Ironwood duty deal signed but no road agreement
Ironwood Developer David Moffitt and Cabinet Secretary Samuel Rose sign the contract
(CNS): Government has entered into a duty concessions deal worth almost US$22 million with the developers of a proposed golf resort in Frank Sound but there has been no agreement on the construction of the East-West arterial extension. Under the deal signed by government officials and the developers of the planned Ironwood project on Thursday, the developers will recoup tax rebates on 6% of the $365 million project, which is expected to include an Arnold Palmer golf course.
Officials said the deal paves the way for work to begin on the resort, however the parties have not yet agreed how the road extension financing will work.
Premier Alden McLaughlin explained that the deal over the ten-mile extension to the gazetted road was taking longer than hoped as it was a “complex arrangement”, in which government was seeking to limit its exposure in the event that the road was not completed. Without going into the details of the issues, he described the talks as “challenging and intense”.
The goal is for the road to be paid for from the duty concessions given to the developer. In the meantime, whatever duties are paid will go into an escrow account. However, today’s deal allows for the developers to take that cash directly if an agreement cannot be reached within twelve months on the road construction.
The premier said that, given government’s goal of restoring public finances and tackling debt, CIG was not prepared to risk taking funds from existing revenue to use for the project and it had to come from a new revenue source. Despite the difficulties, both parties were optimistic that the arrangements for the road financing could be agreed and then submitted to the FCO for approval, McLaughlin said, adding that the deal had to be in the best interests of the people of Cayman.
Developer David Moffit from Ironwood, who previously said the road was a deal breaker because it was fundamental to getting people to the resort, said that while it was still important they had a greater level of comfort at present to move forward on the project, confident that the road arrangement would be in place at a later point.
Planning Minister Kurt Tibbetts said that with the commitment from the Arnold Palmer Design Company Ltd for the golf course, the road was not as significant to the project as it once was. The proposed 18-hole PGA championship golf course “puts a new dimension to the project”, he said.
The next step now is to submit the necessary application for planning permission for the first phase of the project, which includes the course.
The duty concession deal also includes a commitment by the developers to use local businesses and employ Caymanians, with a target of 60% of local workers on the construction project, the premier said. “Ironwood will also be required to provide regular reports on its recruitment of Caymanians during the course of the development,” he added.
The golf resort, if it goes ahead, will be known as Ironwood Village and the premier said it would provide “a much needed financial stimulus to the economy of the Cayman Islands”, as well as “job opportunities for Caymanians” and development in the eastern districts.
In line with other tourism projects, the developers were getting concessions on import and stamp duty to the tune of $21.9 million, which was equal to a maximum of 6% on the overall investment in the project, McLaughlin said.
“The income we receive for decades into the future from hotel room tax, visitor spend, duty from the sales of condos and more from all of these developments will more than make up for the concessions. And the jobs that will be created directly and indirectly from these projects will be an added economic benefit,” he said, justifying the tax-breaks.
CNS requested a copy of the deal Thursday morning, which is understood to be a public document, and we will post on receipt.
Category: development, Economy, Local News
The fact that the road deal did not go through seriously makes me question whether this development is going to move forward. A billion dollar development with poor access is doomed to fail. If they are not willing to invest the $60 million upfront and get it back through concessions, are they really serious about this project?
Even worse, is government is unable to close the deal on the road, which is the biggest benefit to the “average person” and general public. It’s bad enough they squander the billion dollars a year income and have no money for critical infrastructure improvements, so they have to rely on private investors to do it for them, and they can’t even close the deal. How incompetitent can you be?
At least Dart puts his money where his mouth is. Only a few weeks ago I read Dart made an agreement with government to extend the bypass to four lanes, and already they are clearing and filling the site. He gets it done, unlike CIG.
Let’s get something straight, if the golf course does not start what guarantees does the CIG have . If they commence the road and tjete is a snafu with the golf course then the government is saddled with the building of the road out of its own sour sweet pocket. So not a bad chess move.
Wow! An 18 Hole Gulf Course! Such amount of courses average 5000 to 8000 acres of land. I must say I am a bit bothered by them cutting down our trees in South Sound to turn it into a grass desert. And these trees serve as a buffer to high winds during storm season… smh … I just don’t know this government sometimes.
