Several board members at the Bermuda Housing Corporation quit after they were told a controversial Warwick housing development was to go ahead  — despite their warning that they were not viable.

A source close to the corporation when the controversial 2009 decision to push ahead with the Grand Atlantic project in Warwick said: “The entire housing corporation board voted unanimously against the project.

“In fact, some people left the board after the decision was made.”

The source added there were “a number of reasons” board members red-carded the plan to buy 78 of the units at the site, with an option to buy the remaining 47 later if sales went well.

The source said: “They are extremely small units and, for $700,000, you could not consider them low-cost housing. The board didn’t like the design or the cost.

“In addition, the housing market had been saturated — there was no need for it. They were probably better qualified to understand these matters at the time.”

Cheaper and larger units at Harbourview in Southside — a development that had been cut back from the original 100 units to just 60-70 — had also not sold out, pointed out the source.

The source said that the Bermuda Housing Corporation (BHC) mandate was to provide “housing for people that couldn’t afford to get into the normal market.

“There was supposed to be a hotel and that was way off the scope of the Housing Corporation.”

The source, said, however, that the board was told Cabinet wanted the plan to go ahead and brushed aside objections.

The Minister responsible for the BHC at the time was Lt Col. David Burch, while Dr Ewart Brown was Premier.

The source added: “I know of two members who resigned for sure — one quit almost immediately and one quit some time later. I’m not sure what happened after that.”

The news came after OBA Community and Cultural Affairs Minister Wayne Scott, who now holds the BHC in his portfolio, told the House of Assembly that demand and prices in the real estate market were already dropping in 2009 as the recession hit home.

He added: “The Corporation was advised that the Grand Atlantic project consisted of a very important tourist component and in order for the tourism component to be viable, a development was to be built.

“The BHC was informed that with the sale of the housing units, the land could then be used as collateral to finance the building of the hotel.”

BHC eventually bought 78 of the units — only one of which has sold — and Mr Scott said “there is no intention” of taking up the option to buy the rest”.