CIG gives up $25M for Beach Bay hotel

| 25/09/2015 | 119 Comments
Cayman News Service

(L-R) Tourism Minister Moses Kirkconnell, Premier Alden McLaughlin and Beach Bay developer, JD Layton

(CNS): The government has given a duty concessions package to developers planning a 5-star hotel in Beach Bay, Bodden Town, worth some $25 million, as officials said that in the long run the public purse and the local economy will get back the money via other taxes, job creation and economic growth for the district. Premier Alden McLaughlin said the talks with the developers behind the proposed resort had been long and difficult as a result of the precedent-setting packages given away by the last administration.

At a press briefing Thursday morning, the premier revealed that negotiating with Beach Bay Land Ltd, the investors who have been talking about developing a hotel and condo resort on the coast in Lower Valley since 2008, had been tough. He said that because of the deal struck by the UDP administration with Dart, giving away 50% of future accommodation tax among many other concessions, talks had been challenging.

“It’s been a long road to travel but we have been in intense negotiations for the past two years but today we are seeing the fruition of those efforts,” he said. McLaughlin added that the concession packages given away by the previous administration “skewed the market” and created “expectations that had to be managed”.

He said that CIG was lucky in this case with the developers, who seemed to be reasonable and understood that the government could not continue that level of tax concessions with tourism development.

“The room tax issue is one that has the capacity … if you wind up waiving … you skew the market and create real issues for competition but once we are able to reach that level understanding, we are able to break through and get to where we are.”

He said the CIG had been determined not to end up with a laundry list of complex concessions and so settled on a 12.5% concession rate on the cost of the development, which is estimated to be around $200 million on materials during construction.

Alongside the duty concessions on construction materials, stamp duty concessions on land being purchased for the development and a commitment to using Caymanian workers, local businesses and subcontractors has also been written into the contract. McLaughlin said that in addition to it being a legal requirement that local workers take precedent, it was also part of the deal. The agreement has a target of 60% local participation.

The American developer behind the proposed project, JD Layton, said that his firm had a track record in the past of achieving local employment objectives and goals in other jurisdictions and said he was committed to putting in the work necessary.

“I believe we will have similar success here,” he said. “These things don’t happen by accident; they take work, they take focus, they take commitment on the part of the developer and the government.”

Tourism minister Moses Kirkconnell said that the developer had made it clear he wants local involvement and pointed out that unless the local community benefits, the project will not be a success. He said Layton was committed to supporting the hospitality school as well and taking the commitment to local benefit seriously. Unable to directly compare the concession package to that given to Dart or other deals government has struck with private sector developers, Kirkconnell said this agreement was tailor-made to suit this project.

The first major hotel resort to be constructed in Bodden Town, the $200 million proposed 5-star as yet undisclosed but branded resort is being dubbed St James Point. It is expected to be a game changer for the Bodden Town economy that will fuel support businesses.

The premier said that the developers would finance the public road to the resort across the land they own in the area, but it will be the National Roads Authority that will then pick up the tab for the rest of the road that will link the resort to Manse Road and the heart of Bodden Town, opening up access to more land in the area.

5-star resort expected to bring new life to BT

See the agreement below

Beach Bay Lands Development Agreement, signed 24 September 2015

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Category: development, Local News

Comments (119)

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  1. Fantasia says:

    Visit the website. Based in the exterior renderings, they are proposing a post-Epcot, Tom Swift Revivalist theme. With bougainvillea.

  2. Anonymous says:

    Here is an idea. Make any duty concessions kick in once the place is built and a certain number of people are locally employed.

  3. Anonymous says:

    When is the east-west arteriel road going to begin? Sick and tired of driving through the regular route . Slow like a turtle.

  4. Anonymous says:

    The longer Alden is in office the more he is turning into Mac II.

  5. Anonymous says:

    Hope they have good insurance. Storms on the south coast. Hmmm.

  6. Anonymous says:

    What are they thinking??!! Has anyone seen the beach? The developer is saying the “first stage” will include a 200 room hotel and 75 condos. Let’s think about this. Minimum of 400 people (assuming they expect the hotel to sell out in season) on a small beach that goes nowhere. Talk about crammed sardines. Nice get away for a peaceful vacation, away from the hustle and congestion on Seven Mile Beach. Really?

