PACT/UPM gave CI$12+ million waivers to hotel projects
(CNS): The development concession giveaways continued over the last administration, despite the opportunities the PACT and UPM coalition governments had to address a major concern for voters at the last election. More than CI$12 million in duty waivers was given away to three Seven Mile Beach luxury hotel and condo projects, even though they offered little direct benefit to Caymanians.
While local people struggled to get duty waivers on green energy resources for family homes, the Pageant Beach Hotel project, the luxury condo development Watermark, and the Marriott Resort’s luxury revamp were all given a break on the importation of nearly $12 million worth of goods. The information was supplied in response to a CNS freedom of information request,
Pageant Beach, a major hotel project still under construction at the very southern end of Seven Mile Beach, on the edge of George Town Harbour, was granted very generous concessions in response to its request for waivers. Despite a very different economy and the long delays on this project, the developers were granted these new waivers in November last year.
The hotel’s developers received a package worth almost CI$8 million, including duty waivers on construction materials, furniture fixtures and fittings, and operating equipment. The package was revised down from an offer in October for $8.7 million. However, the developers were given additional waivers on more than $700,000 worth of materials imported between January and July of that year.
While the concessions came with the condition that the workforce on the site should be at least 60% Caymanians at any given time and monthly reports were supposed to be submitted to WORC, there was no indication if these conditions were met and verified. CNS has made an additional FOI request to the relevant authorities for the monthly reports.
The Watermark luxury condominiums was another multi-million-dollar luxury development that received generous waivers. In June 2023, Cabinet approved the renewal of CI$2.9 million worth of import duty waivers on construction materials as part of a more than $8 million concessions package first given by the PPM administration.
The project, which is still not complete, is part of a series of Seven Mile Beach condos by the developer Fraser Wellon, built for and marketed to largely overseas high-net-worth individuals and property portfolios.
Although the government had an opportunity to renegotiate the package because the developer had not used it within the original period, the CIG allowed the giveaway because of project delays due to the pandemic. Conditions regarding the employment of 60% Caymanians on the site were also imposed on the developer, but again, there is no indication on the documents released by the government that these conditions were met.
In August 2023, the Marriott Resort was granted waivers of import duties up to CI$1,638,000 on furniture, equipment and materials brought in between May 2023 and December 2023 for the renovation of the resort. Although the hotel was asked to “utilise its best efforts to maximise the employment of Caymanians at the hotel”, it’s not clear if it provided the necessary monthly report detailing the number of locals working there to WORC as required.
It is also not clear why the government felt the need to give away the duty for the luxury hotel’s refurbishment.
On the 2021 election campaign trail, questions are being asked about over-development and the concessions given for these projects, which are all aimed at high-net-worth overseas owners and the luxury tourism market, with little direct benefit to local people. There were also calls for a proper concessions policy to guide who gets what and why.
Almost all of the independent candidates elected and went on to form the PACT and then the UPM administrations criticised the PPM administration over the giveaways and called for it all to stop. However, despite having the chance to develop a transparent concessions policy, the last administration failed to do so.
It also continued to give away the duty that could have been collected on one project where the chance arose to renegotiate the package and on two new projects that would have happened with or without the concessions.
See the documents released below:
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Category: development, Government Finance, Local News, Policy, Politics
Corruption, corruption and more corruption. Vote them all out.!!
Hi CNS- will you do a story and a freedom of information request on who granted the destruction of the mangrove north of crystal harbor and south of the (west bay) yacht club channel? How much mangrove was destroyed and why was this granted? Is the mangrove not meant to be a protected habitat? Was any of it a plot of land before or did they literally just fill in the mangrove? It looks like they have destroyed 5+ acres of mangrove looking at the historical google earth imagery.
Ask Dale Creighton.
Actually this was approved by the CPA in 2024. See the CPA minutes from 17 July 2024 for an 87,000 sq ft $60 Million private residence. Yes, you read that correctly.
This also includes cutting a canal through the mangrove. Application made by R888 Ltd by Trio architects. Sadly this area was not protected and was zoned residential.
Duty concessions – aka kickbacks. Has to stop, all the development is destroying this place (and probably already too late for us unfortunately).
Even if CIG makes more on stamp duty than they gave away on concessions the question that has to be asked/answered is: did the project need the concessions to be built?* Or would it have happened anyway and we would collect those stamp duties anyway so the concession was just wasted money?
Similar to asking for 60% Caymanian employment on-site, but not checking the reports. CIG is assuming a benefit that may not actually be real.
For the Pageant Beach project I could almost see the argument that it was at risk of shutting down incomplete (which would be worse than it being built) so if the concession helped get it resumed/finished then that was justifiable. The others may be a harder argument to make.
