Treasury still owed duties for Ritz development

| 28/03/2011

(CNS): The developer of the Ritz Carlton-Grand Cayman still owes the public purse some $6 million in connection with duty concessions for the construction of the five-star hotel on Seven Mile Beach. Despite revelations last year by the premier that Michael Ryan would be re-starting payments to government with interest, officials have confirmed that no payments have yet been made. A re-payment proposal has reportedly been submitted to the finance ministry for consideration but it is now two years since any money was paid on the debt. So far over $3.8 million of the original $10 million has been paid but since payment stopped government coffers are now down over $2.7 million.

It is now six months since the premier told the country’s parliament about the outstanding duty and the developer’s plans to restart payments, but the last payment received by the treasury was still the one made back in March 2009.

During the time the developer was meeting his obligations to make the quarterly payments under the previous government he paid a total of $3,825,996. When the current UDP administration was elected to office in May 2009, however, the payments stopped, with $6 milllion still outstanding from the original deferment.

McKeeva Bush revealed to his legislative colleagues in September 2010 that the owner of Stingray and Condo Co (the companies set up to develop the hotel which had received the deferment) had asked for the payment plan to be extended as a result of the difficult economic circumstances.

Answering a parliamentary question submitted by the opposition, Bush said the developer had agreed to pay interest on a new payment plan and had not requested any write-off of the amount. The premier said he did not believe the extension posed any risk that government would not receive all the money owed. He said at the time that a rate of interest had not yet been worked out or the issue discussed in Cabinet.

It is understood that since the revelations in parliament the developer has submitted a proposal but government has not yet made a decision about the payment plan. CNS contacted the developer regarding the outstanding payments but a spokesperson stated that the developer could not comment as the discussions were still ongoing.

Since government announced that the payments had stopped, Orion development (another of Ryan’s companies which is developing Dragon Bay, a proposed new resort behind the Ritz-Carlton) has made a number of redundancies.

In December more than a dozen people from the Dragon Bay office, construction and sales teams were let go, which the developer said was a result of a review of the business. A spokesperson said at the time, however, that the Dragon Bay development was still going ahead.

It was stated that the Dragon Bay development was always planned as a long term project. “We made the decision to realign and refocus our business to improve and strengthen our core capacity to move the Dragon Bay project forward,” the spokesperson stated.

Some employees who were let go claimed not to have been paid all they were due and to have been poorly treated when they were suddenly let go. CNS asked the developer about these complaints but the office said it did not comment on individual HR issues. “It was with deep regret that we had to release some of our valued employees. As per company policy we do not comment on the terms of individual employees’ engagement or termination,” a spokesperson said.

The staff also claimed that there had been no sales at the resort for more than 18 months at the time of the redundancies. However, the developer’s office denied those claims. “As a result of their exceptional location, quality and services our Residences continue to be in demand and we have seen increased activity in recent months with a number or transactions occurring and the most recent closing last week,” the developer’s office revealed last month.

Category: Headline News

Comments (35)

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  1. Subway Cookie says:

    I just got an invoice this week from the Cayman Islands Hospital for an outstanding balance of CI$50. I request a payment plan as a result to economic difficulties.

    *stretches and puts feet up*

    What I am wondering is: who the heck voted for McKeeva, Juliana, Dwayne and all the other cronies? Why are we complaining now when we knew how much potential there was for disaster from electing these people? Someone (the vast majority) must believe in them or else they would not have been elected. “You lay down with dogs…”

  2. voiceofreason says:

    Perhaps they should try lowering the costs for those condos. All of those new SMB condos are WAY over-priced for what you get. Developers – time to stop being greedy. This ain’t the 80s anymore.

  3. Anonymous says:

     I did not hear these comments when Ritz was under construction and creating work and sales nor when they called up Treasury and delivered the room tax fees for the last 6 years!

     

    I am sure CIAA is not complaining of the landing fees from all those private jets. Nor are drivers of the Bypass complaining about the bridge Ryan built. Nor are the Customs department or the suppliers of food, flowers, drinks, weddings, limos, rental cars, etc complaining about the business and paying their import duties for stuff going to the Ritz.