This deal wasn’t even officially announced to the public!
lol … a hot grass desert to serve the wealthy and elite people. I bet if you do poll on Cayman’s favorite sport, Golf wouldn’t even be in the top ten. This just shows you how our politicians think what’s best for the people. They are like aliens in their own country.
Bitter much? You munch turtle and we’ll play golf.
People pay to play golf, not Cricket…
Number 1, yep you earned that spot with the most idiotic comment on this thread. Congratulations.
Get your facts right Unison. It takes 150-250 acres to build a full length championship golf course, not 7,000. The course is not going to be anywhere near South Sound. And lastly the development was publicly announced last year with Arnold Palmer visiting Cayman.
If you can’t post something that is even close to accurate or relevant don’t bother.
South Sound??? Sounds like someone has his developments mixed up and is relying on dubious “facts” and assumptions…. Get all the info first before commenting… Right now the ignorant half info you are living off is just proving the phrase about being though of as an ass rather than giving people proof of the same…
Even if Ironwood isn’t built, Cayman still needs another road to get to the Eastern Districts. The traffic isn’t exactly becoming less. Next election, I’m voting for whomever makes this a priority. Another 5 years can’t pass with this being ignored and not budgeted for.
How many PPm supporters and their friends’ land holdings will go up because of this road – starting with Alden and his dad? Alden will tell you his dada is upset because of the road but he will not tell you the cost benefit i.e he is giving up a little land to increase his propoerty’s worth many times.
Apparently our leaders don’t know that America is booming, the economy is flying, we do not have to give concessions for anything.
After looking far and wide on Arnold Palmer’s website, http://www.arnoldpalmerdesign.com/news/
I cannot find any news about Cayman…hmmmm.
If I was the Premier or Kurt Tibbetts I would first of all confirm with Armold Palmer whether there was any truth that he was developing a golf course in Cayman, ask to see the plans and proposals, then I would advise Mr. Moffitt to go ahead with his development with one caveat and that is ” you have to build the road first” then at that time we would talk about concessions- about 3 percent!!
That’s because it’s not built yet. There is no reason to announce it yet. It’s best to save that news for later as a part of a larger marketing effort once work begins.
So this is the guy that still hasn’t finished Turtle Cove development on Palm Heights Drive? Ask the owners and tenants there about him!
I did, they all like him. Very nice apartments too, if I could I would buy one. What’s your issue or you just sh*t stirring with marl road knowledge???
Hmmmmmmmmmmmmmmmmmmmmm! Did u really ask me or my neighbours?!!!!! The guy is as useless as a chocolate fireguard. Never mind….will leave u to ur fantasies!!!!!
I know a few people there, they all love it
Have you been out there recently? It’s almost done!
Every single hotel developer in Cayman ( except Dart) has proved to be sweet talking salesman using other people’s money to get rich. Known XXXX like Ryan and now this developer with a dubious past mange to talk the govt – both PPM and UDP- into these ambitious deals that rely on private equity money. The so called ‘developer’ is nothing but a story teller who sometimes gets lucky. The cash flow projections of these PE deals are optimistic and are doomed to fail especially when the likes to Ryan skim off the cream off the cash flow. remember Ritz financiers took a 50% loss and Ryan got rich!! Same story here with this developer that PPM is getting in bed with ….
Your statements are about as factual as Trumps usually are. Sunshine Suites, Comfort Suites, Cobalt Coast, Morritts, Reef Resort, Grand Cayman Beach Suites, Caribbean Club,Holiday Inn are all privately funded hotels. You make a fool of yourself when you exaggerate…these are the facts. Larger hotels are funded by multiple funding vehicles as the start up costs are too large for individual investors. If the deal makes financial sense with a good ROI then it is a good investment, that’s all it is. We need inward investment that will be bring jobs and opportunity to the island as this project will do. This island should be renamed…Skeptic Island.
