Fines won’t help, says hotel

| 27/07/2010

Cayman Islands News Grand Cayman Island headline news(CNS): Owners of the former Hyatt hotel, who had already raised serious concerns with government representatives prior to the introduction of the new environmental impact fee, say the fine won’t help. Government’s new $25,000 per day charge on properties hit by hurricanes, or left derelict for any other reason, will give insurers even more incentive to pursue a “delay payment” strategy, Embassy Investments has said. Only one of the hotel’s 15 insurers has not paid up, and though Embassy says that bringing some of the issues into the public realm has helped others settle and move the process forward, the fine may now undermine the wider goal of redeveloping the site.

Embassy has stated that its own, as well as other insurance disputes could drag on longer as insurers see the fine as a reason to further stall payments in the hope that fees will force claimants to give up the pursuit of their insurance claims. The owners believe that the dispute has far reaching implications, beyond its own settlement, for all property owners in Cayman with insurance policies. The introduction of the daily fee for those who are at odds with insurance companies will actually hinder settlements rather than hasten them, the reverse of the government’s stated aim.
 
Representatives of the property say it will not only undermine efforts of any policy owner who has not yet been paid, but also on future claims.
 
The former Hyatt site to the north of the West Bay Road has remained untouched since it was destroyed by Hurricane Ivan almost six years ago in September 2004. Although the owners quickly cleaned up and renovated the Beach Suites site on the south side of the property, the more severely damaged northern side of the hotel has remained untouched ever since as a result of the insurance battle.
 
Given its situation, the hotel states that the punitive fine is unfair as the dispute is not the fault of the property owners. Email correspondence between Asif Bhatia of Embassy Investment and the Cayman Islands government stretching back to 2006 reveals the hotel owner had tried to speak with the former minster of tourism on numerous occasions about the situation with the Hyatt.
 
Throughout 2009 Bhatia then pursued meetings with McKeeva Bush, who now has responsibility for tourism, but the various meetings were cancelled by the premier.
 
"As previously reiterated, there is a lot more at stake here than the reinstatement of our hotel," Embassy stated. "Given Cayman is in an area which is prone to hurricanes, the failure of insurance companiesto honour their obligations under insurance policies … will be a key issue for most local citizens and businesses on the Island."
 
When the premier first revealed his intention to bring in a $25,000 daily fee, he said that while government had goodwill towards the developer, whatever the continued dispute regarding the Hyatt’s insurance settlement, six years was long enough and the site was having a serious impact on the area in general. “It is hurting Cayman to have this situation,” McKeeva Bush said earlier this year. “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.”
 
Bush brought the new impact fee as part of the Amendments to the Development and Planning Law 2008 revision, which passed in the Legislative Assembly last week (12 July). The amendment now provides for the planning department to issue orders to owners to clean up their properties within an agreed time period. If the owner then does nothing in that time frame the government will levy a $5,000 a day fee for regular properties and a $25,000 fee for those in hotel zones until the property is refurbished or demolished and the site cleared.
 
The former Hyatt owners are not the only property owners that could be impacted by the fine as there are still a number of other properties around the islands that remain derelict as a result of Ivan damage.
 
The condo development, Dolphin Point, on North West Point Road in West Bay, as well as several private homes in many of the districts, remains deserted since Hurricane Ivan. Although not an Ivan victim the Divi Tiara on Cayman Brac is also now in a state of major disrepair since management made the decision to close the hotel in 2006 as a result of economic conditions and airlift issues concerning the Brac.
 
Most of the abandoned properties are not in hotel zones and will face a lesser fee of $5,000 per day if they are subjected to renovation orders by the central planning authority.  However, the Courtyard Marriott, which was abandoned by its owners more recently over what it claimed was water damage following Hurricane Paloma, is in the hotel zone and could be subject to the $25,000 as the property continues to fall into further disrepair.
 
The site is owned by developer Stan Thomas, whose property company Thomas Enterprises ran into difficulties during the recession and placed a number of projects into bankruptcy and others on hold. Other reports suggested that Thomas may also have had some legal complications surrounding the purchase of the Courtyard Marriott in 2007 and government’s stamp duty bill, which is why the hotel has been deserted.
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Comments (21)

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  1. Anonymous says:

    why did the ocean side section re-open while the inland side remain closed?…..answer this and you will solve this ‘riddle’…….

  2. Anonymouse says:

    Why not just do like Mac did with his own place. Build a high wall around it and no one will be able to see it.

