Dart Realty (Cayman) Ltd. announced Wednesday that it had purchased the 232-room Courtyard Marriott hotel from developer Stan Thomas and his companies.
The hotel closed after sustaining damage from Hurricane Paloma in November 2008 and hasn’t reopened.
In addition to the hotel, the Dart Group acquired other properties in that area that were owned by Mr. Thomas, including the Cayman Islands Yacht Club and about 1,500 feet of Seven Mile Beach property.
In the mid-2000s, Mr. Thomas paid some US$100 million to buy a patchwork of properties, which comprise about 300 acres. It was reported that he would develop a five-star resort that included an 18-hole golf course, a marina and residences. The economic downturn that began in late 2007 and the ensuing credit crunch crushed the plans for development. In late 2009, the Atlanta Journal Constitution reported that Mr. Thomas and his company were experiencing severe economic difficulties. Earlier this month, the newspaper further reported that Mr. Thomas faced being jailed by 20 January if he didn’t pay US$6.1 million and other considerations as part of a US$13.5 million judgment issued against him in October 2009.
Dart Realty Managing Director Jim Lammers said there was an element of “land stewardship” that was discussed by the Dart Group when it considered the purchase, and the possible negative implications of having the properties get tied up in litigation for an extended period of time.
In addition, Mr. Lammers said the properties were purchased “because we believe they hold great potential for development over the long term”.
However, Mr. Lammers stressed that the Dart Group would take time to decide how to develop the property, undertaking a thorough analysis first.
“We’ll use patience and a multi-disciplinary approach to make sure we do it right,” he said.
“We’re lucky to have some patient capital and real long-term view on Cayman.”
Adding the newly purchased properties to adjacent landholdings already held by the Dart Group – including the Salt Creek development and the Camana Bay Nursery – amounts to more than 500 acres.
Dart Realty’s CEO Mark VanDevelde said the acquisition of the Thomas properties brings great opportunity as well as great responsibility to develop the lands with thought and care in a way that creates lasting value.
Although the Dart Group will take time formulating a development plan, Mr. VanDevelde said some remedial work would start almost immediately to improve the Yacht Club marina, which has been in a dilapidated condition since it sustained significant damage during Hurricane Ivan in September 2004.
“There are a lot of immediate steps we can take to improve it without significant capital outlay,” he said.
As for the hotel, Mr. Lammers said the general thought was that the Hurricane Paloma damage could be repaired and then the hotel reopened, although he couldn’t give any timetable for reopening.
“We’re pretty comfortable it doesn’t have to be razed,” he said
The acquisition of the adjacent properties also brings into play the possibility of a golf course, something the Dart Group has had on its wish list, but was never a serious consideration for the Camana Bay site because it felt there wasn’t enough land.
Although Mr. VanDevelde said there were no immediate plans to build a golf course on the newly acquired properties, he admitted that having a large tract of land in the Seven Mile Beach corridor in close proximity of Camana Bay and many tourist accommodations made it a possibility.
“It opens up the opportunity for us, at least in land availability, to look at golf,” he said.
Mr. Lammers said a convention centre was something else the Dart Group had talked about wanting to develop in the past and something that could possibly arise in the development of the new lands, but he stressed again that there was no development plan as of yet.
Premier McKeeva Bush praised the Dart Group’s acquisition of the properties.
“This is very, very positive,” he said.
“Government is going to work with them to bring that hotel back on line as soon as possible.”