Dart Realty confirmed an agreement has been reached with the Cayman Islands Government on a Third Amendment to the NRA Agreement.
The provision in the Agreement that allowed Dart to retain 50% of the Hotel Room Tax has been eliminated. It has been agreed that Government will be in full receipt of the 13% room tax generated by Kimpton operations, as well as all subsequent Dart hotels.
“We understood Government’s desire to replace the 50% hotel tax rebate that had been intended to enable Dart to recover some of the infrastructure investments made in the NRA Agreement, and to incentivize our long-term development activity in Cayman. At Government’s request, we were open to alternative recovery and incentive methods, and feel this has been achieved in the agreed Third Amendment,” said Dart Enterprises CEO, Mark VanDevelde.
In place of the hotel tax rebate, Dart will receive an increase in the development duty waiver cap already in place through the NRA Agreement, as well as other duty abatements and waivers related to Dart’s development over the next 30 years.
The Third Amendment to the NRA Agreement also provides for Dart to purchase the freehold title to the former Safehaven lands, which include the North Sound Golf Club, in accordance with legal requirements regarding disposition of Crown land.
“The real estate market has proven that both international investors and local purchasers can be hesitant to buy leasehold property, no matter how long the lease period. By agreeing to buy the property outright at fair market value, we will not only provide Government with a revenue injection from the initial purchase price, but also improve Government’s opportunity for ongoing revenue from the real estate activity that will result from eventual residential developments,” said Dart Realty Chief Operating Office, Jackie Doak.
Mrs Doak confirmed that Dart has committed to an additional US$400 million in development activity in addition to the US$300 million currently being expended on the Kimpton Hotel project. The US$400 million investment includes a new five star hotel at Camana Bay, and the realignment and expansion of the Esterley Tibbetts Highway through Camana Bay. Government has committed in the Third Amendment to provide a legal mechanism that will allow construction on the elevated development plane that will be created over the realigned Esterley Tibbetts Highway and the West Bay Road.
“In agreeing to draft legislation for air rights, Government has proven that it is prepared to be innovative and flexible in offering solutions to the committed investors that are contributing to Cayman’s long term success,” said Mrs Doak.
In total, Dart has invested US$1 billion in Camana Bay to date, and expects to invest another US$1.3 billion in Camana Bay development activity over the next 20 years.
“We have a positive and productive working relationship with the Government, which not only gives us confidence to move ahead with our development plans, but also sends an extremely encouraging message to other investors in the tourism and financial services sectors that are so pivotal to Cayman’s continued prosperity,” said Mrs Doak.