By Alan Markoff, Pinnacle Media
June of this year will mark 20 years since Ken Dart bought the old Coral Caymanian hotel on Seven Mile Beach and the 238 acres of land it included.
A year earlier, Dart had purchased the adjacent West Indian Club hotel as his personal residence, but he had other plans for the Coral Caymanian and its lands, which are now part of the master-planned, mixed-use development, Camana Bay.
“There were a lot of acquisitions made in that ‘95/’96/’97 time frame,” said Dart Realty (Cayman) Ltd. CEO Mark VanDevelde, “but the beginning of that was the Coral Caymanian property, which is really the catalyst for all of Camana Bay… and I think it’s fair to say that was the beginning of our commercial development activities on the island.”
Over the past 20 years, those commercial activities on Grand Cayman have been extensive, including spending about US$1 billion in building more than 600,000 square feet of office, residential, retail and other commercial space at Camana Bay.
They have also included the purchase and renovation of what are now known as the Regatta Office Park, the Island Plaza, the Flagship Building and the Cayman Islands Yacht Club, the latter of which was part of some 300 acres bought in 2011 that included the old Courtyard Marriott hotel. That hotel was subsequently demolished and is being replaced by the Kimpton hotel, which is scheduled for completion next year.
The Dart Group also purchased several businesses, including the conglomerate of jewelry and other retail stores known as Island Companies, the Cayman Distributors wholesale alcohol company and two retail liquor outlets, Blackbeard’s and Big Daddy’s.
There have been other commercial activities as well, including a nursery, the Salt Creek subdivision, and in Camana Bay, two restaurants, a bookstore and a cinema complex.
When VanDevelde first came to Cayman 21 years ago to work for Dart here, it was just him and a few others in the office. Now the company and its associated companies have nearly 700 employees.
Along the way, there has been some opposition from the public and even from certain elements of government, something which manifested itself in failed attempts to construct much-needed cruise ship docks and to deal with the ongoing problem of the George Town Landfill.
The latter project was part of a larger initiative called the For Cayman Investment Alliance, which also included an agreement to close a section of West Bay Road in favor of a new road inland, with Dart Realty paying for the extension of the Esterley Tibbetts Highway all the way to Batabano Road in West Bay. The roads part of the For Cayman Investment Alliance deal, which became known as the National Roads Authority agreement, resulted in public protests and even an unsuccessful lawsuit filed in an attempt to stop the closure of any part of West Bay Road.
Still Bullish on Cayman
But 20 years later, in spite of opposition and a changing social landscape, VanDevelde said Ken Dart remains bullish on Cayman.
“Probably even more so in the last year or so,” he said, adding that after the issues with the For Cayman Investment Alliance deal, the Dart Group has been able to move on, learning some lessons along the way. Getting the Progressives-led government to finalize the NRA agreement was an important step.
“I think there’s been a fresh look with the new government, and what we’re feeling from them and what we’re hearing from them,” he said, adding there’s also been a pick-up in the local economy.
“All of the good building blocks of Cayman still exist here,” he said. “We have every opportunity to… improve on what’s here and continue to be the jewel.”
VanDevelde acknowledged that Cayman is facing some problems, but he doesn’t think they are insurmountable.
“It’s a small enough place that we could fix the problems,” he said. “With the right partners, including government, around the table it’s achievable. We can fix the problems and make this a fantastic place, more so than it is already.”
As for those who vocally oppose Dart, for whatever reason, the advice Ken Dart gives his organisation is “don’t get distracted.”
“He’s very… thick-skinned in that regard,” said VanDevelde. “One of our values is reason and logic, and he’s a very logical person.”
When naysayers criticize Dart’s activities, VanDevelde said Ken Dart’s approach is, “Don’t let the naysayers distract you from what you know is a good thing. Keep your eye on the ball, which could be decades out. We know we’re doing the right thing. We know we can do and deliver what we say we’re going to do. We’ve got great people in the organization and surround ourselves with really great advisors. We know what’s good; we 100 percent believe in it.
“He would pull you aside periodically and say, ‘take the high road, there’s no reason to respond to that; you’re not going to win a fight in the media, so don’t even attempt to do it.’”
VanDevelde also noted that the vocal opposition tends to come from the same, small number of people.
“You could probably name those individuals… in one single breath,” he said.
“So when you look at it holistically, everything gets amplified by the fact that we live in a small community. So maybe it looks like a bigger deal than it actually is.”
The Dart Group’s belief is that over time, the majority of Cayman Islands residents will come to have positive impressions of the company and what it is doing.
“When we say we’re going to do something, we do it,” he said. “I think we do it quite well. I think people see that, recognize it, appreciate it.”
