PPM claws back 50% Dart tax
Premier Alden McLaughlin at 2015 Fidelity CEO
(CNS): After more than a year and a half of talks with the islands’ largest investor, the PPM administration has managed to renegotiate the terms of the controversial NRA Agreement between government, the National Roads Authority and Dart Realty. Premier Alden McLaughlin revealed that the 50% accommodation tax rebate on all of the investor’s tourism accommodation, which was a deal breaker for the Progressives, has been abandoned.
The removal of the concession from the deal, which was originally signed between the former UDP government, the NRA and Dart, has changed shape again but the premier stated that the tax was gone and he was pleased with the outcome of the amendments to the deal.
McLaughlin revealed the progress in the talks, which began just after his Progressives government took office in May 2013, at the CEO conference Thursday morning when he delivered the State of the Nation address.
He said that Dart had also agreed to construct an access road through the Kimpton Hotel property to address fears over a through route if an emergency closed the Esterley Tibbetts Highway.
The premier said that Dart had listened to the concerns of government and agreed that a level playing field in the tourism sector would be maintained.
However, the renegotiation has not come free and Dart will be given other concessions over the next thirty years on the hundreds of millions of dollars the developer has committed to spending in Cayman over the next thirty years.
Alden McLaughlin also revealed that government will sell to Dart the freehold of the crown land at Safehaven, which the investor currently leases, having taken over the property from Michael Ryan, the Ritz developer and the hotel’s former owner. This, the premier said, would generate income for the government.
He said that “bespoke” legislation would be created to allow Dart to pursue its plans for the elevated development on the West Bay Road to link Camana Bay with a planned hotel and Seven Mile Beach. He also confirmed government’s agreement for the developer to realign the Esterly Tibbetts Highway in the Camana Bay area.
The premier said lots of local jobs and business would be generated by Dart’s further investment in the Cayman Islands and he was very pleased with the resolution to the negotiations. He said Dart’s billions of dollars of investment was tied to the success of tourism and financial services and his government would continue to work with the developer to enhance Cayman’s infrastructure.
Although the premier did not go into detail about the renegotiated deal, following his presentation Dart issued a press release confirming an agreement had been reached and confirmed the 50% tax rebate had been eliminated.
“We understood government’s desire to replace the 50% hotel tax rebate that had been intended to enable Dart to recover some of the infrastructure investments made in the NRA Agreement, and to incentivize our long-term development activity in Cayman. At Government’s request, we were open to alternative recovery and incentive methods, and feel this has been achieved in the agreed Third Amendment,” said Dart Enterprises CEO, Mark VanDevelde.
In place of the hotel tax rebate, Dart will receive an increase in the development duty waiver cap already in the deal and via other duty abatements and waivers related to its development over the next three decades.
CEO Jackie Doak confirmed that Dart will invest some US$400 million in development in addition to the US$300 million currently being expended on the Kimpton Hotel project, including a five-star hotel at Camana Bay, as well as the overhead road development
“In agreeing to draft legislation for air rights, Government has proven that it is prepared to be innovative and flexible in offering solutions to the committed investors that are contributing to Cayman’s long term success,” Doak added in the release
In total, Dart has invested US$1 billion in Camana Bay to date, and expects to invest another US$1.3 billion in Camana Bay development activity over the next 20 years,” she said. “We have a positive and productive working relationship with the Government, which not only gives us confidence to move ahead with our development plans, but also sends an extremely encouraging message to other investors in the tourism and financial services sectors that are so pivotal to Cayman’s continued prosperity,” Doak stated.
Category: development, Economy, Local News, Politics
All the above thatwe’er are getting from Dart Managements just keep in mine Dart didn’t get where he is by giving away anything so keep fooling yourself dart is out for him self. Caymanienes please please wake up. Mr. Alden is selling us to the highest bidder and we call it progress.
Does anyone but me see the irony in us (Cayman) giving Dart concessions, in effect funding his economic take over of our economy and country? He has to have a big grin on his face.
