Commission of Enquiry Commissioner Sir Richard Tucker has recommended the Cayman Islands Government exercise compulsory purchase orders in all cases where it determined it needed to obtain privately-owned land.
During the Enquiry, the Commission heard details of how the government paid three-times the amount appraised by Lands and Survey for a piece of land to be used in the development of the then-proposed West Bay cruise tender facility.
Sir Richard noted in his report that there was evidence to suggest successive governments had been reluctant to exercise compulsory purchase powers because of the ‘political sensitivities associated with depriving people of their land’.
‘In my view,’ Sir Richard wrote, ‘good governance requires that the compulsory purchase powers should be used in all cases so as to ensure that the acquisition procedure is transparent, fair and applied to all land owners equally.’
Auditor General Dan Duguay said he strongly supported the Commission of Enquiry’s recommendations on the matter.
‘The purchase of land by government has been a continuing problem and has been the subject of audit reports over many years,’ he said. ‘We believe that greater clarity in these kinds of land transactions is important.’
Mr. Duguay said the Auditor General’s office had already looked into the matter of previous governments paying more than the appraised value for land with regard to road compensation.
The Audit office issued a report for the half-year ending in June 2003 that looked at road compensation between 1999 and 2001. In seven of 19 cases, the government paid more than 10 per cent of the appraised value for land necessary for new roads.
In most cases, the settlement amount was between 14 and 20 per cent more than the appraised value. Two cases, however, were resolved through the intervention of the Minister of Works at the time, resulting in surplus settlements of 46.34 per cent and 150 per cent on the two properties.
Leader of the Opposition McKeeva Bush was Chairman of the Port Authority at the time the piece of property for the planned West Bay cruise tender facility was acquired. He told the Port Authority board of directors that the owners of the land had asked considerably more, but through negotiation they were willing to accept the price ultimately paid for the land.
Mr. Bush cited ‘people factors’ when justifying the higher price. He also said the particular piece of property was critical to the development of the project, an opinion shared by project manager Burns Conolly and ultimately the board of directors.
Sir Richard recommended cabinet ministers not get involved such matters.
‘Ministers should not engage personally in negotiations for the purchase of land and Government should not pay materially more than the appraised value,’ he wrote. ‘If they do, it is inevitable that individual ministers will be accused of cronyism and the process of government will be brought into disrepute.’
Mr. Bush, who agreed with all other recommendations made in Commission of Enquiry report on the basis that they would bring good governance, disagreed with the one about government always using its compulsory purchase powers.
‘The UK is big and Cayman is small,’ he said. ‘We don’t have a whole heap of land we can go out to buy.’
With regard to the ‘people factors’ involved, Mr. Bush explained that oftentimes the land being acquired has been passed down for generations.
‘Sometimes it’s the only piece of land someone has and it’s family land,’ he said. ‘Most people don’t want to move.’
Mr. Bush said ministers should be permitted to negotiate with landowners who do not want to sell their land.
‘We should be able to talk and see if we can get a better deal,’ he said, adding that the landowner for the West Bay dock property originally wanted over $1 million for the property but through negotiation came down to $650,000.
However, the average of three appraisals on the property was $251,000.
Minister of Works Arden McLean said he agrees that for good governance, land should be acquired by government through a compulsory purchase system.
Mr. McLean admitted that he sometime meets with stubborn land owners who do not wish to sell their property to government.
‘But that’s only to talk with them about why they need to sell their property,’ he said. ‘I never get involved in negotiating price; I tell them they have to talk to Lands and Survey or the Assessment Committee about that.’
Chairman of the Public Accounts Committee Osbourne Bodden conceded the situation was a difficult one in a small community like Cayman.
‘In a small community, if you just go around taking land through compulsory acquisition, you’re going to start upsetting a lot of people,’ he said. ‘Land is handed down over generations and has sentimental value. Land is also a scarce commodity.’
Mr. Bodden acknowledged that some people just don’t want to sell their land.
‘I know the practice is to work with the property owners. If they want too much, then you play the waiting game for them to come down. But that causes problems, too.’
Mr. Bodden noted that often the price people want for land is inflated precisely because it is government buying it.
‘If government wants to buy a piece of land, the price is doubled,’ he said.
In the end, Mr. Bodden agrees with the recommendations for compulsory acquisition.
‘[The recommendations] are fair comment,’ he said. ‘Good governance is good governance. The property needs to be assessed and that’s the price you need to pay for it.
‘But it’s hard in a small community.’
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