Bush warns owners of stiff fines on derelict property

| 18/04/2010

Cayman Islands News, Grand Cayman Island business news(CNS): Speculation that work could start on the derelict former Hyatt Hotel in the Seven Mile Beach area before the end of the year could become more certain as a result of a planned move by government. The premier told CNS on Thursday that he intends to introduce a $25,000 daily environmental impact fee to property owners who leave properties to deteriorate in hotel zones, as has been the case with this site. McKeeva Bush said he had given the developer in this case more than enough time to address the problem and it was now time for government to take direct action.

Whatever the continued dispute regarding the insurance settlement and the fact that the government has goodwill towards the developer, he said,  it is six years since Hurricane Ivan and the situation with that particular site is having a serious impact on the area in general and other property owners.
“It is hurting Cayman to have this situation,” added Bush. “I want to see the problem addressed and I have given the owner time and nothing has happened. We are going to put in place a daily fine of $25,000 for derelict properties in hotel zones.”
He said he hoped to bring the necessary legislation to the Legislative Assembly sometime during May, which would not only force the owner to take action regarding the Hyatt but serve as a warning to others in the future not to allow properties to seriously deteriorate.
Aware of the continuing dispute, Bush said he had been asked to intervene, but he said the government was not in a position to interfere with the court’s decisions and whatever the owner’s battle with the insurance firms, the premier said he had to consider the impact on Cayman.
Recently, the general manager of the Grand Cayman Beach Suites (the new name of the property since the Hyatt removed its branding as a result of the problems with the part of the hotel to the north of Seven Mile Beach) said that most of the insurance issues were settled but there remained an outstanding issue with one insurer.
Powers has been outspoken in the press about the situation recently on behalf of Embassy and Asif Bhatia, the owner of the hotel, and has accused Houston Casualty Company (HCC), one of the many insurers involved, of failing to honour its commitment.
Appleby, the insurer’s law firm, has denied the accusations, however, on behalf of HCC (see Letter to Cayman News Service and Cayman Net News) and noted that the hotel cannot use this part of dispute as an excuse not to develop as they are such a small part of the picture. Furthermore, Appleby said, the public statements made on behalf of Bhatia and Embassy by Powers have been false and misleading.
“Contrary to the impression being given to the media, the role of HCC in respect of the insurance dispute is and always has been minor,” Appleby said. “The US$50m of insurance on the Hyatt was (subject to a deductible of US$200,000) arranged in various layers in various markets, including the London insurance market. HCC’s London branch wrote a small percentage (7.8%) of part of a US$15m excess layer. HCC’s maximum share of the total sum insured of US$50m was therefore less than US$1.2m.”

HCC claim to have a number of legitimate reasons to decline Embassy’s claim, which is the subject of legal proceedings in the Grand Court. The lawyers also asked why, when so much of the claim is settled, those insurance proceeds are not being used to reinstate or repair the hotel.

Appleby also revealed that, aside from the insurance policy dispute that remains pending, there is a further contractual dispute, which is subject to arbitration proceedings in London.
“A final Award has recently been issued in those proceedings, which provides a clear picture of the course of the unresolved policy dispute between Embassy and HCC and casts light on why HCC has not been able to settle the dispute with Embassy. HCC would like to release the final arbitration Award so that the people of Cayman can benefit from this full picture,” Appleby said, adding that Embassy are refusing to disclose this award despite going on record saying they want to provide the people of Cayman a proper context in the interest and openness and transparency. “HCC invites Mr Bhatia and Embassy to consent to the Award being published to the people of Cayman,” Appleby’ said on 1 April.
In response, Powers said on behalf of Bhatia that he welcomed the fact that Houston Casualty Company had chosen to engage with Embassy in a more public forum. However, Powers did not reveal the details of the award or any timeline for the planned re-development of the site, as asked by CNS and of major concern to the people of Cayman.
Accusing HCC of being the ones making false, misleading and misrepresentative statements, not Embassy, Powers said Houston Casualty Company had influenced the other Insurers and was a parent company of some of those involved and therefore not such a small player as claimed. “The fact that Houston Casualty Company has no legitimate reason to continue to wrongfully withhold insurance policy proceeds which are rightfully due to Embassy is clearly evident from the fact that all the other 15 insurers have now already paid the agreed policy proceeds,” Powers said, adding HCC had not paid a “single cent despite its clear obligation.”
The general manger said more was at stake than the reinstatement of the hotel, given Cayman’s vulnerability to hurricanes.
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  1. Joe Bananas says:

    Just one more Brain fart in a long list showing just how far (and getting deeper by the day) the Caymanian premier has his head in the sand.

    Identifying problems is easy when your surrounded by them.  Maybe the premier and or the Government should try fixing one or two of them (or at least stop making problems).

    Not too hard to see why Cayman has so many problems and no fixes.

  2. Bugsy says:

    Take the dam thing over like Castro did back in the 50’s man!