  7. Anonymous says:

    One thing that is becoming frighteningly clear to me is that very soon there won’t be anything left of Cayman to give away to foreigners in exchange for concessions to foreigners.

  8. Anonymous says:

    5 star service and high levels of local employment are mutually exclusive aims. Let’s hope the hotel is not forced to compromise customer service.

    • Bacco Bull says:

      $25Million ok Aldin is this contingent upon your people guaranteed jobs or just another idiotic move on govt’s part?

      • Anonymous says:

        Curious about the training that should be put in place to ensure that locals are employed. Wait and see how many of the inherited status holders and their entourage will fill those positions. Then you will see flights coming in loaded with you know who.
        This is the oppurtine moment for Caymanians to prepare themselves for employment, especially in Bodden Town. Our young people who are so laid back should see this as their gold mine.
        Who is going to start having meetings on this very important project and making the residents aware of job oppurtuinites?

  9. D. Wayne says:

    Just what is Mr. Layton’s track record for other projects? If it’s so good, why don’t you tell us about it. I HATE the way our government is so secretive, or could it be they really don’t know!

    • Anonymous says:

      John David Layton is a Managing Director at Melkonian Capital Management. Mr. Layton has over 20 years experience as an executive, a project manager, and a superintendent for numerous commercial, institutional, and residential projects in the New York Metropolitan Area and the U.S. Virgin Islands.

      Previously, John spent five years operating a real estate development company, Ironhead Enterprises LLC, where he was the principal. He developed from ground up or rehabilitated several projects in Manhattan, the most recent of which is Gramercy 145 on Lexington Avenue.

      From 1996 to 2004 he served as Project Executive, Project Manager, and Construction Superintendent at HRH Construction LLC, a leading construction management firm in New York City that had over $150 million of construction work under management annually.

      John received a B.A. degree from Lehigh University in 1984 and an M.B.A. from Columbia University in 1998. Mr. Layton is also involved in a number of philanthropic and community activities including Boy Scouts of America, New York Open Judo Tournament, and is President Emeritus of the Friends of Morningside Park.

      • Anonymous says:

        Which begs the question ‘Why is he putting investors’ money into a risky project like this when Cuba is on the verge of opening up to US investments that potentially offer a much higher and safer return for a much lower initial outlay?’ There’s something screwy about this.

        You also might like to take a look at his two previous companies. HRH Construction LLC went belly up in 2011, although that was long after he’d left by all accounts it got very messy. Ironhead Enterprises LLC’s listing reads that the company had an annual revenue of less than $500,000 and employed a staff of approximately 1 to 4. Hardly encouraging credentials for project of this size.

      • Anonymous says:

        Seems to me our premier is a victim of experience gained by Mr. Layton at Ironhead Enterprises.

  10. Anonymous says:

    If one considers that perhaps half of a 200 million project would be spent on dutiable materials at a duty rate of around 25 percent then i would say this guy has walked away with a very minimum of 100 percent free duties on the project. One is left to very seriously wonder exactly what other handouts this man was expecting from this country that were avoided through long and difficult talks.

    • Anonymous says:

      When do I get a duty concession? Ho I forgot the government can not gic\ve concessions to poor people.

      • Anonymous says:

        Thats right buddy, you got to bring at least 200 mil to the table. Prove to them you’re the last person on earth who needs a concession and it’s yours.

      • Anonymous says:

        It baffles me, why, and how no conssessions are offered to CAYMANANS? Some of us struggle day after day to try and do business here and we are not fortunate to get assistance, not even recognition at times. Totally ingnored, not only now, but in the past. Shouldn’t we get a slice of the economic PIE?

  11. Anonymous says:

    WOW. 25 mil. after” long and difficult” talks. Seems to me this guy was asking government to build the place and hand him the keys.