You cleverly leave out Marriot, Westin, Ritz, (the real big ones), each of whom has gone through receivership. Hyatt/ Cayman beach suites we all know has been embroiled in one controversy after the other because of the ‘developer’.Do you know that PE funds look at IRR ( internal rate of return) which dramatically improves in the beginning years if the developer gets close to the govt. and secures duty exemptions. That is the role of the Cayman developer – negotiate concessions from the govt – in this case PPM. You are obviously a PPM hack who thinks he knows ROI and economic trickledown …. but not quite.
IRR should not be used to rate mutually exclusive projects, but only to decide whether a project is worth investing in. When comparing mutually exclusive projects, NPV is the appropriate measure.
For hotel investment it is preferable to use multiples based on the enterprise value of a company and to compare ADR/REVPAR.
So true, so true. It’s hard to believe that our duly elected officials are so gullible. Surely they aren’t all dishonest and greedy! Or are they?
The developer would have paid all the duty and pay for the road if we had better negotiators.
The developer neither owns the land on which they propose to develop nor has the financial wherewithal to follow through so I highly doubt it.
“Make Cayman Great Again”
‘Job opportunities’ is a spin that government uses often these days to justify major expenditure of public funds. The use of the word ‘opportunities’ as opposed to guarentee is quite deliberate because it is a way of presenting a promise without actually promising anything. Government continues to pull the wool over the electorates eyes as they have always done. Politicians and especially those in Cayman are self serving first and foremost. I would like to see politicians truly serve their country with no remuneration, we will then see who is for the country and who is for themselves. The majority of elected politicians have no need for a salary, they are wealthy to begin with.
We must understand that politicians NEVER have enough money. Else why would they keep coming up with projects that would enrich themselves with little or no return to the average Caymanian. Golf, anyone?
Is this the same man who failed to complete the hurricane cleanup?
Just Another Day in Absurdistan
no – they did complete their contract for the ivan clean up. there is plenty of information on this on the compass site.
My heart breaks each day that I drive past the old Hyatt Hotel and the effect it’s neglect has had on the once iconic Britannia Golf Course. What a scar on this beautiful island. The owner of course has never been held accountable for the island’s brand damage. Sad.
Iconic? Britannia? It is a relatively plain 9-holer. Not seen much by way of great golf courses have you?
We never learnt from the ritz Carlton deal whereby the local people still owed in the tune of $6 million dollars and mr Ryan still driving around in his rover and developing our lands as if no wrong doing was done. Now we get in bed with some with a bankruptcy history. Once again we are as stupid as stupid can be. Let’s throw the baby out with the bath water.
All the things they accused Mac of, especially with Dart, they are doing now. I am a golfer. There will never ever be a “18 hole PGA championship golf course” in Cayman. There are so many factors against it, someone should be advising the Government. Maybe there will be condos etc. But forget the golf course, that is the developers pulling the wool over our naive politicians eyes.
I am intrigued, care to share your knowledge of why this is a sham?
common sense and basic economics…
Yes, and thousands of golfers and tens of thousands of spectators will not come. Where is common sense in this deal?
If they can put a PGA golf course in the middle of the desert why would you think they cannot do it in Cayman. Technology has obviously surpassed your cynicism. If everyone thought like you the world would still be in the dark ages…progress is a good thing.
Pfffffth! If THEY want to do it, let THEM pay for it! Then they might not have to kiss up to our politicians……. and vice versa.
We should do salmon fishing in Cayman, like the salmon fishing in Yemen.
Yep, if you have the deep pockets of a Sheikh Maktoum you can build a golf course in the middle of a desert, or a swamp, for that matter. Hey, Mr Webb managed to build a football pitch in one. Of course, making it pay for itself is another matter. They cannot even cover the operating cost of Safehaven, so what makes you think this one is going to fly?
Wrong… the deal is already done. Arnold Palmer is definitely on board.
I really hope there is no indemnity for cost of environmental mitigation like there is in the Beach Bay deal.
The wise words of En Vogue are what first spring to mind.
“Free Your Mind”?
Try again
more soon come, flip-flop, pie in the sky nonsense from the ppm….
clear as mud…..
This project will never get built……………..
The Inn at Double Head perhaps?
Building the road would be a much better investment for Cayman and Caymanians than building the port.