    • Anonymous says:

      I agree, take it over and turn it into an international hotel training school.

  3. Chimera says:

    The Cayman government has simply not made it attractive enough to invest in tourism.  Had this not been the case simple market forces would have led to the redevelopment of sites.  Alas, a poor quality product which is getting worse indicates the serious problems Cayman has with the very little it has to offer.

  4. Anonymous says:

    Yeahhhhhh……..here comes another empty unenforceable threat from our esteemed Premier. LHM !!!

  5. The Truth is Out There says:

    What about the dump?  I have to think there is a far greater environmental problem there than in an abandoned building. 

  6. Anonymous says:

    I say good riddance and about time yetplease don’t let this be another ‘blowing in the wind call’ please ensure $25,000 fine is enforced. Government should also charge the Beach Suites and Asif  the daily15% tax charges that have been lost  since Ivan and this applies to the former Marriott Courtyard. Government also need this bill to go to all property owners and every land owner should maintain their properties to a high standard.

    My suggestion is if nothing happens with the Marriott Courtyard in 6 months time then government should take it over and make it a Hotel School which is what we need here. We’ll encourage young Caymanians to work in tourism and attract international students as seen with SMU can be a major boost to our economy.

    • Anonymous says:

      Agreed on Cayman needs a Hotel School, however where do you draw the line on private property owners rights…Government has no right to tell a private business what it can and can’t do on it’s own land…Or should we start comparing every other form of property…What is good for one property owner needs to be good for all…That’s the law – How much should we charge the Government per day for the dump…Mr Bush should be looking to resolve the problem by sitting down with the owner and insurance company…Not threatening private property owners rights – this looks bad to investors…

  7. Anonymous says:

    What about property in other areas that encourage rats etc close to other peoples property?

  8. Anonymous says:

     You want to be careful with such laws though….dear old Mr. X (insert Caymanian name of your choice) might find himself at the wrong end of this law if his property is in the same zones as a hotel and is deemed an eyesore.

    Whilst the law is a good idea for this one example, be aware of unintended consequences in years to come.  

    • Anonymous says:

      Good points there are quite  afew old derelict houses as you drive along West bay road right in these ‘hotel zones’ that would fit this bill of being an eyesore. I noticed one right outside Luca the other day and will probably notice more and more if I kept an eye open as a tourist might whilst exploring. These are right in the main tourist drag. Whilst some old style Caymanian houses certainly enhance the view and try to bring some authenticity to the tourist product and area some of them are just eyesores.

      The Hyatt is off the main strip and to be fair you did build a dual carriageway right through the middle of the hotel so it’s not the most desirable place for a hotel to be situated anyway. Very few tourists would drive by it anyway so it’s not like many people would see it.

      The vast overdevelopment of the whole seven mile beach area has already started to kill off the Cayman tourism industry and the increasing crime has began nailing down the coffin lid, so rebuilding some decrepit hotel is no going to save it.

  9. Anonymous says:

    Fines are only as good as the collection thereof. It’s good of the Premier to initiate some action but in reality those offenders (Hyatt owners and Stan Thomas who bought the Courtyard) will sit back and laugh because they know we can’t collect. This should give us something to think about in the future when permits are issued, perhaps include some clause permitting the Government to claim the property if it is left in uninhabitable condition for longer than 1 year.

    We have to stop being lackeys to foreign ‘investors’ because we are always beholding when we make them feel that the country needs their investments, without conditions. 

    Dr. Shetty’s project is a good time to start.

  10. Anonymous says:

    This wont help us in the Brac with Divi Tiara as we have no zoning so fining in this zone means nothing in the Brac – great way of the government saying that they will not be fining Divi Tiara owners for their derelict property. Oh well as the Brac turns.

  11. Twyla Vargas says:

    Well I sure do hope it does not begin and stop only in areas of Hotels, because it is a crying shame to see the derelict buildings in the Bodden Town District that has been there since Hurricane Ivan, 6 long years ago.  Aparently persons who had these homes damaged, must have collected Insurance money and split, sold some off the the homes cheap, and left he Island..  Bush overgrown, rat infested newsance.

    Also to top the list are two govenment buildings.  One infront of the Bodden Town Post Office, which is the old clinic, and the other supposed to be an old peoples home situated in the area close to the Mission house.

    These two buildings are locked up, rottening down eye sore, when they could be utilized by residents.    I do hope some attention will be paid here.

    • anonymous says:

      I agree with Ms. Vargas – six long years and some owners are still satisfied with their mess. Their  Insurance money invested in another country.  They just don’t give a Sh##t about the condition of our Island.

      Will we ever collect fines? I hope so!!! whilst many others could be charged per foot for "Property neglect"  all over the Island.  After six years they have no intention of  cleaning and beautifying these properties.  Our poor Caymanians  had to find the time and money to put their lives back. Why can’t they do the same.