* did the project need the concessions to be built? – At a time (i) of building when we needed the economic activity of the construction, or (ii) to be completed at a time when we need the economic income of the stamp duties on sales. – Its the same question, but with extra complicating factors that CIG should be able to answer as part of justifying why a particular project got the level so CIG financial support that it did at the time that it did.
To people saying that we will make more on stamp duty (or whatever) than we spent on the concessions, if this is the case (I’m not saying it’s not) then why doesn’t the Govt. just release that information when asked about this stuff, rather than letting only ‘half’ of the information dribble out via FOI? – If we will make more on stamp duty (or whatever) than we spent on concessions then a Govt. not explaining (indeed bragging) about this WITH NUMBERS is responsible for people objecting. The biggest problem here is Govt lack of information. – In fact they should be able to release projected positive income vs concessions per development, and then release the actual positive income collected say 5 years after the development is complete showing a 5yr ROI on the concessions.
A bit like not having the ‘60% Caymanian employees reports’ ready at hand, a second own goal on this issue.
We all know what really happens there. A duty waiver (or some other incentive or contract is given), and in return those ‘helping out’ get a nice share of it in their pockets.
Yet again, money is slowly siphoned away from the people and into the pockets of the rich.
Does anyone know how much was collected from duty actually paid in connection with these projects? Was it zero and all duty waived or?
I think it would be more useful to check how many politicians suddenly owned a new condo, at the end of the development.
Nothing from Dart, but I give you one guess who funded the sea of red we are now seeing.
I donāt mind concessions for hotels as at least they generate ongoing revenue and employ more people. Probably canāt build too many more of them anyway. For condos like watermark itās only one-off duty and then nothing so donāt know why they should get any concessions?
The Cayman Islands Government is going to generate MUCH more revenue from a Condo development like the Watermark than any hotel. The stamp duties involved (and there will be sales every year) make tourist tax on a room pale into insignificance. The last thing we need in this country is more employment where those being employed are imported cheap labour, displacing Caymanians from opportunity, overwhelming our housing and other infrastructure and diminishing our quality of life.
The Hyatt at Pagent Beach and the new one at Margaritaville are condo hotels and will generate stamp duty as indeed Watermark does but will also generate millions in tourist taxes.
Why give concessions to Watermark because they went over budget.
Re 8:25 am there will be sales and resales of condo units, agree. Billionaires, millionaires buy in the names of a company, then transfer the company shares. No stamp duty.
Watermark has 54 units with avg sale price of $10M, so that $540M in sales will generate almost $40M in stamp duty. How many years of room fees and low wage worker permits would it take to earn that from a hotel. During that time you have to house the staff which puts more pressure on rents. CIG should be encouraging the high end condo projects.
All true, but wouldn’t the developer have completed this development without the waiver.
Yes he would, the duty waiver is there to increase his profit. No other reason no matter how it is spun.
The Watermark developer clearly didnāt need the waivers, he just wanted to be treated the same as Dart.
Dart also didnāt need the waivers, but hey, why let a good waiver pass.
No stamp duty return from Dart projects however, as they donāt sell anything.
540M over what time frame? Answer is you do not know. It is unpredictable revenue. There is no substance to your argument.
Nonsense, 90% of the units are sold. So as they close the owners take possession and pay the stamp duty. Additional stamp duty will be earned if any of those owners then sell, the new owner will pay stamp duty again. The $40M estimate is the low end, this could easily be $100M over the years with resells. the other upside is that many of the residents of the Watercolours are selling to move to Watermark. Those sales then produce more stamp duty.
IF the owners sell. That is my point! Can’t even be counted as unearned income on the books! Stamp duty is paid waivers or not. The developer does not pass those savings on duties to the end buyer.
Not to mention if they own it under a shell and sell the shell instead. Ownership never changes hands as far as the government is concerned, so no stamp duty paid. The ultra wealthy did not get that way by having honest business practices and/or morals.
It doesn’t work that way. It’s called Land Holding Companies Share Transfer Tax and Government still gets the same revenue on the transfer of shares. Even Government isn’t that stupid.
We might recall that the Ritz paid for itself inside a single calendar year, earning all kinds of record profitability accolades. Part of that good fortune much have been the 10% Resort tax, and 30 year CIG Room tax (NRA deal) waived back to the hotel owners to keep.
You must already own property here, encouraging more high end condos will only drive up the already ridiculous price on housing. Guess Caymanians going the way of the US Indigenous and the Hawaiians. Wonder where government will build the reservations to hold the Caymanian youth looking for their own homes.