  12. Anonymous says:

    This government is no different from the last one they both giving away the country to expat developers while Caymanians suffer everyday. PPM are continuing the same methods of UDP

  13. Anonymous says:

    Here was how to manage expectations – refuse the duty concession request. Dart could have been a one off, but now Alden has set the precedent for it to be the norm. Pathetic.

    • Judge Watchya says:

      l see whats going on we are being sold as pawns by every government.Alden is the same s Mckeeva! We need new blood in office young blood that feel the crunch of the abuse by these ole boys.Stop electing. people that have never cared about you.remember Alden track record on jobs for Caymanians is a rotten potato! since he is involved l guarantee you There Will be NO JOBS for Caymanians !

      thats how he operates he turns his back everytime issues providing jobs for his people arises!

    • Anonymous says:

      You are so right. Government needs to learn to squeeze these kind of people’s balls harder than theirs are getting squeezed. When a ‘developer’ invests millions in buying property and planning they are hardly going to back out because they cant have their greedy way. And if they do back out the worst that can happen is they sell their property and plans to another developer until we have one prepared to do as the Romans do when they are in Rome.

  14. Anonymous says:

    Nothing wrong with concessions…..but the stamp duty waver is worrying….what if they don’t build and just flip the land later…esp after gov builds the access road.
    .

  15. El Tiempo Gigante says:

    Caymanians ain’t going to get $#@* another pie in the sky! On the other hand putting the road from Manse Road to Beach Bay is going to set off one land war of the century that I want to see PPM negotiate their way out of????

  16. Anonymous says:

    -[;p’]
    Has anyone especially the gov’t even considered or cared about how the residents of Beach Bay feel about a 10 storey Hotel and Resort being built in their neighbourhood? Most Residents have built their homes and lived in the areas for many years in piece and quiet. They have commuted in one hour traffic to GT and seven mile beach specifically to be away from resorts, tourists, noise , music etc. Every decision gov’t has been making has gone out to district meetings, why haven’t the residents of Beach Bay been heard. Residents have been fighting this type of development for years. Every developer states the same thing over and over and gov’t believes them. More employment for Caymanians? Where are all the Caymanian at the Marriott, Ritz, Westin, restaurant servers/chefs/managers, housekeepers, landscapers, maintenance, reservations? Where are all employed Caymanians? All the surrounding residents will NOT have access to the beach. A beach which is a turtle nesting habitat? Where are they going? Are they going to dredge to increase the beach? What about the reef? Are they going to be destroyed with all the construction run off? Where is the DOE.?

    • Anonymous says:

      This is so true! I wonder if the DOE will allow for diving, fishing, and everything else? The BT district is the only one proposed in the new marine conservation with 0 protected areas within their reef, coincidence?

  17. Anonymous says:

    Stop whining about things you clearly don’t understand. Government is not GIVING away anything. Without development and investment of this nature, you can kiss your hand-outs goodbye. Without appropriate concessions there will be no development. This is a better deal than the Kimpton one.

    • Anonymous says:

      Why are you all getting so worked up over this project? It will never happen. Just google the developer name and you will see why. We have a better chance of an air craft carrier anchoring in George Town harbor and flying cruise ship passengers to shore.

      • Tee'd Off says:

        And there I was planning on booking a room as soon as the cruise dock was built and the new Frank Sound golf course opened. Now you have ruined everything with your negativity. Thanks a bunch!

    • Anonymous says:

      Mac K did an excellent job, when he gave away our forefathers rights. Weren’t most of you pleased about the? Gave away our birthright. And he is the most honorary, isn’t he? Bias hypocrites.

  18. Anonymous says:

    ‘…this new hotel will create well over 1000 jobs, who gets the jobs? Caymanians or Foreigners? ‘ -10:40 am

    Do you really have to ask? “The agreement has a target of 60% local participation.” wink, wink.

    Watch their words “TARGET”, but not a commitment.

    In reality, they rubbing their greedy little hands together on the projected increase in CIG revenue from the new construction worker Work Permits, then after construction is complete, more Work Permit revenue from what will be newly imported Hospitality Staff workers.

