Closed resort was granted bundle of waivers

| 04/01/2021 | 79 Comments
Cayman News Service
Margaritaville Beach Resort Grand Cayman

(CNS): Developers behind the remodeling of the old Treasure Island resort into Margaritaville on the West Bay Road were granted a bundle of waivers, according to documents obtained by CNS in an ongoing freedom of information battle. HHG Cayman Ltd was granted over CI$1.7 million in duty concessions for building materials, furniture, fixtures, operating equipment and supplies for the renovation of the resort, which is now closed.

In most development concession agreements government tends to focus the duty waivers on building materials or fees. But in this case the re-developers managed to secure duty cuts for a nine-month period between April and December 2017 on a huge range of goods.

Despite some initial delays in CIG refunding the re-developers, they successfully recovered CI$1,710,128.08

The latest information about the variety of concessions given to different developers comes against the backdrop of government claims that the long-awaited policy on development concessions will be going to Cabinet for consideration next month, just one month before the current parliament is dissolved and more than five years after the auditor general first warned of the need for a more transparent policy.

The concessions given to HHG show that not all agreements are equal. In this case the re-developers took as much advantage as possible of the loose definition of supplies, even trying to get concessions on the clothing and merchandise they planned to sell in the resort store.

And while the finance ministry drew the line on Jimmy Buffett t-shirts being sold in the retail stores, the developers were granted duty refunds on an array of other items that would not normally be granted waivers, such as fancy glass plates for the restaurants, aprons for kitchen staff, microwaves, lampshades, pieces of art and even plastic cups.

Despite the more than CI$1.7 million taxpayer subsidy, the resort closed after the lockdown due to the COVID-19 pandemic. Although closing the islands to tourists played a significant part in the closure, it is understood that the resort was struggling before the virus hit local shores. The current owners, MV Advisory Ltd, were sued recently by the resort shareholders and forced the property into liquidation so that they could recover $1 million.

Prior to that, when workers at the resort attempted to access their pensions during the emergency withdrawal period last summer, they found that the resort had not been making the full mandatory payments required under the law.

Although the Department of Labour and Pensions confirmed an ongoing investigation back in the summer, the DLP has offered no further details of the probe since. However, the workers told CNS that, given the amount of creditors in the queue, they had learned that they are unlikely to ever receive at least a year’s worth of pension contributions that were not paid.

This underscores the question that has been asked time and again about who really benefits when developers are given concessions. It is clear that, despite the windfall this project received from the public purse, two years later, when Cayman’s tourism figures were breaking historic records, the resort was losing money and unable to meet its legal obligations.

The documents that CNS has obtained through the FOI request will be posted in the CNS Library later this week.


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Category: Business, development, Local News, Policy, Politics, Tourism

Comments (79)

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  1. The watcher says:

    It is a delaying game. The mentality by both contributor, employee and unofficially, the government is – Tek it quick as the money will not be there for long.
    As long as they can reach “The endgame” which will come faster than litigation could progress. People know this and subsequently do not pay contributions as there is little point – the delinquent health insurance bills may well be worth examining – then the government loan repayments.
    I feel sorry for those that missed the deadline.

  2. Fred Williams says:

    Hasn’t anything been learnt since the fiasco of Michael Ryan just refusing to pay the duty owed on the Ritz Carlton.

  3. Anonymous says:

    As far as I remember there is one person amongst the “ownership” group of the Treasure Island (Margaritaville Resort) who seems to be involved in a number of failed, expensive ventures – at least 2 nightclubs so far and no this venture – but he always seems to immediately “get back up” and start another expensive business venture! Almost seems like an incessant flow of cash available to “invest” and lose and “invest” again!

    But nevertheless he seems to be continuously successful. Curiously, he’s a bosom buddy (maybe even a business partner?) of a certain high elected official who was recently convicted of physical assault. Hmmm?

    Oh, sorry I forgot! Nothing to see here!

    • Anonymous says:

      You’re thinking of one of the previous owners.

    • Anonymous says:

      Same old story from Florida to many island economies–politicians sell out their environment, their working classes, and their sense of community for the quick developers’ bucks. Be ready for the higher crime third world economy that accompanies a less-diversified, servant economy.

  4. Anonymous says:

    Hmmm, wonder if small farms and cottage industries received any concessions for their fertilizers, animal feed, imported labour, etc., etc.,? I bet they would greatly appreciate same and so would we because we could probably buy fresh local produce at competitive prices!

    But that would be common sense wouldn’t it?

    • Anonymous says:

      Not even a sniff!

      And since WORC became involved with work permits, legitimate farmers and cottage industries cannot even get much need permits for real emoloyessunless you can offer construction contracts to family members of the party members in return for THESE PERMITS.

  5. Anonymous says:

    I want to understand duty concessions. Help me out here, so if your a developer or multi million dollar operation you get a discount on duty. But if your a small business owner you get what? What’s there for the small guys? So if your looking in ratios, the small business owner pays more with less help and the developer pays less with a better budget. I dont know, doesn’t seem fair.

