Every time the subject of giving
incentives to developers comes up, there is public outcry about the
possibility. People argue that Cayman does not need to give incentives because
this is where developers want to be.
Although that might have been true
at one time, it isn’t anymore. For many reasons, Cayman is no longer the
darling of Caribbean developers.
Certainly, the global financial
crisis is partially to blame. But there are a number of other factors probably
affecting interest in the Cayman Islands as a place for development: bad
international press, rising crime, increasing import duties, higher labour
costs, strict foreign labour regulations, difficult government bureaucracy and
a lack of government development incentives all probably play a role. Add to
that a populace that is often vocally hostile toward development and it’s not
surprising that resort developers are going elsewhere in the region.
The cancelled projects are adding
up. Plans for the Mandarin Oriental hotel; the Residences at Beach Bay; the
Montclaire condominiums; and Ivory Sands at Cayman Kai have all been scrapped.
Other major projects are now on hold while developers look for financing or
pre-sales. In addition, talk about Dr. Devi Shetty’s hospital has now gone quiet.
Development has been a key economic
driver in the Cayman Islands for decades and it has all but stopped now. Going
forward, the government will likely have to offer developers incentives to
build major projects here or face a reality of an extended recession.