Alden just wasted his and everyone elses time ‘renegotiating’ the deal to look different, but accomplishing nothing, as usual. Dart will get his money back,as he should, for building and investing. Call it tourism tax abatement, import duty exemption, or whatever you think the public wants to hear, but it comes from the same place. And dart still has a financial advantage in his hotels, in fact saving on the import duty means he gets his money sooner than waiting for tourist taxes to trickle in. Alden is dreaming if he thinks he got dart to unilaterally give up any financial benefit they already had in their signed contracts. Has alden ever accomplished anything beyond window dressing?
The UDP giveth away and the PPM taketh back. Progress at last. Did we ever get all of those millions back from Mac’s church?
Some, unfortunately we did not get the millions paid to Cohen and Cohen or the millions paid to all the settlement on the cruiseship dock, when he ignored the tender process and got a nice private jet ride for him and his buddies.
Can’t believe people forget about this or JuJu’s big holidays to Barcelona for a mobile phone conference with 10 Aides, including her bodyguard/boyfriend/confidente, whose living expenses in a brac hotel for 3 years we also paid for.
OK so how does this break down. Let’s see:
Even Dart agrees McKeeva Bush and the UDP were complete incompetent suckers who had no clue how to negotiate a “deal”.
Offline (not on the internet) backlash that would have suffocated other businesses due to Dart’s unfair advantages finally caught up to them and they came to a reasonable solution to this saga.
Judging by the comments on this story people (and the well known local rag) are still obsessed by the NON dump that the UDP and their followers still think was going to be a real dump. GET OVER IT. IT IS DONE. The Competent hands of AMEC Foster Wheeler will soon be laying out a comprehensive detailed solution for the future waste management of ALL three islands. Guaranteed it will not be 2 lined holes in the ground in another part of the island. Dart has not mentioned it and they should put their FULL support behind the AMEC F W solution.
Bottom Line:
The Safehaven / Regatta property is being sacrificed to make up for the ignorance of McKeeva Bush who simply gave away far more than ever would have been necessary. Even then our esteemed current government turned the “loss” of that Government PUBLIC land into a solution that will pay the people of the Cayman Islands for YEARS and YEARS to come.
Everyone can thank McKeeva Bush and his associates for this protracted expensive exercise by once again not voting for them in the next election.
Congratulations to the astute members of the PPM/C4C Coalition and all of the intelligent, thoughtful Caymanian voters who love their country and did the right thing at the polls at the last election.
Caymanian
I actually had to laugh at this comment, People are so easily manipulated, Now this is also Bush’s Fault. The PPM are definitely Professional People Manipulators.
Keep believing that they are so different the the UDP and Cayman will go nowhere real fast. They are all playing you UDP and the PPM..When all they really Care about is their Phony Baloney Jobs.
Dart still gets to recoup the money they invested into infrastructure upgrades. It was going to be over a long period of time estimate to be up to 20 years through the 50 percent room tax rebate once everything was built and people started to come. Now they get their money back through duty concessions during construction, which mean they get it back a heck of a lot quicker. He also gets to call more crown land Dart Land. As far as the access road, if you look at the plan Dart created for the Kimpton site there was already a boardwalk type walking path and bike trail through the property that they said could be used for emergency access.
I my bigger picture what I see is that Dart still get his money back, just faster, He also gets a much bigger piece of the Seven Mile Beach Corridor to call his own, which he couldn’t have owned previously, I am sure this made then extremely happy and was worth the negotiations itself . Government gets an access point that was already planned and they get to collect the full amount of room tax when they start to rent.
This was meticulously handled in a way that allowed the CIG to still give Dart what they were promised while saving their faces politically. But in the end Dart came out with more than they had before and we still have to deal with the dump. However I am sure Dart feels that they will eventually have to do something about it themselves.
I don’t see where the big accomplishment is or what the premier is so proud of.
Just thank McKeeva Bush for starting the whole mess in the first place. The current Government had a whole lot of work to come out of this at break even. Read the whole real deal and try comprehend it. You might actually find that the new amendments will pay the people of the Cayman Islands in the years ahead over and over again. Still do not get it? Well that must mean for sure you are as ungrateful as you sound.
exactly
What about the dump? Oh excuse me, “Stinking Dump” !
The Dump goes on, However we all know that Ozzie has the answer, no wait I mean Alden now.