    • Anonymous says:

      2% duty discount for you. Lame

    • Anonymous says:

      That’s because you don’t understand that the developers give something back to the people who give them the concessions, whereas you small guys expect the pols to do it for the good of the community – naive you.

  6. concernedcaymanian says:

    Forget about MVille – what about da hundreds millions granted to da Dart corporaation????

    • Anonymous says:

      he’s paid it back many times over…

      • Anonymous says:

        Show me the proof.

      • Anonymous says:

        Not even remotely close. In the four versions of the backroom NRA Deal(s), DRCL were gifted extensive catalogues of import fee duty waivers, application fee waivers, stamp duty waivers, and seemingly, an equal or greater unwritten amount of non-performance penalty waivers – extending beyond the horizon to at least 2046. Not that it really matters because the Finance Ministry admits it is not tracking any of it. To further muddle their deal, there was the involvement of the NRA Ministry, significant land swaps, re-zonings, tailored legislation on air-rights, and the magical gifting of hundreds of acres of undeveloped and unmaintained “Safe Haven” crown land via the NRA deal(s). DRCL are hunkering down on it all…with limited execution, and no published plan. They don’t even clean their own beach front above the high water mark, instead allowing well-meaning public volunteers to do it for them. A tiny amount of the land was to be “donated” back in the form of a Sunrise Adult Training Center and Educational and Community Purposes Land, but their sneaky lawyers engineered the deal so that when the deadlines were predictably exceeded by CIG, those gifts were systematically withdrawn, as was their $515mln in developments promise over 5yrs (2011), scaled-back to $400mln over 10years (2016) pledge under clause 22. Forget $3Bln over 30 years, that’s no longer binding. They dangled the Sunrise Adult Training Center site to the Rugby Club on disagreeable terms and then snatched that away too. A promised public camping and picnicking site development area never materialized and has since been announced as the footprint for another beachfront hotel – intermingling a commercial guest hotel with a beach earmarked for the public’s use – and they still haven’t done anything with the eyesore hotel wrecks they already own. Early in 2020, Dart fired it’s imported staff saving themselves perhaps $6mln on monthly payroll, and then guilt-paid $3mln to form the 3C Fund, to try to dress that up as a community positive. They stoke a belligerent extortive culture of “do what I say, or I will do this”, that contributes little beyond whatever backroom deals were made to those ministers in the LA. This is still very much going on. If you think any of this viperish activity is “good” for the Cayman Islands, the general coffers, jobs, or people of Cayman, have another look because you’ve probably missed the angle.

        Read the various version details for yourself:
        https://cnslibrary.com/national-roads-authority/

    • Concerned says:

      Numpty. I don’t like the way he is monopolising the islands but that guy and his company have brought huge benefits to you. Open your eyes.

  7. Anonymous says:

    What is DLP doing about the unpaid Pensions? Inquiring minds want to know.

  8. WBW Premier. says:

    Concessions are necessary if you want any sort of progress.

    • Anonymous says:

      So, let me get this straight.

      Businesses should give 100% off on sales for personal favors and public breadcrumbs and make employees foot all company expenses? Don’t make sense either.

      Paid to dream up ideas and paid even more to actually execute, if you ask me.

      These people are coming with millions to spend and invest. They don’t need million dollar gift cards that locals pay for just for “their time” to get started.

      Concessions should be used as awaiting deposits to redeem, after the project is completed, ironed out, and pillowtalk promises are actually met.

      Tell this foolishness to anybody with two brain cells. Pay them to start, pay them to finish, and ask for returns that are rationed on their own scheduled discretions. Money first, people second business logic doesn’t hold water.

    • Anonymous says:

      Caymanians do not want progress. They want to go back in time to the days of Pirates and making rope.

  9. John Ebanks says:

    who is actually the owner/the developer …HHG or HH?

  10. Anonymous says:

    Who is responsible for it’s reopening? I know they are currently renting rooms out

  11. Anonymous says:

    And yet not even a duty break for us on island of even $500 so we can bring stuff in since we can’t afford to fly off island.

  12. Anonymous says:

    Normally relief from taxes and fees are given to struggling families and individuals. In Cayman families and individuals pay the full amount while wealthy developers get the discounts. SMH

  13. Anonymous says:

    Why wasn’t this place used for quarantine?

  14. Anonymous says:

    as long as real estate development is not defined as relevant financial business for the purposes of AML and CFT regulation this will continue to happen.

    • Anonymous says:

      There exists ,(or used to), a thing called the Hotels Aid Law, which was enacted to encourage hotel developers by giving them duty reduction on everything needed to open a hotel.
      A developer provided a list which f everything he needed to import and the board agreed a duty reduction.
      That well intentioned device has been hijacked by politicians handing by our favors to their friends.

  15. Anonymous says:

    Don’t these guys have several other incomplete developments on island?

  16. Jus Sayin’ says:

    The government was the final decision maker for the grant of the concessions. Why is the developer being painted as the bad guy for asking? If the requests weren’t legal or otherwise appropriate, government should have denied them.