    “Sorry bobo, we can’t help ya with a job and we going make it against the law to give you any little tuppence out of our own full-pockets, anti-corruption you see. But since you a Caymanian, have you gone to apply at the welfare office?” – YOUR Elected Members

    • Anonymous says:

      If Caymanians would work a normal work week without dicking off on Friday, sitting down on the job (sun too hot, man) and coming in hung over on Monday they would get more jobs. Ask the born Caymanian bosses of small businesses why they don’t hire Caymanians and they will give you an earful. But it does not apply to everyone. Billy in East End seems to run a tight ship with his crew of labourers and they appear to get regular work so it can be done but there are some pisspoor workers out there expecting to get big money just because they are Caymanian.

      • Anonymous says:

        7:17. You are so right. If they would disallow cellphones on site more work would be done. Workers have no conscience and do not realize how much time is wasted on the job, which reduces production, yet the employer has to pay for the wasted time time by the hour. Fair play for all, square pay for all.

      • Anonymous says:

        Which is why Cayman needs a proper vocational school for High School graduates… There are more Caymanians than just the ones you all keep calling lazy and blah blah blah.

  19. caymanaindonkey says:

    I am about to purchase a 500k house, as a Caymanian that has a business established for the last 30yrs on the island, employs Caymanians, pay duty at customs when I come back from holidays, pay all my T&b fees, license my car, pay insurance for my staff and of course spend about 15k pm in bills.
    Will you Mr Premiere please allow me to get a break on the stamp duty on my soon to be new home?
    Here we go again, I recall the PPM bitc… About big Mac giving breaks and they are doing g it… WTF.

    P.S I will not be paying stamp duty!

  20. Sally Rae says:

    Seeing that this new hotel will create well over 1000 jobs, who gets the jobs? Caymanians or Foreigners?

  21. Anonymous says:

    ALden moses you give away $25 million concessions and blame Mac for it?! Let’s make sure we vote the whole lot out come 2017…. rotten to the core PPM will make sure their cronies get all the contracts. Bloody vote buyibg that’s what this concession is.

  22. SAM says:

    Someone has written about the Cayman Islands
    I can never get used to these types of places. If heaven is even remotely similar just give me a date and a time I’ll be sure to arrive!
    And what do you do? Sell it cheap.

  23. Anonymous says:

    “Transparency” is not trusting that these real estate geniuses negotiated the best possible deal, it’s actually making the document public.

    • Anonymous says:

      Isn’t clicking on a link to read the Agreement transparent enough for you? If you cant even figure that out, what hope do you have of understanding it? SMH.

  24. Anonymous says:

    Silly me, I am building a middle class home and so far I have paid planning fees, infrastructure fees, coastal works licence fee, generator fee etc….and duty on all materials.

    I should have had my daughter do up a nice drawing of a hotel and brought it to govt to ask for concessions.

    • Anonymous says:

      Exactly. I have no problem with the government giving concessions to the rich developers in the hope of getting jobs etc. But I do have a problem when they try to recoup the lost revenue from the poor man. Why did they add infrastructure fee in areas/cases where it did not exist before effective immediately? At least give notice so people in the process could push to meet a deadline before the fees were added.

  25. Anonymous says:

    Some folks just can’t be please no matter what! Everyone is crying that there needs to be more development, especially more development in the Eastern districts! Now you are complaining over a duty concession which is pretty much standard around the world in order to attract developers and businesses.

    The same way people lamented against the Shetty Hospital and now plenty residents have already experienced the benefit of being able to get complicated medical procedures/surgeries done on Island rather than having to take a lengthy absence from work to accompany a loved one on an expensive medical trip overseas.

    Pull your heads out of your backside! Cayman is no longer a premium destination or a preferred place of investment. There are many other places around the world investors can go and just wait and see what will happen once Cuba opens up.

    I am not pro-development at all cause, in fact, most of the time I am anti development especially in the 7 mile beach area as I believe that area is more than saturated now, however at hotel in the Eastern Districts is badly needed. Try separating the good from the bad and don’t automatically complain just for the sake of complaining.

    • Vinda Loo says:

      When you say “Shetty Hospital” are you referring to the 2000 bed XXXX that was presented in order to receive the desired concessions and legal changes, or what was actually always the intent as we see it now?

