going to hang in there and see this one to the end. The reality is so daunting that either I’m going to fight this battle now or my daughter is going to inherit this and have to fight this battle later on.

“This is a case study in the type of restrictions that should be challenged and should be extinguished. This one serves a special interest; it doesn’t serve the public and should be extinguished.” Mr Dean said Mrs Lockhart-Charles, on behalf of her clients, had been “the lone dissenting voice” against his project and the covenants’ elimination at the Town Planning meeting with no objection from anyone else.

“We find ourselves headed into the legal system, but through the courts we feel the law is on our side. It’s par for the course, and we’re going to fight this one until we’re eventually victorious,” he added. “We’re confident that the law is on our side in this matter, and we’ll eventually come out victorious. It’s unfortunate that what they would hate to see most is a level playing field.

“It’s unfortunate that they’ve decided to go this route given that they know what it’s like to be a developer in this country; it’s not easy, especially for small developers. I’m very disappointed that they chose to fight us on this. I think they’ve effectively weaponised the restrictive covenants and are using it as a source of control over other developers who, at some point, may be competitors to them.”

Mr Dean said the authorities seemed to have understood that restrictive covenants could be employed as a “bullying tactic” which was why Town Planning had been given the power via the Planning and Subdivisions Act 2010 to eliminate them if justified.

“They allow someone to have a choke hold on their would-be competitors,” he told this newspaper. “In the long run, you cannot restrict development. One entity cannot have control over how development pans out for 40 years. The world has changed, the environment has changed and the country has changed.

“We should be allowed to add diversity. It cannot be one entity’s vision only that is allowed to be put forward. We’re not asking for anything undue. We’re just asking to be treated fairly, be allowed to put our project forward and let it rise and fall on the merits of the project itself, not what someone else believes should happen in western New Providence.”

While Azumi’s development will at the very least be delayed by the legal challenge, Mr Dean added: “I’m used to problem solving, financial challenges and overcoming. I’m not daunted. I’m disappointed. A developer should have the best interests of the community at heart.

“Obviously there will be a bit of a delay but I’m going to face it head on and see it through to the end. I’ve been a structural and civil engineer for 30 years, and I’ve been building for more than 20 years. I know how to build responsibly and have seen the ebbs and flows in different projects. This is just one challenge in the course of a project that we have to overcome.”

New Providence Development Company and Old Fort Bay Company appear to be concerned that a precedent will be set if Mr Dean succeeds in extinguishing those covenants. They have already chosen the Supreme Court route in at least one other planning-related dispute. This stipulates planning decisions can be disputed at every level of the Bahamian judicial system.

Despite defeats before both the Town Planning Committee and Appeals Board, New Providence Development Company is also asking the Supreme Court to overturn the approval granted for rezoning five acres near Lyford Cay owned by Henry F Storr from residential to commercial.

The electrical retailer is arguing that the rezoning will facilitate the property’s sale and enable it to achieve a higher price, but New Providence Development Company is arguing - in similar fashion to Mr Dean’s case - that the restrictive covenants imposed in the conveyance when it sold the property to Henry F Storr should remain in place and not be extinguished.

These battles, together with the Supreme Court’s verdict in the recent dispute between New Providence Development Company and the One West Plaza retail/office park’s developer, highlight what appears to be growing conflict over the former’s use of restrictive covenants to guide and/or limit the type or scale of development that occurs in western New Providence.

Sir Ian Winder, the chief justice, in his recent verdict on the One West dispute wrote that New Providence Development Company, in its role as the area’s master developer, has sought to use these covenants to “exert control” over the activities of other developers to protect its own interests and backed this up with “its ‘economic clout’”. The latter, he added, included refusing to sell extra land to others.

‘Restrictive covenants’ are now becoming especially challenging when the original purchasers from New Providence Development Company sell their properties on to new owners who have different plans for the site.