Business 101: It takes money to make money.
It’s a business principal that applies to governments world-wide as well as to private companies.
Many states and local governments in the United States offer tax incentives to get business and industry planted in their communities to hire local workers and generate income.
So when the Cayman Islands Government agreed to a waiver of US$4.6 million in import duty last year, it was just practicing good business, said The Residences at The Ritz-Carlton, Grand Cayman Developer Mike Ryan and Leader of Government Business McKeeva Bush in separate interviews with the Caymanian Compass.
The concession was just a drop in the sea, the two men say. It was also less than the original request of $22.3 million. The concession is less than 1 per cent of the value of the entire project.
‘This is completely unrelated to hurricane restoration,’ said Mr. Ryan. The project has no deferrals or concessions on hurricane related rebuilding materials. In fact, Government will now get more revenue from the project than it would have if the hurricane never happened.
The $440 million Ritz-Carlton, Grand Cayman will offer 365 rooms and suites and 69 private condominiums that comprise The Residences where top units are selling for US$40 million.
When all is said and done, The Ritz-Carlton, Grand Cayman will have generated $500-plus million when it opens. That figure goes up to $1billion when all phases are completed. The resort will account for 7 per cent of the Cayman Islands gross domestic product.
‘The concessions are a fraction of what we would have received anywhere else, even in the United States,’ said Mr. Ryan. ‘Once we invest we’re not going anywhere. We’re concrete and steel. We’re here to stay.’
The resort will employ more than 1,000 people who will take their paychecks to local banks and spend their earnings with local retailers.
The concessions were granted after discussions that took place before Hurricane Ivan in September, said Mr. Bush.
‘We have a duty to assist business by bringing in sustainable developments such as the Ritz, Dart and other long-term projects,’ Mr. Bush said.
‘We have to spend money to make money. That’s the only way to do business. The Ritz is going to generate $140 million (per year) in revenue. We didn’t waive a whole lot for them. We spent a little to get a whole heap.’
Mr. Ryan said recent media reports casting him and the resort in a disparaging light are bad publicity for the Cayman Islands.
Such reports, he said, could cause developers and those who would invest in the Cayman Islands to lose confidence in the country. ‘That’s going to hurt everyone who lives here,’ he said.
Mr. Ryan said he has nothing to hide and has offered his personal telephone number, 516-3699 for those with questions.
‘You’ve got a question? Phone and ask me. There’s no magic to it.’
Mr. Bush said that if The Ritz-Carlton, Grand Cayman had been open when the September storm blew through, the Cayman Islands wouldn’t have lost this tourism season.
‘We talk about tourism. I have long supported the Ritz. It will be good for this country,’ he said.
Countries that don’t offer concessions for major developments are dying throughout the world, Mr. Bush said.
‘This isn’t about Mike Ryan. It’s about long-term sustainable development. We have to encourage business.
‘I think we’ve done the right thing.’