    • Anonymous says:

      A trend being “pretty much standard around the world” does not make it right or moral. This is a basic bully attitude that ensures that the rich keep getting richer at the expense of the less rich. It is not God Almighty’s will that the gap between the haves and have nots of this world continue to widen and this is precisely what this type of business ethic continues to promote in our world. It is greed in its most basic form and is a classic example of the love of money being the root of all evil. This is GOING to change in our world wirh the help of Almighty God.

  26. Anonymous says:

    I just hope that Government actually got something in writing to ensure that the project needs to be constructed top to bottom by existing local companies, not some companies that all of the sudden magically sprout up!

    I also hope that they have stipulated a ratio of Caymanians vs work permit holders those companies must have along with a ratio of Caymanians vs work permit holders employed by the hotel once open at ALL levels (ie management and support staff).

  27. Da Real G says:

    My only hope for him and this project is that they gets rid of that little “commitee” he has consisting of freeloaders PPm profiteers and no Use Ex MLa’s and their PNA underlings cause that project is head for real trouble fast.

  28. Spent says:

    No one looks too happy in the picture. It reeks of morning after shame and loathing following a wild night of indiscriminate reveling.

  29. Jane Doe says:

    Wow! $25 million? This is a disgrace. And you readers complain about single mothers receiving social services? How ’bout this corporate welfare? The rich helping the rich get richer. Thank you Moses.

    • Anonymous says:

      Why is a single mother automatically entitled to welfare? That’s the mentality on Island which got the place to where it is now.

      • Anonymous says:

        Why are pinstriped, wingfoot, slick haired financial types automatically entitled to government bailouts and incentives (IE welfare)?

        • Anonymous says:

          more of a rebate to spending a few hundred million in Cayman

        • Anonymous says:

          Because they’ve already invested $50 million, are investing $200 million more and have a bona fide business plan that includes 1000 jobs. What are you bringing to the table? yeah, thought so!

          • Anonymous says:

            We’ll see. Anyone can pull numbers out of their a$$ and we have been down the yellow brick road countless times. But our gullible politicos take the hook every time.

            • C'Mon Now! says:

              Yes like the Cayman Ice Palace, notice how that has gone silent. I can’t believe Kurt actually got up to speak about that pipedream a few months back…

          • Anonymous says:

            Foreigners hiring foreigners and the money gets transferred off the island. Who benefits? They import everything to build and decorate with and they import the labor. Who benefits? The Lodge?

      • Anonymous says:

        why is a developer entitled to concessions?

    • Anonymous says:

      $25 million in concessions from an investment of $200 in just the first phase still leaves $175 million spent RIGHT HERE! What would you rather, don’t give the $25 mill and don’t have the $175 mill contribution either? Oh! and that doesn’t include the money that will be paid for years to come in Government taxes, salaries to workers, etc etc. That kind of ‘welfare’ makes perfect sense to me. Using your example, how much do we get back from single mothers? Hmm… thought so.

      • Anonymous says:

        Thank you for some common sense for once in these comments.

        • Anonymous says:

          How’s THIS for common sense: The fact that these people have more money than the large majority of businesses struggling to survive and pay government dues in Cayman really should mean that they should be required to pay MORE dues than everyone else since they obviously have the means to do so and the size of their investment will ensure very decent returns in the long run. The very same goes for the ever loving Mr.Dart.

  30. Anonymous says:

    Diletants are running this country and selling it short. Natural resources are priceless and a rare commodity. Charge a premium, not the other way around.

    • Anonymous says:

      This is not New York or Miami, and it’s the kind of deal that gets done everywhere. If it gets more Caymanians working, great, but if they can’t find Caymanians who want to work, or turn up and do the job they were employed to do, I really would not be surprised.

  31. Mel Konian says:

    Couple of hedge fund managers building a hotel? This will get interesting if nothing else.

  32. gray matter says:

    What about the small businesses owned by Caymanians , where is our concession of import duty reductions as the US$ costs more to obtain. This government is a joke.