      As a concerned resident  the two buildings near Nurse Josie’s Centre  in Bodden Town that was  purchased by a Government  of the past. Presently,   serves no purpose to the community,  except to harbour unwanted guests with illegal practices. 

      It is quite time enough for such buildings to be utilized and not left to fall apart.  Minister Scotland and Mr. Seymour you are invited  to visit and see the demise and condition with a plan of action forthcoming. 

      • Twyla Vargas says:

        I just have to continue my comments on this subject, which I believe is a good move by the Premier, but picture this, Bodden Town Cumber avenue is getting a second childen’s Park within 100 yards of the of the other, the Harry McCoy Children’s park is getting a sister park just a stone.s throw away, Great, but not necessary.   We have 9 chldren in the area.

          It would have been better received to have cleaned up the Governmentstrong cement building next to Nurse Josie Senior  Centre.   This building is being used for all sorts of things at night.  We have the Pines n George Town, full, also with residents from this  dstrict.  Their loved ones have to travel from Bodden Town eveyweekend to visit with them, wen we have a strong cement lovely building with lots of yard space and fruit trees left to rotten down.   Something is not right and no one is saying a thing.   Another 93 year old resident fro the area will be sent to the Pines in George Town next week, and the family is already missing her.

        Why cant this place be cleaned, small repairs, opened and used as what it was purchasd for.  It willonly need a small professional staff, cleaner and reception.   But no, money should ewasted on another children park, that when you throw the ball  it will go inpeoples property of inthe road.

        The old clinic too.  Inside is a disgrace with rats and dirt left to  rotten.   What a shame.  what a sme, what a shame.  Who will take the blame?

  12. Anonymous says:

    yet more talk about this issue…. i gaurantee mac will not bring any legislation about this to the la in may…..

    if this legislation is brought in sometime it should be applicable to all properties…. so many parts of george town look like the third world….

  13. Anonymous says:

    Yes, Hon Premier please also do something about the many derelict vehicles parked on the side of public roads and in neighbourhoods.  These vehicles make good neighbourhoods look like ghettos and run down shanty towns.

    There is no use in the public reporting derelict vehicles to the police or DOE they don’t even respond.  If it’s ok for derelict vehicles  be parked in neighbourhoods without getting a fine then the same should apply to the Hyatt. What is good for the goose should be good for the gander.


  14. Anonymous says:

    Well I am supportive of this effort by the Premier.  That property needs to be done away with and rebuilt and 6 years is long enough.  What gets me is that the owner of this property is suppose to be some Billionaire if I am correct.  Shame on him.  Good job Mac!!

    Now my next question is WHAT ABOUT THE OLD COURTYARD MARRIOTT.  That is an even worst EYE SORE sitting there directly on Seven MIle Beach. You see wooden crates made as barriers since they cannot pay a Security company to protect the property and the grass is almost 6ft high. XXXXX Well then donate the building to the Cayman Islands Government to use to place some homeless families or those living in the trailer park.  Do something with it.  it is a complete disgrace. 

  15. And blah blah blah says:

    Do we have a hotel on Cayman??  Where is it?  Oh……that hotel

  16. Anonymous says:

    For once…..he says something that I agree on!

    It’s sad to see the hotel the way it is, but it’s true! Something needs to be done about it.


  17. Anonymous says:

    Something must be done soon as this is a rat infested place. A fine is in order Mr. Premier.

    • anonymous says:

      Hon Premier, Good thinking and decision making.  With permission some of the materials can be sold for collection of further funds by government to compensate for the long delay of the removal.  

      • Anonymous says:

        This is all good talk in the political arena but it will take a broader look to correct the problems that exist here in Cayman. Like previous comments why are the other propeties not being targeted by the government such as Spanish Bay, Courtyard, Dolphin Point or Divi. If the government going to fine these owners it will be long court battle to collect if they are in receivership such as Courtyard is. Are the banks or stratas going to pay… not likely. What will the government do if the these owners just tear them down – will they try to force them rebuild. Can you force owners to build if they are not viable businesses. We have to remember that at the end of the day – it is their property and investment. The larger concern is that the government is not addressing the problem as a whole, not only businesses need to be looked at but also residential properties as well. Right now residential zoned properties are being use for scrap yards and industrial use and they are getting away with it. DEH has no desire to go after these offenders as they have unenforcealbe laws and no means to correct the problem. As a home owner I have seen my neigbouring property turned into a scrap / junk yard and have made numerous complaints without any action taken. My property is being devalued as and the government will not address the owners. I abide by the laws and am being penalized for being lawful. If the government is going to address the owners then they should address the insurers as well..get them to pay up. I participated in the Earth Day clean up and within the 1/4 mile stretch in West Bay there was 3 derelict properties and one was obviously a crack house by the strewn drug implements about. The whole problem need to be addressed and not just focus on one legitimate business who is trying to get their claim settled.