Higher fees for developers approved

Opposition votes against proposal

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Major changes to the way Cayman
handles development projects were approved by a majority of lawmakers late
Monday.

Proposed changes to the Development
and Planning Law loosen certain rules for developers and attempt to speed up
the planning process for everyone involved. In exchange, the bill calls for
significant fee increases, particularly for developers working on new projects
in higher-density, upscale areas such as Seven Mile Beach, South Sound and
central George Town.

Among the many changes are sharply
increased daily fees for property owners who refuse to clean up their land or
deal with abandoned buildings.

Fines of $5,000 per day on derelict
properties will be imposed for scofflaws under the new bill. The fine rises to
$25,000 in tourism centres where owners have ignored Planning Department orders
to clean up their property.

Opposition members who were present
and the Legislative Assembly’s lone independent member voted against the bill,
although most stated they had few problems with the Development and Planning
(Amendment) Bill, 2010, as it pertained to the development-related changes
themselves.

The opposition “no” vote mainly
came because members believe the new law would reduce the amount of information
available to the public about planning proposals and would give the government
the ability – in certain situations – to ignore the law.

Opposition MLA Arden McLean
compared the last issue to something that “would be seen in Russia”.

“These are some serious changes in
this law,” Opposition MLA Arden McLean said. “(Development) affects every
living soul in this country.”

Concern centred on sections of the
bill which would let future changes to the planning regulations be approved by
Cabinet members alone, rather than the entire Legislative Assembly. 

Also added to the bill was a
section that allows the Cayman Islands governor to waive certain requirements
under the planning law if “the public interest so requires”. 

“Whatever the executive decides is
well said, well done and that’s it,” Opposition Leader Kurt Tibbetts said.
“That is far-reaching. I do not believe that the democratic process is served
well.”

The section of the bill Mr.
Tibbetts addressed was amended in committee to allow the governor to waive only
section 13 of the Development and Planning Law. However, that section deals
with most of the provisions for development contained in Cayman Islands law.

Premier McKeeva Bush said there
were a number of reasons to give government the ability to waive that section
of the law.

“There is no good reasons why…it
(government) should be prevented from undertaking such a development, like a
police station or a fire station,” Mr. Bush said. “There are projects of
national importance which government cannot afford to have bogged down by
objections.”

New fees

The other major problem for the
LA’s opposition and independent members was the proposed increase in planning
fees charged to support local public infrastructure and affordable housing
initiatives.

Independent MLA Ezzard Miller said
the new fees – as initially proposed by government – would tack some $130,000
onto the cost of building a new 10-unit apartment building in North Side.

“That’s a lot of money,” Mr. Miller
said. “I think that it would deter some small, ten-unit developments.” 

The fees were later changed by
amendment during a committee meeting of the Legislative Assembly. They differ
depending on the development area identified by the government.

For area ‘A’ – the densest and
usually highest-priced sections of Grand Cayman – infrastructure and affordable
housing fees total $2.50 per square foot for an industrial building, $4.50 per
square foot for commercial buildings and hotel buildings, $3.50 per square foot
for institutional buildings and $5 per square foot for any size house.

In development area ‘B’ –
industrial buildings will be charged $1.50 per square foot for infrastructure
and affordable housing fees, commercial buildings, hotels, apartments and
institutional buildings will be charged $2.50 per square foot, and houses are
charged depending on their size.

For development of a 3,001-4,000
square foot house, a fee of $2.50 per square foot would be paid. For a house
between 4,001-5,000 square feet a fee of $3 per square foot would be owed; and
for a home over 5,000 square feet, a $3.50 per square foot is now charged.

In area ‘C’ – the lowest density
development areas – a $0.50 per square foot charge is levied for any
development.

In addition to the infrastructure and
affordable housing fees, a one-time $3,000 per hotel room fee will be charged
everywhere in Grand Cayman on issue of a certificate of occupancy for the hotel
by the Planning Department. Apartments with 11 units or more would pay a
$20,000 one-time fee per unit after receiving their certificate.