I am saddened to see that the current Government has ‘finalised’ the de-Caymanianisation of the appearance of our West Bay peninsula. Seven, or is it now 10, story buildings on the beach, beaches that become de facto private, and now roads through tunnels. Cayman will continue. We’ll hopefully be able to split our tourists with those wanting ‘island style’ going East (perhaps as far as the Brac & LilCay) and the rest staying on the west. But as someone who grew up and lives in West Bay and George Town the carbuncle in the middle now depresses me. Politically I am saddened and disillusioned that such a large decision (because a change of this style to our social aesthetic is large) was done by our elected representatives without giving the public a chance to be involved.
Just as Mac did with the first agreement with Dart. Our politicians are clones of each other. they have little if no concern with the input of the people.
1) Dart only bought what was for sale. When are we going to understand that?
2) He is not building anything East.
3) He does not own 10% of the Cayman Islands.
4) As residents of this island you should know that very few people are looking for Robinson Crusoe Island.
5) If they are then go to Little Cayman. There is only 150 residents
6) Tourists can still make choices, but you will see that the majority like Dart’s vision.
7) Holiday Inn did not pay any duties to Gov’t
8) Things change get used to it.
9) Your kids think Camana Bay is fun, get over it.
10) Can’t accept it? Move to Cayman Brac,I am
What exactly is meant when they say Dart will get certain “Air-rights”?
It means they have the right to build and develop over the road. They are using every word but “tunnel” but that is what it will be. Both the by pass and West Bay rod will be al tunnel passing under the new developed area.
Da be o k. I was fraid he own air and everbody have to pay to breeth.
Soon come!!!
Will a value for money report be done on this deal to find out if we are getting dollars worth this time. Most likely not!
We need OMOV before the next election. That is the only way we can keep Cayman.
Dart will now have both economic control of the country as well as strategic control.
Why do people not understand that Dart is not benevolent benefactor. He is a very smart ruthless capitalist. Yes he has done nice developments yes he does things well, but his goal is to have total control of Cayman and that can not be good for the people.
PPM can dress it up however they want. They are continuing what UDP started; the sell out of Cayman to the Dart group.
What they should be doing is passing anti-trust legislation so that no single entity can have control of our economy.
It is a shame that the people are now measuring whether one deserves to be worshiped by the money they can spend.
Anonymous 5:05, You are as right as rain! Dart is for Dart… Not the Cayman government, and certainly not for the people of Cayman. He is far from lily white. Check on the internet and find the reason he left the U.S., and why he abruptly departed from Venezuela after setting up business there.
Anonymous 5:05 I agree completely with your comments.
The argument always appears to be “look how much money Dart is spending” and “how wonderful the developments look” and “how much employment it will create”. No one is disputing any of the above.
What we (and a small minority it seems) are saying is that having one enterprise control everything is bad, on principle, for any country, people or economy, no matter how wonderful it is financially. It is not healthy, in the long run, to live in a country where everyone works for one Company and that Company runs everything.
The sign of a healthy economy is having an ecosystem of many businesses fairly competing with one another. That is a true market economy. It may already be too late now since this fish has become the largest fish in the fishbowl so as not to leave much room for the other fish trying to swim around.
Anti-trust is the only solution and is in true keeping with the free market ideal. Why isn’t government enacting such laws? Instead it seems that they are changing the laws to cater further to the largest fish in the fishbowl.
Even Adam Smith, a proponent of free markets, wrote the following in the Wealth of Nations regarding monopolies:
““The legislature, were it possible that its deliberations could be always directed, not by the clamorous importunity of partial interests, but by an extensive view of the general good, ought, upon this very account, perhaps, to be particularly careful, neither to establish any new monopolies of this kind, nor to extend further those which are already established”
Wellll, imagine that! Alden and his PPM negotiating with Dart, the “devil” they refused to deal with when they were a previous Government – simply because UDP had been negotiating with Dart! However, seems like they are simply paying lip service to their campaign promise because they really didn’t achieve much.
Having said that, however, Dart is perhaps the most stable company in the Cayman Islands in the long-term and it is wise for Government to work with them. The previous Government saw this long ago but now Alden is playing catch-up. Hopefully, many of the jobs referenced will be filled by Caymanians – preferably long term employment.
PPM(Poor People Mistake)
Before you sign or agree to nearly anything these days, there is normally amount of fine print involved. It’s easy to not want to read the fine print, since most of it is wordy legal jargon, but its is extremely important to make sure you understand exactly what you are signing. What a mess.