You got that wrong. Concessions were granted on Margaritaville and it failed to pay tourist tax, pensions and stamp duty. Only a few million.
Also the new hotel by the North Church Street cemetery seems to have gone belly up.
Meanwhile Watermark is at least two years behind its completion date.
What unmitigated disasters.
CIG needs developers to put up bonds before giving them concessions. Minister of Finance take note. If you need help give me a call.
The people want MPs that do spend money to benefit the people. The MPs want a government that does the best for themselves. The government cannot elect themselves [yet]. Once the MPs are elected, that is the very last time any of the people have any say whatsoever. I do not feel represented.
That $12M would have gone a long way toward construction of a Trade School, or a reliable public and safe transportation system, or bike lanes, or a plethora of other ideas beneficial to the majority of the working class people. Instead, it was spent to the benefit of already wealthy developers to build/upgrade hotels that we don’t need. We have families, senior citzens in dire peril and no hope in sight.
Next to none of the large scale building projects has any corresponding investment in the infrastructure of these islands, or in contributions to social housing – both of which are in great need and put under increasing pressure by such developments. There has to be a more extensive and rigorous social (and legal) contract between developers and these islands and their people.
And, where such contracts and planning conditions do exist, the CI Government must ensure enforcement rather than acquiescing in intransigence and abuse of developers’ dominant positions.
They’ll blame it on Tariffs.
It’s apt that a high watermark shows the scum that’s left behind.
Quite how and why it was felt that a rich developer, selling condos to ultra wealthy clientele, was worthy of these waivers is beyond me.
Rancid to the core.
amazing how the working classes have voted in those who will help the rich harm them here and in the US
The government seems to like giving away money to increase others profit, but in the meantime the under performing and under funded pensions continue to decline and pensioners forced to live in near poverty and the rich politicians don’t give a damn about these people.
Giving concessions is fine. PPM love giving them too. If you really want have developers (and realtors) pay their ‘fair share’ you need to start:
demanding assignments of pre-construction properties are registered and stamp duty paid on each transaction;
impose a stamp tax on realtors commissions on sales to non-caymanian beneficial owners;
annual fees on all development stratas where residential ownership is more than 10% foreign.
etc. And btw, nothing suggested above will stop development.
All of this as well as cutting concessions sounds good to me. We have no need to incentivize anyone to build here anymore. As has been proven over the last few decades, Cayman is a developer’s dream, and the profits reaped are plentiful. At this point, we should be more selective as to who we allow to build here, asking more along the lines of what they can do for us, and not the other way around.
Pageant Beach & the Marriott project both involved contractors brought in from overseas, so local contractors were not even involved except for fronting purposes. Now the same French company that is at Pageant beach has taken on the Beach Bay project pushing out an old established full Caymanian owned general contractor. How is this fair? This French company just hires companies that bring in all kind of workers off the street (remember the missing $300,000.00 wages) cutting off local legitimate sub contractors. Why is the labor minister allowing all this to happen? Who is the new Canadian company at the Lacovia site? Why is government allowing all these foreign companies to come and operate in Cayman?
Don’t forget Dart bringing in roofers from Dominican Republic and wall finishers from Canada. Getting the concessions and better deals on the work. It is a win-win for the big boys!
Just wait for Bryant to get the dock pushed thru and Hew with the dump fiasco, then you will see more foreigners brought in.
If only there were laws to protect Caymanians and prevent work from being sole-sourced to foreign companies…… what would that be like.
Once PPM gets back in power than the give a ways to the rich will just increase.
Klepto ministers buying favour again with developers. These scoundrels need to be held directly accountable to the UK authorities for putting Cayman in further debt. There needs to be a new policy freezing all government capital expenditures 6 months prior to an election.
What have done people to stop this ongoing activity of corruption by our politicos. we continuously reelect them and we continuously get shafted due to the lack of integrity, proper safeguards and just pure and unadulterated ignorance on the part of politicians and civil servants.
How many times must we continue to read the same bull crap on concessions and nothing is done about it. How many times must we allow corruption of this nature to fester in our society. Clearly there is corruption
and who knows what the payback is. We are now becoming prostitutes opening ourselves up to developers wishes through those we elect who obviously are in it for themselves even though they tell you we doing it all just for you.
We are now even having the department of Education contributing to Reggae festivals for what and for whose gain.
This bull nefarious crap needs to stop. Each and everyone who has had his hand in our pot by giving away, by promising by taking from us, by selling us out, you are being called out; each and everyone of you, you know who you are and what you have done not in the interest of Cayman and Caymanians but for your selfish arrogant selves.
the above goes for all who are successful at the polls in 2025, whether you are new or old to the game, you will be watched extensively , you will be called out on any damn foolishness you conduct and you will face civil law suits for any mismanagement, thievery or action that is detrimental to the overall well being of these islands . you don’t have to believe this missive, but he/she who cant hear will feel.