     

    We really have to understand the total impact that the Ritz, the only hotel in the Cayman Islands ranked by Conde Nast readers (in fact ranked number 1) before one really puts into perspective these fees.

     

    Do I believe he should pay it?? — of course I do and the sooner the better but we have to understand the true impact the Ritz Carlton Cayman Islands have had on our island.   I would rather them stay in business and owe us the money than to close and we have no chance of getting it. The $6M really pales in comparison to the true financial impact.

     

    Let’s use some perspective here bloggers.

    • Anonymous says:

      Same kind of argument used for the stimulus packages in the US.  Leads to moral hazard.

      "I would rather them stay in business" – Why do you assume they would go bankrupt?

      "I did not hear these comments when Ritz was under construction and creating work and sales nor when they called up Treasury and delivered the room tax fees for the last 6 years!" – Yes, and this was factored into the agreement for what they would owe.

      "When the current UDP administration was elected to office in May 2009, however, the payments stopped" – From the article.  Is this because of cronyism or the recession?

    • Jonathan says:

      You did not hear because you were not listening. It is also because the smoke and mirrors McSheen was drowning out all common sense and forethought and in the most despicable way. The benefits gained pale in comparison to the price paid socially, environmentally, politically and ethically. Those who saw this coming around the pike were drowned out by the profligation of greed and a complete lack of care for the future of this country and the need to balance development with good stewardship of this small country. Instead what we got was a profiteering orgy the likes of which the previous supposed leader of Turks and Caicos must be much envious of. If this country continues to allow it’s economic backbone to be prostituted to the highest bidder then it will only get much worse. If anyone is surprised that the number of Caymanians employed at the Ritz Carlton today (including the numbers in the satellite service industry) does not begin to reach any measure of acceptability then you were not looking either. My only question is where do we go from here and NEVER AGAIN would be my humble yet vociferous opinion. This is all said with all due respect to the author of the post which I have replied to and it was in no way meant to insult him/her but the truth of the matter is that I quit my much loved job when I was made aware of the connection with this Ritz Carlton and I have a personal boycott of the place which stands to this day and it has been so since it’s conception.

  4. Anonymous says:

    Is michael Ryan above the goverment? Or better than the people of the cayman islands?

  5. Anonymous says:

    RYAN NEEDS TO COUGH UP

    Ryan came he with nothing but bigb ideas and now has a plane and a huge private yacht in addition to property, so why is the country giving him credit when he has enriched himself at the expense of the Caymanian people who through their XXXXX representatives gave him concessions which he will not pay. Time to clean up.

  6. ALL SEEING says:

    Macman:
    You forgot the insurance sell-out after Ivan. He refused to have a stenographer present will negotiations took place. Our government buildings insurance money was onthe line and we were sold out. It is folly to have him in charge of anything.

  7. Anonymous says:

    Relax folks. The Yacht is up for sale. The proceeds will cover the debt.

    OR! We can just dig a deep enough channel in the North Sound, have it sailed here and turn it over to the Customs and Police as an addition to its present fleet of junk boats.

  8. Anonymous says:

    Charles Clifford said this would happen. Lets get Mac out of office Cayman…….and Mike will have to sell his plane to pay his debts to us !

  9. MACMAN says:

    Now let me think…

    First Cayman Bank???

    Boatswains Beach???

    Ritz Carlton???

    Cohen Loan.???

    Watler Port Facilities???

    East End Port Facilities???

    Dredging the North Sound???

     

    What do all these have in common?

     

  10. Anonymous says:

    Let me get this straight.  Ryan owns a plane, but can’t pay his debts.

    Can’t make this stuff up.

  11. McCarron McLaughlin says:

    I would put my head on the chopping block to say the balance won’t be paid before May 2013.

  12. Annon says:

     Would like to dedicate this to the Hon. Premier Mckeeva W. Bush

     

    http://www.youtube.com/watch?v=yu2NqfISm9k&NR=1

  13. Fed up and broke!!!! says:

    What a mess!!! But yet Govt is threating people to take them to court for outstanding hospital bills that I’m sure is less then $6M.