VanDevelde said the Dart Group believes it is doing things that are good for the community and good for the island.
“It’s such a small community, when you do good things, people recognize them and it’s hard to hide,” he said. “You’re not going to win everybody over, that’s never going to be the case, but, if you’re doing good, it’s… going to be noticeable to others.”
Beyond its development and commercial activities, the Dart Group has donated money, venues and expertise to a variety of charitable causes, and has led several community enhancement initiatives.
“I think that we’ve been successful in having others recognize the positive contributions we make, whether they be development, whether it be, more recently… the focus on waste management, some of our glass recycling, or working with Junk and others on the collection of recycling materials,” he said. “I think we’re leading the way in that regard, and I think people see that and recognize the value of that. It’s not an approach to win anyone over, it’s just the right thing to do, it’s a good thing to do. We have the resources to be able to start those initiatives.”
Over the years Dart has contributed in excess of US$3.8 million in charitable giving and sponsorships in the Cayman Islands.
“Whether it be the [district] parks initiative, whether it be other types of philanthropic activities that we support in the community, people see that more so now than in the past as authentic,” he said, adding that the Dart Group spends a lot of time scrutinizing the requests for support.
“As you can imagine, we get a lot of requests for a lot of things, and in almost all instances, they’re good causes, but we have to focus, and we spend a lot of time [ensuring] we’re getting the best bang for the buck for what we believe the broader community needs.”
In looking at the broader community needs, Dart looks at immediate needs, through initiatives that address unemployment or crime, but also long-term needs, like initiatives that address education, with a goal of enhancing Cayman’s education system and creating an educated populace, VanDevelde said.
“When you’re looking 20, 30 [years] down the road, that’s got to be a priority for us as a community,” he said. “We can’t lose sight of the needs of today, but we need to have a world-class education on the island.”
When people are working and feel safe because they’re able to pay their bills, buy their groceries and take care of their family, they in turn are able to give back to the community in positive ways. Because Cayman is such a small community, the economic environment is easier to shift and even manipulate to a certain degree, he said.
“We’re a slave to a lot of broader issues, but… even in the bad times, with the right people and the right structure, [there are ways] we can protect ourselves, more than we have in the past,” he said. “With the right people and making it an attractive place for investors that want to come in and invest in the island and invest in a variety of ways, we could build a pretty robust economy.”
VanDevelde said he’s been impressed with the job Finance Minister Marco Archer has done in getting the finances of government back on track and in ensuring that the Cayman Islands will have “more of an autonomous control over our economy.”
“I think we’re definitely going in the right direction,” he said, noting, however, that government will still have an ongoing inability to finance much-needed infrastructure projects, meaning that public-private partnerships – like the National Roads Authority agreement – will be the best way to get those projects done.
“Working together we can do those things and we’ll be stronger for it as a country,” he said. “If that can alleviate unemployment and crime and get people financially stable from a personal level, the impacts of that in the community give-back that is possible with that stability, I think has no bounds.”
VanDevelde said that the government has shown the willingness to discuss a variety of infrastructure partnerships.
“We’ve had many conversations with the new government about the landfill, about [the For Cayman Investment Alliance] more broadly, our NRA agreement, and the future 10 years [investment plan] that we’ve presented. We’ve received… a lot of support, at lot of positive feedback,” he said. “We’ve provided them everything that we had on our waste management facility design… to assist in any fashion with them getting down the path as quickly as possible, so ultimately we can collectively come up with a solution for the landfill or broader waste management needs. “
Although the NRA agreement took longer than expected, Dart was pleased with how the two sides worked together for a resolution.
“It was slower than expected, I think on both sides… but all in all, it’s been a very positive relationship and I think the support we’re getting back from them – even from some who were critics of ours in years past – is another indication that we’ve proven that we can be held at our word, that we’re going to do things right, and we truly have the community’s interest at heart.”
VanDevelde said that behind the scenes, the message Dart is hearing from government is very positive with respect to pro-development and promoting the island for inward investment, and that they not only see the need to do that, but they also have the desire to do it.
“That will really broaden the economic outlook and opportunities for the island, which is a lot different than what I had heard, call it eight years ago, which was a lot more insular, a lot more ‘we’ll do it ourselves, we’ll build the schools, we’ll build the roads…,” he said. “It’s a much different tune now than we’ve heard in the past, which I think is very, very positive.”
Spreading the Word
Although Dart Realty continues to create economic activity in the Cayman Islands, and it plans to spend a least another US$1.3 billion over the next 10 to 15 years in development works, the country really needs other investors as well, VanDevelde said.
“We need more people like Ken [Dart], that are not just doing it because it’s an investment opportunity,” he said. “They do it because they fall in love with the island, there’s a connection to the island and they’ve got the means to invest in the island without the need for immediate payback.”