Enough is Truly Enough.
pact/upm were a shambles. but duty waivers and incentives are a part of business and getting things done. long term economic benefit of these developments far out-weighs any initial waivers on duty.
There is zero revenue generated from developer giveaways. Thereās no duty revenue generated after itās forfeited. The construction team and employees are permit workers. Thereās often also 10% govt tax waivers for decades of future stay over traffic, more and more not leaving the propertyā¦see flurry of local restaurant failures. Years of dimwit CIG negotiators have either failed to understand the revenue equation, or have been paid to disregard it. It canāt be both.
To be fair, most of them thought they were just placing a lunch order at the time.
Evergreeen.
As real estate booms, Caymanians question who their islands are building for.
January 26, 2022
https://periodismoinvestigativo.com/2022/01/cayman-foreign-investors-identity-crisis/
Remember: these same people are now running as part of the PPM. Will you let the foxes back in the hen house? Just watched the GTW forum, btw. Go, Hunter!!
Member of that Cabinet who approved these are also heading up one of the parties – Andre Ebanks and Wayne Panton – although non of us know who the real leader is.
the problem that we have is that TCCP is another version of PACT. Seriously I dare you to find 4 members of TCCP who could be a capable Minister. Forget 8 members.
No need to narrow it down to TCCP, I’m having difficulty naming 4 from the 59 declared candidates.
Dream Cabinet;
Minister of Finance – Romelia
Minister of Financial Services – Maxine
Minister of Education – Festa
Minister of Border Control – Raul
Minister of Planning- Robert
Minister of Tree Hugging – Mac
Minister of Health – Roy T
Minister of Tourism – Hunter
Speaker – Dr. Frank
I’m with you on this dream team. Trolling politics FTW!
Deputy Speaker – his parrot š¦
The bullet in his leg! #whoshotfrank
Give you one guessā¦.
More of the Same, and guess what, the majority 85% of those who were responsible for this are now running with the PPM. But GT voters lack serious substance between the ears and i’m sure Joey & Kenneth will shimmy back on in.
GT has always been a PPM stronghold, GT voters are like moth’s to the flame.
Jay Ebanks is this what Unbossed looks like.
PACT all campaigned against concessions. Now this.
PACT was disassembled over a year ago and the UPM lost its Cabinet Quorum in November. Who then is approving these, by what mechanism and under what authority? This is a Day 1 Rescind.
Disgusting.
Government gives tax breaks to instituional investor backed developers.
Developers sell property to high/ultra high net worth indviduals.
Such individuals lead to the gentrification of the island leading Caymanians to feel left out and not recognise their home or feel welcome.
Cry and complain – “in the next election well fix this”.
Rinse
Repeat
https://caymannewsservice.com/2022/05/pact-preparing-new-policy-on-duty-waivers/
Got gave concessions to a developer selling $30Million condosā¦???
The stamp duty on a $30m condo is $2,250,000.
The concessions were originally given on hotel properties which generate accommodation tax – now it seems that condo projects such as Fin and the Watermark are eligible.
There is no stamp duty when zero property transaction occurs- when a company simply changes shareholders and any assets like property simply transfer in the background. This is and has been how “investments” are bought and sold for years in other Caribbean regions. Stop acting like you don’t know how people have figured out how to bipass stamp duty.Tired of hearing this justification for over-development.
OMG!
Maybe the one good bit of news from Trumps tariffs will be the slow down of construction of these monstrous hotels due to the impending increases in construction materials.
Think again. There are “certain” developers here that literally wait until the economy is bad (when everyone in the construction industry will get on their knees just to keep staff employed and their doors open) to start work they’ve had waiting patiently in the pipeline. It’s called vulture capitalism.
No effect on materials not staying in US. Contractors will import materials through bonded warehouses where US import duty is not payable, so long the materials are earmarked for export.
Why do Caymanian politicians persistently do this?
Lodge
Why do you think?
Backhanders, no other reason.
They do it because the voters allow them to do it…
This.
Why..? You really need to askā¦?
Follow the money if you can.
In April vote for candidates who donāt need to enrich themselves from the public purse.
Pleaseā¦.No more PPM who are now joined up with the previous mobsters.
07@5:38pm – Exactly! Clearly for the ‘concessions’ they get on the side or, under the table. A condo here…
Ask McKeeva how it’s done.
Follow the money
these are some of the ‘special interests’ they keep talking about.
GREED and kickbacks. They just can’t help themselves when the temptation presents itself.
vote all PPM out ,