Indies Suites club members expressed outrage Monday to learn the timeshare property would not be rebuilding, and in fact had been sold.
‘I feel very upset and betrayed,’ said club member Kevin Rademacher, adding that he was surprised to learn the property had been sold to St. Matthew’s University School of Medicine on 27 January.
‘(Club members) are confused as to how the property could be sold with a large percentage of timeshare weeks still outstanding,’ Mr. Rademacher said.
According to their contract, Indies Suites club members were given rights to use the accommodation for however many weeks they contracted for a 99-year period that commenced 1 January, 1993.
Indies Suites Limited had the contractual right to sell the property ‘subject to the rights of members’.
Another Indies Suites club member, Bruce West, said he was here for three weeks from mid-March to the beginning of April and had several conversations with Indies Suites owner Ronnie Foster about the situation.
Mr. West said Mr. Foster stated at the time that he was unsure if the property would be rebuilt.
‘When asked if he would be rebuilding, the stated that the cost of insurance prior to Ivan was expensive and that it would now be doubled and that he didn’t know if in fact he would be able to afford that,’ Mr. West said.
‘I specifically asked hem if he didn’t rebuild, would the investment members be compensated at all for their loss, like a percentage of what they had paid. Mr. Foster said he was working on that.’
Mr. West indicated he was shocked to learn the property had actually been sold in January, some two months before he met with Mr. Foster.
‘I guess I would say that Mr. Foster out-and-out lied directly to my face,’ he said.
The insurance situation was another point that upset club members.
Mr. Foster clarified a statement he made to the Caymanian Compass last week, explaining that when he said ‘we only had $200,000 insurance’ he was referring to the amount of insurance settlement Indies Suites had actually received to date.
In total, Indies Suites had $2.5 million in insurance coverage, but he said he has been told he was underinsured.
‘I was insured for what the bank required me to be insured for to get the mortgage,’ he said. ‘I didn’t know anything about underinsurance.’
Mr. Foster said he’s been told Indies Suites was 50 per cent uninsured.
‘We’ll if I was 50 per cent underinsured, then I should get at least $1.25 million, but they said it doesn’t work that way,’ he said. ‘The last offer I got was for $500,000, which with the $200,000 I’ve already received would give $700,000.’
Mr. Foster mostly blames the insurance company for what has happened.
‘If I would have gotten $2 million, I would have rebuilt the thing, not only for the club members, but for myself, so that I could have had an income,’ he said.
Having lost its roof, the property continued to deteriorate, Mr. Foster said, which helped put the price of rebuilding even higher.
‘If they had given me enough money to get the roof on, I could have saved a lot in there,’ he said.
Mr. Foster said the $200,000 interim insurance settlement payment received ‘about three months after the storm’ wasn’t enough to make any repairs.
‘The bank was taking a $30,000 mortgage out every month and the Labour Board came down on me and made me pay the employees one week salary for every year they were there, which was another $54,000,’ he said.
As for the club members, Mr. Foster said ‘there’s nothing for them to get’ explaining that the proceeds of the sale to St. Matthew’s went to pay off the mortgage.
Club member Mr. Rademacher said he thinks he should receive 100 per cent compensation for his unused timeshare weeks.
‘We’d rather see Indies Suites rebuilt so we can continue to come and visit, however, at this point, this might not be an option,’ he said.
Mr. West said he thinks, at the very least, club members should receive half of what they paid for their weeks.
The matter might end up in court, although Mr. West hopes not.
‘I would like to see Mr. Foster settle without going to court,’ he said. ‘Mr. Foster apparently has lost enough as it is, along with the investment members, not to mention the many, many people of your beloved Cayman Islands.
Mr. Rademacher said he still loves the Cayman Islands, its people and its culture, but it has had an effect nonetheless.
‘This situation has clearly tainted many views of the legalities of investing in Cayman.’
Tom McCallum of the Reef Resort timeshare property said this situation could affect industry.
‘Timeshare in Cayman is a highly desirable commodity, but much of that comes from the strong positive reputation of Caymanian developers among our visitors and investors,’ he said.
‘The current Indies Suites situation therefore has the potential to cause significant damage to the positive reputation of Cayman.
‘With the Thompson Group being a Caymanian resort developer and operator with a significant stake in the timeshare industry, I hope and trust that Mr. Foster finds a way to step up to the plate and provide cash appropriate compensation to his loyal timeshare members for the loss of use of Indies Suites under the terms of their club membership agreement.’