Mandarin still possible

Contrary to the beliefs of some
Cayman Islands realtors, two major resort projects on Grand
Cayman are still very much alive.

The Mandarin Oriental Resort
project, which has planning approval for 114 luxury guest rooms on oceanfront
property along the Queen’s Highway in East End, was originally scheduled for completion
in 2007. However, Hurricane Ivan in September 2004 and then the financial crisis
that began in 2007 delayed the project.

Jeffrey Cotter, a US-based director
of Barefoot Resorts Ltd,, said he was surprised to read that Cayman’s realtors
said the project had been scrapped.

“We are very active in trying to
source investors for the project,” he said.

Part of the confusion on the status
of the project was probably caused by the property being advertised for sale by
HSBC earlier this year.

“Banks don’t want the land sitting idle,” Mr. Cotter said.

However, just because the property
is being offered for sale doesn’t mean the project is dead.

“We’re pursuing all channels
available to us,” he said. “One channel which we don’t particularly care for is
the outright sale of the property,” he said. “But our first preference is to
proceed with the development of the project.”

Although he admits that it would be
a reasonable assumption for someone to think the Mandarin project was dead
because the property was for sale, Mr. Cotter said he would have still expected
a realtor to speak to the developers before making public statements about it.

Mr. Cotter said the investment
climate in the United States
now is not really any better than it was a year ago, and in certain ways it’s
actually worse.  As a result, the developer’s
efforts to attract equity investors have moved away from the traditional
hemispheric sources toward Asian and Mideast
investors. Barefoot Resorts Ltd. made the strategic decision to list the
property with Cayman Islands Sotheby’s International Realty to engage an
international brand in the marketing.

“It was one of the ways of getting
the message out across the globe, but the only way to do that was to get the
property listed.”

Mr. Cotter said the Mandarin
project was by no means the only one that was having difficulty finding equity
investments.

“All developers are experiencing
the same thing,” he said, adding that securing investors has become a very
painful process. “Everyone is jittery. Our mission is not to be a casualty of
the process.”

Ironically, the story came out
saying the project had been scrapped at a time when there has been a lot of renewed
interest in the project.

“We have six to eight [investment]
groups that are in some stage of due diligence with this project,” he said. “If
we get the investors, the process will be very short to get the building
started.”

Mr. Cotter noted that the Mandarin
Oriental brand was still very much on board with the project.

“The main reason is the Mandarin
brand and Grand Cayman
Island… strategically
its the right place to be.”

Cayman Islands Sotheby’s owner
Sheena Conolly confirmed that interest in the property – and the project – was
high.

“It’s one of our most active
properties in the world,” she said. “Several people have come to look at the
property, with their feet in the sand,” she said.

Part of the reason for the great
interest is the size of the property. 
When two parcels are combined, they form over 19 acres of land on 1,950
feet of beach front.

“It’s a magnificent site, the likes
of which haven’t come on the market in a long time,” she said.

Mrs. Conolly said two oceanfront
properties could be purchased outright for US$21.75, and the purchasers could
still go ahead with the Mandarin project.

“It’s got planning permission, it’s
beautiful project, and the Mandarin is on board.”

 

Spanish Bay Reef Resort

Another project that is still very
much alive involves Spanish Bay Reef Resort.

One of the owner-developers of the
property, Andreas Ugland, remains very bullish on the Cayman Islands, having
recently opened the Cayman Motor Museum
in the Northwest Point area of West
Bay.  Spanish Bay Reef Resort was originally built
in 1972 on 1,900 feet of oceanfront property in the Barkers area of West Bay.

Mr. Ugland said the project had in
no way been abandoned, just delayed.

“We’re just biding our time,
waiting for a market that is looking a lot better,” he said.

The Spanish Bay Reef Resort project
would be done in two phases, with the first phase being an extensive renovation
– basically a rebuild according to Mr. Ugland – of the existing resort to create
50 hotel rooms.

“We’d like to think we would do
another phase with another 50 rooms,” he said.

The resort would still cater to
scuba diving, partially because of its long history as a dive resort and
partially because of its proximity to some of the premier shore diving on Grand Cayman.

With a lot of property, the
building will be spread out with small pathways for golf carts and “no high
rises”, Mr. Ugland said, adding that there are plans for two pools, a pool bar
and a restaurant.

“It will be secluded and private
with a lot of emphasis on landscaping it properly,” he said. “It will have a
feeling of being quite exotic.

“We’re trying to recreate some of
the feeling of the 70s and 80s,” he said. “It feels so calm out there… like
the old Cayman.”

Mr. Ugland said there might be a
name brand management company involved, but not necessarily.

“We are looking at finding a
management company, but at the same time, we’re prepared to take it on our own
and manage it locally,” he said.

A model room has recently been
completed at the resort. However, Mr. Ugland said the hotel won’t be sold as an
ownership property.  He said the plans
were to start development within 18 months.

“We fully intend to go ahead,” he
said, noting that the investors involved right now were all “more or less
local”.

Mr. Ugland said there was a great
need for more hotel rooms on Grand Cayman,
with some 600 rooms lost since Hurricane Ivan hit in September 2004.

“It’s not all doom and gloom,” he
said. “There’s no doubt an opportunity in the Cayman
Islands to open more hotel rooms.”

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