Driftwood O.B.E
UDP (Unna Dumb People)
Thanks for setting out in detail what one McKeeva Bush was incapable of doing.
With Thanks,
Caymanian 4 Cayman
So lets see what has seemingly been agreed.
(1) The damaging room tax sharing which Dart could apply to every hotel they own – not just build (i.e. if they buy Westin, Marriott etc) that also sets the precedent for any other hotel that comes along, is being removed.
(2) This room tax sharing was supposedly to pay for the road that has been built. This is a legal commitment Govt owes to Dart based on the already signed NRA agreement and the work they did on the road.
(3) Dart has now agreed to forgo the their rights to the hotel room tax and instead will receive a longer period of concessions that will allow them to get paid back for their spend on the new road (less the cost of the road that is being closed)
(4) However, if Dart do not build so as to receive the benefit of the concessions then they get nothing.
(5) The faster they build the faster they get repaid.
(6) So the added concessions cost Govt nothing unless stuff gets built, and if stuff gets built then the country wins (jobs, infrastructure, income when they sell property they develop etc)
People.. this gets the country in a better position than where we were before. That is a good thing. The last agreement by UDP was dangerous and left Dart with the upper hand. They had a legal agreement that they could have gone to court to support.
This government has persuaded them that it is better to do the right thing and in the end this will be a win win.
This also forces Dart to develop which then speeds up their total economic control of the country. The PPM just sealed the turn over of Cayman to Dart. Why are you all so blinded by Darts money that you cannot see the surrender of the Cayman Islands to his Dollar. It just plain scares me. Dart has proven over and over around the world that he is not a saint. Can you say MONOPOLY???
We struggled for years to break the C&W monopoly and now we are encouraging Darts. In countries around the world it has proven over and over that it is not in the peoples best interest to give so much control to one entity no matter who it is.
More noise from the premier. The above article clearly states that he will receive other concessions. Further more now Dart wont be dealing with dump and the government has to foot that bill. Nothing new from Alden, what a guy loves to toot his own horn.
Why do you think that Govt will have to foot the bill for a waste management solution. There are many companies that are interested in creating an environmentally sound solution through private investment and then operating the plant for profit (return on their investment). Try not to put all your eggs in the one basket.
There’s not one single company that offered to put the money up for the Dump remediation. It is and has always been estimated that it will cost the tax payer in excess of 100 million dollars to create a Waste Management solution for Cayman and that doesn’t include doing anything with the trash currently at the the GT Dump.
That’s a crock of crap.
The whiteman from east end whom gave you recycling offered to take care of all your waste problems instead you have treated him like some POS and he is going to move back to the states sooner than later
The trash problem is not exactly Dart’s fault, it’s Ozzie Ozbodden who’s caused that delay.
Really. What happened to the previously properly agreed solution? Nothing to do with Mr. Bodden. Maybe you should go ask Wheelabrator what happened. Or ask McKeeva as he is more accessible.
This is not a claw back! Government is not getting anything that wasn’t in the agreement already.
Everyone is forgetting that as part of the For Cayman Alliance Agreement, Dart Realty was supposed to remediate the George Town Landfill, build a new facility, and buy the land for that facility etc, which it has not done. This was all part of moving the road away from Seven Mile Beach.
According to reports, the estimated costs for the remediation are estimated US$32.5 million – US$42.5 million. Plus, the the capital costs up to complete Phase 1 of a new Waste Management Facility at about US$26.5 million, which includes the land acquisition. Operations of the new facility were to be the responsibility of the government.
So, let’s say that total cost would be US$64 million.
According to the Value for Money review from PWC, “the rebate provided by the Hotel Tax Rebate could represent up to $63.2m (on an NPV basis) of CIG foregone revenue over a 20 year period”.
So, what exactly has the government clawed back?
Also not realized from the For Cayman Alliance are
• The extension of the Reverend Blackman Road to connect the Esterley Tibbetts Highway to Willie Farrington Drive.
• a new public access road to Barkers National Park
All of this, and we still have Mount Trashmore. I am not surprised the government is touting getting back what should have been in the first place as a win.