Mr. Bush said the increased
planning fees were going to hit some businesses. But he said the government
tried to balance the fees and avoid affecting the smaller, local developers and
that he believed the “good” larger companies would still wish to build in
Cayman.

“You do that by creating an
environment where (businesses) can grow,” he said. “It is long past time when
we just give and give and we don’t get anything out of it.”

Opposition MLA Alden McLaughlin said
he feared the new infrastructure and affordable housing fees – on top of
planning application fees that were raised last month – could be “the
proverbial straw that breaks the camel’s back”.

“We can’t take anymore,” Mr.
McLaughlin said, noting that government had increased work permit fees,
business fees, customs duty, including petrol import duty all within the past
year. “That is the way that the people who are affected by these feel.

“I ask the government not to make
the same mistake for the umpteenth time.”

Mr. Bush said many of those fee
increases were implemented because of the “mess he left” – referring to the
previous government of which Mr. McLaughlin was a part – that exited office
with amid an $81 million operating deficit in the government’s budget.

“The money they wasted is the root
cause of the bad economic conditions being felt by the people,” Mr. Bush said.

He also noted that any issue
dealing with property usage in Grand Cayman is always emotive and difficult for
government to deal with. The premier said it was precisely because nothing had
been done with planning and development matters by successive governments that
“people were suffering”.

Making things easier

The proposals contained in the new
Development and Planning Law and regulations were drawn up by a public-private
sector committee led by local architect Burns Connolly. They were under review
for about a year.

Mr. Bush said many of the issues
addressed in the proposed amendments to the law have troubled the Cayman
Islands for a long time. He said government sought to address delays and
difficulties in the process that led some developers to simply “give up” on
projects in the past.

Changes include a reduction in
distance requirements for development of certain commercial projects.
Currently, builders have to “poll” everyone within 1,500 feet of a development
prior to obtaining planning approval. Formal objections to the development can
slow or even halt projects.

The polling distance is shortened
to 1,000 feet under the new bill.

The bill extends the time on
planning permits from one year to five years to allow enough time for building
inspections and other requirements. Right now, Mr. Bush said, some permits are
expiring before all the regulatory work for a property is completed, forcing
planning applicants to re-apply.

The bill also requires appeals of
planning board decisions to be heard within six months and allows applicants to
recover attorneys’ fees from parties who file appeals that are deemed
“frivolous or vexatious”.

Planning regulations have been
changed to include ‘planned area developments’. These are 40-acre or larger
properties of ‘mixed use’ – typically meaning both residential and commercial.

Mr. Bush said some effort has been
made in the amended law to minimise the effects of these larger developments on
the surrounding community.

Also, planning permission would be
formally required for interior development of a building that changes the use
of the property or which has some impact on the surrounding environment. Mr.
Bush said this has been informally enforced already, but that government wants
to cement it within the law.

New Development and Planning Law

•$5,000-$25,000 per day fines for
people who refuse to clean up delinquent properties/take care of abandoned
buildings

•Government can ignore Section 13
of the law for particular projects deemed to be “in the public’s interest”

•Increased fees for infrastructure
and affordable housing charged to new developments in areas “A” and “B” on
Grand Cayman

•New,one-time fees of $3,000 per
hotel room and $20,000 per apartment for developments on Grand Cayman. $20,000
fee for apartments charged only to complexes with 11 or more units

•Infrastructure and housing fees
unchanged in “C” development areas

•Reduction in ‘polling’ distance
for commercial developments from 1,500 feet to 1,000 feet

•Extension of time limits on
planning permits from one year to five years

•Planning appeals must be heard
within six months

•New rules and allowances for
‘planned area developments’, mixed-use developments which are 40 acres or more

•Interior development that changes
a building’s use now requires formal planning permission

TOPfeesSTORY

The face of Grand Cayman could drastically change under changes to the Development and Planning Law, which lawmakers OK’d Monday night.
Photo: Brent Fuller
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