  17. Anonymous says:

    How government can waive duty when they want what a joke. I remember been sent medication for my son’s illness from the states it was a clinical trial so the medication was free and customs took it upon themselves to put a monetary figure on it and I had to beg and plead to have the duty waived absolutely disgraceful.

  18. Anonymous says:

    This is just wreaks of political corruption. How does our Government get involved with some of these Characters and players? Isn’t the least bit of due diligence done? Where there and stipulation as to how these concessions would be used and penalties for abuse? Shouldn’t Government have cut off any concession they were getting when they were not paying pensions..Let me guess, they will probably say they didn’t know about the pensions..

    Will someone be held liable for the misuse of these funds? Will the Government do an inquiry into how much this benefited the people of these islands and I am not talking about just the politicians?

    I think both Roy McTaggart and Joey Who better start talking or their seats will be up for grabs come May.

    • Anonymous says:

      If they had to deal with CIMA, like the rest of us, the administrators would have been sent in decades ago…. but of course that is just it: keep all that probity stuff for the ex-pats in the FS industry and away from what we do in gowerment…..

  19. Anonymous says:

    Alden and his gang strike again!
    Giving away everything with no plans, substance or justification for how the decisions are being made. Pi$$ Poor Management from a bunch of clowns.

  20. Anonymous says:

    Joey Who?

    • Time to Drain the Cayman Swamp says:

      Kurt Tibbetts, Alden McLaughlin, McKeeva Bush, Joey Hew, Moses Kirkconnell, Julianna Connolly, Tara Rivers, Dwayne Seymour they are all the same. All are useless and untrustworthy. They are all about can they get out of politics for themselves and their business associates. Cayman needs better leaders because all of the above have got to go in 2021.

      • Anonymous says:

        Agreed, but good luck… Their constituents (Cayman educated) will re-elect them, just wait and see. Very sad that our electorate are du.. sh..s…

  21. Anonymous says:

    Anyone remember the comment posted when this farce kicked off suggesting that the only way to remediate TI was with a wrecking ball because the only value in the place was the land it sits on/

    This was a scam from day one wasn’t it?

    Bet the next step is someone buying the whole mess up from the liquidators for peanuts and flattening it for a new high-rise development.

    • Anonymous says:

      I’ll give them 10 bucks for the giant flip-flop

    • Anonymous says:

      Interesting comment about the site. When TI was in liquidation pre-Ivan I met someone representing people who were trying to take the place over and that was their take on it – the resort was worth nothing but the land was a goldmine. When it went into long-term let I had a room there for a year in 2007/8 and it was a tip. Some of the rooms on the upper floors weren’t bad but on the lower floors the damp and mold had to seen to be believed.

  22. Anonymous says:

    Not paying pension contributions that have been deducted from wages should be classified as theft.

    • Anonymous says:

      It is. It is also fraud. We have police. They do not do their job.

      • Concerned says:

        They do the job just appallingly badly. They are so bad they don’t even know it. Not knowing you don’t know is just about as dangerous as it gets. Led by a complete idiot they call the Chief of police. He wouldn’t make a sergeant in the UK. Fundamentally useless, I mean when you get sent HUNDREDS of recomnendations to discipline staff and yet do nothing, it says a lot about your credibility.

        • Anonymous says:

          Racist.

          • Concerned says:

            Why am I racist? The COP, at who’s door I put this, is an expat. Unless you think I’m racist against him. Also you have no idea what colour I am. So I think your comment reflects on your ineptitude and actually indicates it is you who is racist because you raise race as an issue where it has no bearing on the argument. It is a base argument that has no foundation and is raised as the go to when you have no defence to your ineptitude. What you will find if RCIPS were ever subject yo an equality assessment is tge Service is findamentally racist against white people. This based on the clear disparity in salary and benefits, promotion and opportunity for white officers. Notice I say white and not expat because an equality assessment would show whites are more likely yo be paid less in RCIPS than their non-white colleagues.

            • Anonymous says:

              You are correct!! The cops are too busy trying to get laid that they won’t do their jobs or even get trained to do it. It’s pathetic.

      • Anonymous says:

        DLP also needs get off their asses.

  23. Anonymous says:

    Why has no one been arrested for any deduction and subsequent non payment of pension monies? Is that not theft? Is that not fraud? And WT actual F are we paying the labor authorities to do?

    • Anonymous says:

      My ex-employer took money from my paycheck for pension and never contributed. It’s taken the labor authorities 4 years and they are still working on the case. How long does it take to see that money is not being paid into an account?

      Even if they pay it now, I’ve missed the opportunity to withdraw it.

      • Concerned says:

        Take a private prosecution. Then sue tge authority for the cost.

      • Anonymous says:

        Has the pensions dept gotten anymore staff since the meeting at the LA during the summer? She said that more staff was needed. Too few people to deal with the problems.

        • Anonymous says:

          Lack of staff is a sorry excuse. It there was any effective enforcement almost everyone would comply and there would be little need for enforcement.

    • Anonymous says:

      Cause then they’d have to arrest all the prominent local businesspeople they turn a blind eye to as well.

  24. Anonymous says:

    I am not surprised in the least – this was almost inevitable with these guys.

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