    • Anonymous says:

      If it was you or me, we definitely would have been in court by now or whatever the loan was being held against, it would have been taken away from us…….yep the Ritz sure did bring in good business for Caymanians…lmao lmao

      • Anonymous says:

        No it wouldnt. Because Caymanians dont like to pay for their own services either. They will meet with the MLA to cover their hospital bill, plus air ambulance and CIG will guarantee payment to US hospital. All the while, the Caymanian does not even give up a payment plan.

        I have NEVER heard of Government taking any Caymanian’s house to settle a bill owed.

        It just gets “written off” on those government accounts that noboday cant even seem to “balance”?

  14. Anonymous says:

    The Ritz can owe the Government 6 Million but the lil common man that owes them 2 hundred they want to take them to court. May be the Debt collector need to start knocking on there doors then this counrty mite not be in the debt that it is in wa u say Mr. Bush.

  15. Anonymous says:

    With hindsight it’s worth asking if R-C had been forced to pay their way the same as everyone else would the islands have lost out? If they decided not to go ahead with the deveopment the losses to CIG would have been minimal but if they had paid up a good chunk of the current deficits might have been covered. Definitely would have been worth the gamble.

    It seems to be time to take a stand with these developers – something along the line of, "If you want to come here this it what it will cost you in terms of genuine job creation opportunities and taxes or duties. If you don’t like that peddle your goods somewhere else!" A lot of other places do it without any problems so why not Cayman?

    As the situation with a number of developers has demonstrated in recent years, "Give someone an inch and they’ll take a mile."

     

  16. Anonymous says:

    I wonder, if I could offer deferrals of payments would there be a condo or two in it for me? No matter. I don’t have the stomach for selling out my country and my fellow citizens.

  17. Greedy pigs says:

    This is a wake up call for Caymanians.  Your forefathers are rolling over in their graves!  a 39% increase in population over a decade and the government is broke?!?

    Bloated Civil Service, Jaunts to Spain and global travel budgets,"Deals" for developers without accountability, building "contracts" for buddies, churning out illiterate teenagers who turn to gangs = A XXXXX BUNCH OF FOOLS RUNNING THIS PLACE!

    I’d welcome the crown to come in and take over.  Fire the bums who have sold paradise and led us into debt, crime, and despair.

     

     

    • Hallowe'en Jack says:

      We are rolling over dead people now!  My goodness. 

      Can they apply for key cadaver status?  Would that make them a skeleton key?

    • Anonymous says:

      a wake up call??!! the alarm clock dun fell off the nightstand and knocked you’all out! 

  18. Anonymous says:

    the incompetency of caymanain politicians never ends…. just another day in wonderland…..

    • Anonymous says:

      One word sums up this situation, UNBELIEVABLE!!!!. All the Glitz and Gloss, $8 million dollars for a condo, wonderful functions blah blah blah —- but they can’t pay the bill!!!!!.

    • Absurdistani says:

      I think you mean “just another day in Absurdistan”. 🙂

    • Anonymous says:

      Incompetence is only one of the potential explanations and a relatively benign one.

      Cicero noted a long time ago that when you want to understand an action or inaction involving a politician the question to ask yourself is "Cui bono" – who benefits.

      • Anonymous says:

        Surely you cannot be suggesting that someone, say a politician, benefitted from the Ritz Carlton development? That would be appalling because if I recall the developers were offered more than just duty benefits, they even got a change in the law over building height. Could that possibly mean they had some kind of tame politician to engineer the change? Thats a terrible thing if true. Thinking about it, if they had that kind of influence it would explain why government doesnt even chase the reduced amounts of tax, even so, I find it difficult to believe there could be people like that in elected positions, surely it cant be so?

    • Anonymous says:

      ummm I don’t think it’s incompetency … I think someone is very competent indeed. 

  19. Anonymous says:

    How do I get one of those "payment plans" where you submit proposals and not pay anything for two years?

    I would also like to have a "friend" who could waive any interest payments if I asked him.

    • Businessman says:

      May be you need to be in a Government appointed board like the National Investment Council. I’m sure he’ll be able to convince new investors to come to Cayman explaining them how to get these "special arrangements"

      For once a good choice of a member for a council!

  20. Anonymous says:

    The Premier did speak about this issue of non-payment. But his voice was muffled as he was in Ryan’s back pocket.