2011 was an eventful year for the Dart Group, but it is hoping 2012 is even more eventful.
A lot happened with the Dart Group in Cayman during 2011.
“Not as much as we wanted,” said Dart Enterprises Ltd. CEO Mark VanDevelde.
The reason for the frank expression of disappointment was because in early December 2011, the Dart Group had two key goals in mind for 2011: To help the Government find a solution to the long-standing George Town Landfill problem and to provide an economic stimulus to kick-start Cayman’s stagnant economy. Neither goal was reached.
Managing Director of Dart Realty (Cayman) Ltd. Jim Lammers said the Dart Group understood that the Government had a need to invest in key infrastructure, but didn’t have the resources or ability to do it.
“When we entered 2011, there was a recognised concern that the Islands were in the throes of a significant economic challenge, the likes of which Cayman had not seen in decades and there weren’t any signs that it would turn around quickly,” he said, adding that the idea was to reach a creative win-win solution where there was give and take on both sides.
The Dart Group had made it clear that without a satisfactory solution to the landfill issue, the residential segment of Camana Bay – and all the economic stimulus it would bring to the Cayman Islands – wasn’t possible.
VanDevelde said the Dart Group had a couple of meetings with the United Democratic Party caucus to discuss ways in which it could help the Government afford a solution to the landfill problem.
“Our position in general was that dealing with the landfill situation would be the catalyst of pushing forward with Camana Bay,” he said. “The landfill was a major concern for many years and we made an unprecedented offer to fix a major problem.”
But the playing field expanded very quickly, partly because the Government had infrastructure needs beyond just the landfill and partly because less than a month later, the Dart Group had purchased from developer Stan Thomas the hotel formerly known as the Courtyard Marriott, plus some 300 acres of adjoining land that featured about 1,500 feet of beach-front property.
That purchase gave the Cayman Government an important bargaining chip with which to negotiate with Dart, something Stan Thomas had also wanted: The closure of a section of West Bay Road. Because West Bay Road passes very close to the ocean where the new Dart beach-front property was located, the land on the ocean side of the road is too narrow to build on. As was the case with the Courtyard Marriott, any hotel/tourism development on the property would have to occur on the inland side of the road, forcing people to walk across busy West Bay Road. This situation didn’t work very well for the Courtyard Marriott, which closed in November 2008 after suffering relatively minor damage from the passage of Hurricane Paloma and never reopened.
Ultimately, the conversations between the Government and the Dart Group expanded far beyond just a resolution to the landfill problem and with the increasing complexity of negotiations came inevitable delays.
After months of negotiations, the Cayman Islands Government and the Dart Group announced in mid-June it had signed a nonbinding heads of terms agreement in relation to mega deal that not only involved a solution to the George Town Landfill, but also the establishment of a new, modern solid waste management facility in Bodden Town, the closure of 2,500 feet of West Bay
Road, the completion of the Esterley Tibbetts Highway from its current terminus all the way to Batabano Road in West Bay, the enhancement and widening of Seven Mile Beach Public Beach, the creation of a new public beach, and several land swaps.
In all, the deal committed the Dart Group to spend more then $100 million with no capital outlay or debt whatsoever to Government.
However, the deal was subject to the signing of a very complex main agreement and also to the processes required by law for the divestment of Crown property. As a result, progress slowed.
Because Cayman still needed an economic stimulus very badly, it was decided to split the less complicated road closure aspect of the overall deal away from the main agreement. This agreement was signed with the National Road Authority in early December, but is still subject to an independent review to ensure, among other things, that due process was followed and that government gets adequate value for the transaction. The review is scheduled for completion by March and once completed, barring unexpected results, will allow the Dart Group to move forward with the redevelopment of the hotel.
As a good faith gesture, the Dart Group will fund the commencement of the Esterley Tibbetts Highway prior to the results of the independent review and construction is expected to commence by the middle of this month.
Although it wasn’t everything the Dart Group wanted to see happen in 2011, Lammers saw the signing of the NRA agreement as a very significant step that bodes well for this year.
“We have had an incredible amount of what I’d call very intense negotiations on both the NRA agreement and more broadly on the main agreement,” he said. “I don’t know if there’s ever been more time spent in the negotiation of a deal in the history of the Islands.”
Lammers said a lot of progress was made during the negotiations, and that a lot of the “heavy lifting” had now been done.
“I think a lot of really positive things have happened that will bear fruit in 2012.”
A key element of the main agreement involves the divestment of the landfill property to the Dart Group, which will close, cap and remediate it and then create a public park on the landfill itself.
As part of the deal, the Dart Group will transfer 110 acres of land in Bodden Town to the government for establishment of a new solid waste management site.
The Dart Group will then create a new, properly engineered solid waste management facility with six, thermoplastic lined, landfill pods and then hand it over to the government.
“We’re not looking to be the provider of services; we’re not in that business,” said VanDevelde.