PPM clawed back the 50% accommodation tax that the UDP gave Dart in the original agreement. That is huge. The UDP gave that away without an end point. The billions of dollars that would have been lost in that was ridiculous and unending. Thank goodness the PPM got that back.
The original deal did have a cap on it of how much he could recoup..
I’m sure Dart would still happily move the dump, as the cash he would pay out would be met by an increase in the value of his land in the area, but Voters want to keep the dump where it is and apparently do nothing to it other than the same piling high policy it has had for the last 30 years.
Cayman voters apparently do not care about their environment as it will affect their children more than them, so that is all good.
I am a Caymanian and a voter. I care about our environment. Dart was not going to MOVE the dump. Simply create a new one somewhere else. Covering the existing pile does not seem wise. In 50 years it would have lost about 10 foot in height according to the Dart folks. Do you not think that it would be better to look to get rid of as much as possible through waste-to-energy, recycling, etc.
No, they probably don’t. Remember you’re either for whatever Dart is selling or you’re against them. (For Cayman doesn’t come in to this alliance.)
Haha….not wise? Ironic coming from a caymanian who has no idea or no money to remediate the landfill at its current location which is impossible
The dump was going to be correctly Capped and turned into much needed green space in GT, with walking and bike paths and the ongoing maintenance of the site would have been financed my Dart as well, also it would have stopped the leaching into the North Sound that’s currently destroying that fragile marine environment..
Capped dumps all over the world are successfully turned into parks and nature reserves.
Just Google Capped Dump turned into nature reserve and you will see plenty of examples.
Can you link to a single published statement by a Dart representative stating what you have just claimed on their behalf?
For all of you who seem to have forgotten what the whole deal included, here are the actual details of the Deal.
Elements of the deal include:
Dart to give government 110 acres of land for a new solid waste disposal facility in Bodden Town and to construct the first phase of that facility;
Dart taking ownership of the George Town Landfill, leading to its closure, capping and remediation;
Dart to extend the Esterley Tibbetts Highway north from itsterminus at Raleigh Quay to Batabano Road in West Bay and create at least one more feeder road from the highway to West Bay Road;
Government to give Dart about 2,500 feet of West Bay Road starting around Raleigh Quay Road and going north, leading to the closure of that section of road.
Dart to give government 26 acres of land for usage on the Esterley Tibbetts Hiqhway;
Dart to give government 70 acres of land in Barkers for inclusion in the National Park;
Government to give Dart about 70 acres of land near Salt Creek;
Dart to give government approximately 150 acres of land in the Central Mangrove wetlands in the middle of Grand Cayman;
Dart to provide $18 million of funding for community projects, including land for schools, affordable housing, education facilities and district parks;
Dart to redevelop the former Courtyard Marriott hotel, creating a new four or five star hotel with more rooms, conference facilities and other amenities;
Dart to commence construction on the first ‘for sale’ residential phase of Camana Bay by the third quarter of 2011;
Government to rezone certain Dart land holdings, including about 40 acres of mangrove buffer at Camana Bay;
Dart to get 100 per cent abatement of development fees and import duties in relation to construction activities on its Camana Bay, Starfish Point and West Bay properties, up to a maximum present value of US$44 million, or up to US$54 million if the costs of remediation of the George Town Landfill exceed project estimates. Once the cap is exceeded, Dart to get 50 per cent abatement of development fees and import duties for a further period of 15 years;
Dart to get a 50 per cent rebate of hotel taxes levied pursuant to the Tourist Accommodation (Taxation) Law for all hotels it develops or acquires and renovates or refurbishes for a period of 10 years after each hotel is opened or renovations or refurbishments are completed for any hotel permitted or acquired within 30 years from the date of execution of the definitive agreement;
Government to bring environmental tort reform legislation relating to the George Town Landfill;
Government to provide Dart with assistance in permitting through various boards and agencies, excluding the Immigration boards.
Landfill
The key element of the deal for the Dart Group focused on resolving the George Town Landfill situation. Without resolution, Dart said it could not move forward with further residential build-out of Camana Bay. The Dart Group said the landfill was the “single most commonly stated hurdle for potential purchasers of various residential units at Camana Bay” and that the proposed hotel on the site was negatively impacted the same way.