  33. Anonymous says:

    What about the court case taken against Beach Bay Land Ltd by the owners of the condos already on the site? Has that been settled?

  34. Anonymous says:

    This government is giving away the country. A developer who failed to pay about 6 million to government in the past has now been given new concessions on a project south of George Town. Now this deal for another developer.

    Yet if you ask why simple things like putting up new speed limit signs can’t be done, they scream “we’re broke!” our infrastructure is going to hell because we can not afford to fix it. Yet one of the many reasons we are broke is because the rich and ultra rich developers are not being forced to pay their fair share. This puts the burden on the regular citizens. It is an unfair and will ultimately be our down fall.

    • Anonymous says:

      You can thank Mac and Dart for this. NOT this government. The previous government set the precedent..

      • Anonymous says:

        This government is continuing the practice. I have to pay my fair share of duties and fees to live and work here in my country. government can give away millions in concessions yet can not afford to pick up my trash but once a week because they have no money. they can pass laws but not afford to enforce them because they have no money. They are carrying on the Mac tradition.

      • Anonymous says:

        Another ppm donkey hard at work. Do you lot get paid by the hour or per post?

      • Anonymous says:

        How are you going to blame Mac for this? :/

        • Anonymous says:

          Because Mac set the precedent with Dart so why shouldn’t EVERYONE get those concessions??
          He also did it in secret and we didn’t find out about it for months until it was too late to do anything about it.

    • Anonymous says:

      Are you saying that the developer who did the Ritz and never paid the 6 million owed to the Cayman people has been given concessions on a new project???

      Please explain how that can happen. Is that individual hiding behind someone else?

      PPM tell me it is not true.

  35. Anonymous says:

    There will be no 5 star hotel in that area. It’s all smoke and mirrors like so many of these big announcements, no matter which party is in power. Only Dart delivers whether we like him or not.

  36. Nope says:

    Who owns all the land down in beach bay that this developer purchased 😉
    Cayman it keeps going and going and it’s about gone!

  37. Anonymous says:

    Unna doo lissen ta da PPM unna hear? UDP lowes unna n mista daat lowes unna too.

  38. Anonymous says:

    WHY on earth do people with all the money always want everything free? Oh, I almost forgot, that’s how they got all the money in the first place.

    • Cass says:

      With an almost non-existent middle class now and the rich making deals for only the rich, it makes you wonder if Legge was wrong for calling us corrupt.

    • Anonymous says:

      when is a 12.5% reduction on tax on money spent free? If your employee reduced your salary by 12.5% bet you would not think it was zero

      • Anonymous says:

        Seems to me you might have someting bass ackwards there friend. Apart from the fact that if i reduced your comments by 12.5% they would definitely be worth minus zero.

  39. Anonymous says:

    12.5% concessions for what, a promise? Where is the economic impact assessment? Can we see the agreement? Please publish both.

    Does this now define the CIG’s incentive strategy to encourage more Foreign Direct Investment? Will a Cayman consortium have access to a similar incentive package? Is there a threshold level of investment to access the 12.5% concessions?

    I am pro development, especially appropriate tourism development in the eastern districts to create employment and commercial opportunities for residents and land owners out there BUT…

    My bet is that we will get excuse after excuse for delay after delay and by the time this eventually opens, it will look quite different than the picture painted at the press conference.

    It will be interesting to watch how the PPM’s first development agreement for a new hotel compares to the UDP one. Mind you, the actual performance will likely have more to do with the respective developers than with the respective political administrations.

    Let’s watch this show carefully.

  40. Anonymous says:

    Did the business plan specify that it will be providing jobs for locals/Caymanians, or will this hotel need to recruit [mostly] foreign labor to operate it? Just asking–because its been a long-time trend to hire expatriate labor for Cayman-based establishments.

    • Anonymous says:

      The government encourages the hiring of imported labour. They love they Work Permit Revenue more than they love unna Caymanians. You betta belie’e dat!

  41. Anonymous says:

    Can you finish the school first lol

    • Anonymous says:

      12:23. For your information, this project is not an government project, so why should you make such a silly comment.
      Some people are so daft, they can’t see the forest for the trees.

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