The Government would decide how it would want to operate the new waste management site, which would be big enough to facilitate a waste-to-energy incinerators or recycling centres if it so chose.
The proposed establishment of the new waste management site has caused some public protest, particularly from an ad hoc group of residents called the
Coalition to Keep Bodden Town Dump Free.
Lammers said the protests were expected.
“It’s perfectly normal and healthy,” he said. “It’s one of those things that’s a tough issue. It’s hard to find a community that doesn’t have serious debate about waste management issues. Cayman is not unique in that way.”
Lammers said he thought the public dialogue that took place on the landfill – which started with a concerted effort by a citizens group called WISE Cayman earlier this year – was mostly positive because prior to this year, the landfill had become “the elephant in the room no one wanted to talk about”.
“Now there’s much more dialogue,” he said. “And I think most people recognise to continue receiving garbage at the George Town Landfill is not tenable. There has been more and more convergence that this is a major infrastructure problem for the Island and we can’t keep going on the way we are now.”
Lammers said the reasons to cap and remediate the George Town Landfill “are very sound” and stressed that today’s environmental science creates new and better platforms for waste management facilities that will not resemble the current dump.
The Coalition to Keep Bodden Town Dump Free aren’t the only ones protesting against elements of the Dart/Government mega deal.
A trio of citizens groups – Save Cayman, the West Bay Action Committee and the Concerned Citizens Group – joined together to circulate a petition against the closing of the section of West Bay Road. Although the petition had a number of anomalies that prevent confirmation of many signatures, it contained the names of more than 2,300 voters.
While Lammers admits the Dart Group has its critics, he thinks the overall deal has the support of most people.
Dart Realty (Cayman) Ltd. Chief Operating Officer Jackie Doak agreed.
“It’s the concept of the silent majority over the vociferous few,” she said.
VanDevelde also believes there is “a strong majority of people who see this as a positive and want to see it move forward”, but he noted that the Dart Group seems to draw some opposition that other developers don’t have to deal with.
He noted that two other major developments planned for Cayman – the Devi Shetty Hospital and Medical Centre and Cayman Enterprise City – include some major concessions, but in neither case has there been much public issue made about them.
“We’re supportive of Shetty and CEC – we wish them luck – but we are held to a much different standard.”
Although Dart strove to strike a deal that was win-win
with the government and the country, attention is often focused on one side of the ledger.
“Some people have been concentrating on what’s Dart getting and losing sight of what the country is getting,” VanDevelde said.
Doak pointed out that no one ever said the deal wasn’t good for Dart.
“But we see this as a good deal for the country as well,” she said.
Even though it consists of many different entities, the Dart Group as a whole has some 500 employees in Cayman, making it the largest employer behind government.
“We can’t keep them if we’re not a profitable entity,” said Lammers. “It’s that simple. We have to be economically viable. We’re not ashamed in any way to say that.”
But while Dart needs to make a profit, it can also offer many Caymanians good career opportunities, Lammers added.
VanDevelde said Ken Dart looks at his Cayman investments differently than his investments in other places.
“The capital base and the fact that this is Ken’s home makes him more flexible… it allows him to look longer term,” he said. “Cayman is unique because Ken has this affinity with the Is
land. But he still has to make smart business decisions.”
Another reason VanDevelde thinks there’s more opposition to Dart projects is the lack of relationship between the Dart Group and the political Opposition.
VanDevelde said one of the things the Dart Group was hearing from the Opposition side was that they didn’t have enough information about the proposed deal with
Government, so they tried to set up meetings with them to give them more information.
“We reached out multiple times to the Opposition… to the Leader of the Opposition and to the independent from North Side,” he said, noting that none of them met with them and only one of the members of the Opposition – East End MLA Arden McLean – even responded.
“It’s disappointing they haven’t taken the opportunity,” VanDevelde said, adding that the Dart Group really wants to consult with the other legislators and get their feedback.
VanDevelde said the lack of discourse with the Opposition was concerning heading into this year.
“I don’t mean to be over critical of the Opposition,” he said, adding that the Dart Group isn’t aligned to one political side or the other. “We try to be as apolitical as possible.
“But our point is, we’re here to stay; [governments] change over time. We would really appreciate the ability to build relationships across the aisles; we feel we’re doing good things here.”
With an election year coming up, VanDevelde says the politics get amplified.
“You can see in a preelection year dynamics that some of these issues become political footballs just from the political expediency that can be derived from it.”
VanDevelde said he’s heard that some politicians have a concern about being associated with the Dart Group.
“I understand that from a political standpoint, but it’s also concerning that when we know what we’re doing is good and we bring a lot of things to the table, [we can even meet],” he said. “We’re still hopeful we can get them around the table and address any concerns they might have.”
Lammers said the Dart Group is focused on doing what it feels is best for the Cayman Islands and its residents.
“We’re trying to do stuff that everyone on the Island, regardless of their political stripes, sees value in.”