He said Cayman is seeing more of that kind of investor – mentioning as an example professional golfer Marcello Santi and the kind of people he brings to the island to participate in his golf tournaments – who also fall in love with Cayman.
“You don’t have to be billionaires, but people of means that add more to the fabric of the island, that are not going to be a drain on resources and they will want to give back in the form of building houses, and in the restaurants and they might want to invest in X,Y or Z because Cayman is their home, or their second home.”
To attract those kinds of investors, VanDevelde thinks Cayman needs to be more proactive in telling its story, and Dart is getting more involved in doing just that. Already this year, Dart’s COO Jackie Doak has collaborated with Cayman Finance to give a presentation of its investment plans in New York, and then she did something similar, with Premier Alden McLaughlin, at the Caribbean Council reception at the House of Lords in London.
“We’re really trying to put Cayman in a positive light,” he said. “The focus is on Cayman, its economic vitality and the welcoming nature from an investment perspective, and also certainly on our financial services industry and why it’s considered to be as great as it is.”
Since last December, Dart has also done the presentation of its 10-year Cayman investment plan many times in Cayman, to groups large and small. So far, about 900 people have seen that presentation, which focuses on the completion of the Kimpton hotel, Dart’s expansion plans for Camana Bay, the relocation and expansion to four lanes of a section of the Esterley Tibbetts Highway through Camana Bay, and the building of a new five-star hotel on the Seven Mile Beach part of Camana Bay.
“We’ve had a number of organizations call us to make private presentations to them, whether it be for their staff to understand what’s happening, or for clients of theirs,” he said.
VanDevelde said part of being proactive in messaging is embracing the various financial service providers and their clients.
“We’ll meet every one of them because we think if they see what we’re doing and they see that we’ve been here, we’ve gone through the troublesome period, we’re still here, and here’s our commitment going forward… that from an economic perspective, it could be a great place to spend time and to invest,” he said. “And I think we’ll get some of them. I think the story is compelling and I think there are a lot of things coming together that do make it a great place to invest.”
Cayman in 2035
Over the years, the Dart Group has acquired significant land holdings all over Cayman. Additional purchases of land adjoining Camana Bay have pushed the original 238-acre development to about 600 acres. There’s another 690 or so acres farther north along the Seven Mile Beach corridor which includes the properties purchased from developers Stan Thomas and Mike Ryan, along with the Salt Creek development and other lands. They also have lands in West Bay, Bodden Town and North Side.
There aren’t plans to develop all of their land holdings. Some – like the lands it owns in the Central Mangrove Wetlands – will be held for conservation purposes, while some other small parcels that were acquired as parts of large purchases and aren’t part of their long-term plans, could be sold down the line, VanDevelde said. The rest could be developed, based on market needs.
“I think to some degree [development] will be reactionary in nature,” VanDevelde said. “As the economy continues to grow out east, if Shetty’s [Health City Cayman Islands] grows as anticipated, it’s going to throw a lot of opportunity in the eastern districts for future development, whether that takes a form of residential, or commercial or lodging type of development. I think our looking at land banking some lands… is a measure of providing future opportunities if you’ve got a successful Shetty development, if you have a successful Ironwood development, because you will have more activity out there and more people living out there.”
Population growth will drive much of the market demand, which will in turn drive development plans. VanDevelde said that Dart had extrapolated some statistics to estimate population growth over the next 20 years to determine various residential and commercial office space needs.
“One take on this was using a 2 percent annual growth – our historic annual growth has been about 3.1 percent – but if you push that out at 2 percent for 20 years, it looks like it gets us to a population of 80,000 or so,” he said. “I think 80,000 to 100,000 over 20 years is achievable, looking at historical trends and with the continued enhancement of what Cayman has to offer.”
A population of 80,000 would bring the number of households on Grand Cayman to 33,000, a 50 percent increase over the 22,000 households currently on the island.
“So we’re looking at an incremental 11,000 households on the island over that 20-year period of time,” he said, adding that if population growth is more in line with historical growth, the increase in households could be as high as 18,000.
“If there’s a [population] spurt coming, it’s not just infrastructure – roads, sewerage – you need, it’s also households,” he said. “They need places to live, so I think we’re well positioned at Camana Bay to deliver if that growth occurs.”
However, because Dart owns lands in various places on Grand Cayman, they could develop wherever it is needed. “If the growth is geared toward East End because of Shetty’s activities, if it’s Camana Bay driven, if it’s West Bay peninsula driven, we’re positioned to have lands to be able to react to that,” he said.
“If people want golf course living, we have a golf course and we can develop that. So we want to understand the market, understand what the market wants, and then we want to deliver products that the market wants.”