Premier McKeeva Bush announced in January that the Dart Group would acquire the George Town Landfill and provide a site and foundation for a new, modern solid waste disposal management facility elsewhere on Grand Cayman. That site will be in Bodden Town, just east of Midland Acres near an old quarry owned by Justin Bodden.
Dart will close, cap and remediate the George Town Landfill, converting much of it into a public park. Dart recently purchased the land in Bodden Town and will create a platform for the new ‘eco-park’ solid waste management facility.
As part of the deal, the Dart Group will complete the first phase of that facility, a properly engineered lined, capped landfill. Dart, however, will not operate the new facility. Operations and implementation of other aspects of the facility such as waste-to-energy and recycling would be up to the government or another private sector entity.
It is estimated that the cost of doing the necessary environmental investigation, capping, closing and aftercare work on the George Town Landfill will cost the Dart Group $32.5 million. It will cost an additional $26.5 million to plan and build phase one of the new solid waste management facility, including the cost of the land. The balance of the more than $80 million cash outlay from the Dart Group for infrastructure will be in the extension of the road.
I suggest you revisit the Dart waste “management” proposal. A piece of land with a couple of lined holes. No building of a “new facility”. As for remediation of the existing landfill. Covering it up with dirt & grass and leaving it for 50 years does not instil me with confidence. I hope that when we get a plan and a new facility (privately funded & operated for profit) it will include the mining of the old trash to remove as much as possible. Thereby increasing the profit potential for the investors.
I would be interested to hear your proposal as to what you would say to the next hotel developer when they (& the existing hotels) insisted on the 50% tax rebate.
Profit are you kidding me?I have been in waste management for donkey years the profit comes from the tax money I get paid and the less of it I spend the bigger the profit. The garbage its self even if I can recycle it is just a small amount of money that adds to my profit. Its your tax dollars that give me profit.
Dart never pretended to have a waste management proposal…., it was always upto to caymanians to run the new landfill……which is where the problem is..given caymanians terrible track record with waste management
Thinker says how did you obtain my PenName something is not right with this website or you posting under my name come up with your own name copycater
Don’t worry Tracey, I am sure the dump remediation is on the backend of this deal, Dart is not going to build anything more at Camana Bay if he has to live next to that ” stinking dump”
Soon come.
Ha ha so UDP gave half away, now the progressives giving the entire cayman away. Calculate this deal and you will see dart is getting more than what he was originally getting. lol
Dumb ass. The PPM got the accommodation tax back.
And as for Safehaven…you seen anyone developing that? Any successful developments over the last 20 years? Safehaven flopped. How long has that actual space been meant for development? Let Dart Develop it.
The reason it was hard to develop SafeHaven was because the land was owned by the government and only leased to developers, so no one would by homes there without owning the land. Now that Dart can own it outright it’s a major games changer for that property. Dart wins again in this deal and will make hundreds of millions of dollars from the sale of homes they build thier. The CIG needs to stop trying to out negotiate the big boys..
Yes the land was not being developed because it was not freehold and no one would buy it.
Dart buys it from the Country at market value and pays the stamp duty on the sale as well and Dart and Country wins. Dart develops it and sells to buyers and country gets stamp duty on the sale of land. Dart and Country wins again.
Sounds like a real win win to me. So stop being so negative.
Not being negative, just pointing out that fact that Alden is trying to make it seem like he took something back from Dart. When in reality he gave them more..I am actually all for it because the CIG would have no idea what to do with this track of land..
You are the Dumb Ass if you can’t see what they did!!!
What a bunch of BS. Incentives are to be expected but they must be fair for all including the already existing businesses. Show us your calculations.
From what I can see – Dart gets concessions to pay for the roads they built but they only get concessions, and thus paid back, if they carry out their additional developments. This makes a lot of sense to me.
Thank you Alden for levelling the playing field.
Premier can you tell us what agreements have been made with the developers of the supposedly “luxury” Beach Bay hotel? 2015 is not 2010. Transparency please? UDP changed strata laws for this group. Last year PPM changed the planning law and agreeing to build roads. What else is coming down the pipe? What types of incentives? What types of concessions? More law changes? This smells like the bulk fuel storage facility.
Keep up, pay attention, read and learn. With an attitude like that you will always be who you say you are.