No resolution on derelict hotel

| 09/09/2008

(CNS): Almost four years to the day since Hurricane Ivan destroyed the former Hyatt Hotel, the Minister for Tourism, Charles Clifford, admitted that there was still no resolution in sight for the derelict property in the heart of Cayman’s Seven Mile Beach area. The Minister said last week that he has been trying, but has failed, to contact Asif Bhatia, the wealthy owner of the property, for more than a month.

Bhatia has been in a legal battle with Lloyds of London over a reported $50 million-plus claim as a result of the damage to the property following Ivan’s onslaught in September 2004. It is alleged that the insurance firm has offered considerably less than this sum and Bhatia has refused to budge, leaving the prime hotel site in ruins.

Clifford said that for more than two years he has been as concerned over the former Hyatt site and the failure to act as he is has been over the closure and failed sale of the Divi Tiara Beach Resort in Cayman Brac, and wants to see a resolution.

“We have considered a number of options and at this point in time we have decided to give the owner the opportunity to try and settle this insurance claim one final time,” said the Minister at last week’s press briefing. “There are other options which the government can take, of course, some of which may require regulation. It is not in our interest to simply allow that property to stay there in the condition that it is in.”

The Minister had said several months ago that the government had not ruled out the possibility of a compulsory purchase. However, Clifford now seems to favour the owner selling the property to another developer.

“I would imagine that it is attractive toa number of buyers and there seems to be some reluctance to sell the property which concerns me. If it is not going to be fixed then clearly it should be sold so someone else can redevelop it,” he said.

However, local real estate expert Kim Lund of Remax says that the problem here is not about a forced sale but a failure with the local judiciary. “The government’s focus should not be on forcing the owner of the property to sell, but rather on improving the expediency of our legal system,” he said. “That would be a much more prudent area to target, which could also have very positive repercussions for the whole country if some real improvement could be achieved.”

He cited previous experiences in Singapore where the judiciary was overhauled, and said as the country has developed an efficient judicial system, it could be used as a model for Cayman.

“We obviously have flaws in our system when a case with this importance to the country cannot be resolved expeditiously.  If I understand correctly, there was an opportunity for a Summary Judgment about 3 years ago, but it was thrown out of court.  A full court case then had to start, and this has obviously been dragging on and on, to the detriment of tourism to the Cayman Islands and property values for owners in Britannia,” he explained.

Lund said the location was a strategic site which has become an embarrassment to anyone entering Britannia or driving along the bypass.

“Because this cornerstone to Britannia and the Seven Mile Beach corridor looks so dilapidated and decrepit, it casts a very negative shadow on the residences in Britannia and the area in
general.  Real estate agents must sell nearby residences at a discount to what should be a much higher market value if the hotel was operating and providing full services, as in the past,” he added.

The best short-term solution for the hotel, he said, would be to knock down the buildings. “At least then, the vegetation could hide the vacant site and no one would have to look at decaying buildings,” he lamented.

 

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  1. Marek says:

    Many cities around the world have the right to seize properties which don’t meet minimum upkeep standards. In some cities, if your landscaping exceeds certain heights they will cut your grass and bill you, placing a lien on the property (then acting on that unpaid lien) seize the property.

    Here’s what the rumor mill says about this property and the insurance dispute. Mr. Bhatia claim is disputed by his carrier because they say the initial claim was X but because Mr. Bhatia failed to make the necessary repairs the claim has now grown to X-more with the insurers claiming that they should not be responsible for those additional costs as they are a result of the owners failure to effect immediate repairs.

    The local courts should immediately get involved in this matter. I don’t think there would be a single local objection. Either (a) the property is declared a health hazard, seized and sold with any revenues being paid to the owner or (b) the owner is told that a private resolution must be had within a reasonable period of time.

    The rumor mill also says that Mr. Bhatia is being sued by a number of contractors (both local and US based) who did initial cleanup work on the property after Ivan but have not been paid.

    Kim Lund’s comments ring true. Perhaps if the local realtors and homeowners beat the drum a little louder our local leaders will step by and force a resolution.

    Four years, is not a reasonable amount of time. 200 rooms for four years at 60% occupancy represents almost 44,000 room nights.

    Personally if Mr. Bhatia were that flush, I don’t think he would have let that $10 million in lost revenue slip from his fingers.

    Just saying…

     

     

     

     

     

     

     

  2. Anonymous says:

    The Hyatt is a disgrace on the beach and is not safe for tourist. The balconies are rusting and Hemingways has electrical wires all over the side of the building and the roof is a disgusting. Trash and junk is piled up behind fences as you enter Heminways. There are old tanks, ect which are not safe. We live at the Colonial Club  and it’s really awful to have that view. They don’t even trim their trees on beach which could hurt someone. It use to be the most beautiful Hotel . People make reservations there and think they are coming to the hotel they had visited years ok.  Hopefully the goverment can do something as it’s hurting tourism on the island.