  3. Just Sayin' says:

    "…six years was long enough and the site was having a serious impact on the area in general. “It is hurting Cayman to have this situation,” McKeeva Bush said earlier this year."

    ___________________

    This is really something of a joke as just 500m down the road you have the biggest eye sore and health threat on this Island, and it’s been going on for more than six years with no solution in sight!   I think Mt Trashmore is doing more to "hurt Cayman" than a few run-down hotels.  Can’t say I even notice the Hyatt when I drive down 7MB.  If he’s going to impose this fine on properties which are still an eye sore from the hurricane, why stop there.  He could get huge money by fining all those home owners who have 3-5 abandoned and rusted vehicles in their front yard, unmowed lawns, peeling paint, etc – I really can’t see the difference between those properties and the abandoned Hyatt.  Both eye sores in my opinion.

    I guess this is just another wonderful idea of lining the coffers that BigMac has come up with, which ultimately will cost Cayman more in the long run. 

  4. Anonymous says:

    Renovate the properties and rent or sell as low income housing.

    • Anonymous says:

      A better idea is to stop importing cheap labour and there will be no need for more low cost housing!

  5. Anonymous says:

    How will the fines be enforced if the property owners don’t pay them?

    I would suggest at some stage they just need to be bulldozed down and the property needs to be taken by government and the owner can not sell or re-develop unless all fines are paid?

    Will this be applied to the abandoned houses and buildings anywhere else on Island?

    • Anonymous says:

      I have never heard more crap in my entire life. Caymanians are clean and tidy people, if people cant afford to rebuild after the Paloma damage then what do you expect them to do? If certain Politicians cant afford to buy their own clothing from their big salarys, how in the hell do they expect for the poor underpaid residents to build back mansions. It is more better if they take their time and get a stronger building built back. Remember how terrible Cayman Brac looked before the Paloma hand outs?

      • Rev says:

        how in the hell do they expect for the poor underpaid residents to build back mansions.

        Cayman must be one of the only places where "poor underpaid" residents can still afford mansions in the first place.

        • Anonymous says:

          "C ayman must be one of the only places where "poor underpaid" residents can still afford mansions in the first place."

          I think the person above you was being sarcastic.  I’ve noticed that whenever anyone mentions that their houses was damaged by Paloma they get thumbs down.  Is that because it happened to Cayman Brac?

  6. Anonymous says:

    There are also some properties not empty which are looking shabby. The St Matthews Residences, formerly Indies Suites is overgrown and looks abandoned. This needs to be taken care of. Visitors to Public Beach / Tiki Beach see this – having two large properties next to each other lying in such a neglected state doesn’t give a good impression.

  7. Anonymous says:

    This result was obvious. I’m no rocket scientist and I posted a comment to that effect some months ago when the Government announced the fines. Nonetheless, I applaud the Government for trying to do something. The same situation is occurring with the Marriott Courtyard site. 

    Hmm, wonder of the Government is bold enough to enact a process to sieze these properties (and dispose of them if a buyer is found). The Corurtyardsite would require less work and would make an excellent hotel training school. Food for thought.  

    • Credo says:

      The Courtyard would probably make an excellent hotel. . .

    • Anonymous says:

      May I enquire through this site what happened to Governments promise to do something about Divi Tiara on The Brac?. this site is appalling!!!!. A swimming pool that looks like a septic tank, buildings falling down, and worst of all the best beach on the Brac unusable. Comments welcome pleaseeeeeeeeeee.

      • Anonymous says:

        why not ask the person that made the promise?

        • Anonymous says:

          So are you sayng "nothing should be done"?. Come on!!, apart from banking, tourism is the main earner for the economy of the country. As a previous writer points out Mt. Trashmore is a huge blot on the landscape and it stinks!!!!. Environmental health???. The Government is responsible at the end of the day. On the Brac the Brac Reef Resort is SUPERB now the building work is complete, snag is visitors have to pass the Divi site to get there, and they will pass it every time they go out. If they want a stroll east along the beach the sites they will come across look like a war zone!!!. So come on Government, ordinary citizens can’t put it right, put a compulsory purchase notice on the property and knock the place right down and let the Brackers and visitors enjoy the best beach on the Island!!.

      • GC Bhoy says:

        My comment is that I don’t really care.

        More accurately the free market probably tends to deal with this sort of thing better than intervention and in a time of deflated property prices empty and dilapidated real estate is going to be more common.