A high-dollar auction of the Cayman Islands’ most valuable hotel-condominium property has been set for the end of October.
The vendor of the hotel property is RC Cayman Holdings LLC; the company that filed a writ in March demanding the immediate payment of nearly US$234 million from Cayman Islands developer Michael Ryan, according to court records.
Mr. Ryan’s company, Cesar Properties, developed The Ritz-Carlton, Grand Cayman on Grand Cayman’s Seven Mile Beach a decade ago. The development included the hotel property and a number of high-end condominiums that were put up for sale.
According to documents filed ahead of the 31 October auction: “The sale shall be a public auction to the highest qualified bidder. The property will be sold as a single block and will not be divided and sold in lesser amounts.”
The “terms and conditions of auction” document states that the entire property includes 12 unsold condominium units owned by Cesar Properties and Condoco Properties, as well as another 14 unsold lots [out of an original 19, five of which have since been developed] that were designated for development of “deckhouses”. There is also some vacant land available for future development.
The property offered as part of the auction includes the five-star Ritz-Carlton resort, including 365 guest rooms and suites. That includes 65 rooms available through contractual agreements with third-party condominium owners on the property.
The Ritz golf course, the “Blue Tip Nine”, is part of a strata plan common property and is not being included in the auction.
“The reserve sale price shall be and is defined as the sum of US$240,000,000,” the auction documents state. “If the reserve sale price is met by a bidder and there is no further bidding, the auctioneer will acknowledge … and that bidder will become the purchaser.
“The property will be sold for all cash, at such price and on such other terms as the vendor [RC Cayman Holdings LLC] may determine in its sole and absolute discretion.”
The auction will certainly be exclusive. To qualify to attend the auction or act as a bidder on behalf of a prospective buyer, the proposed purchaser must make an advance deposit of US$12 million no later than 17 October; two weeks before the auction date. If a bidder is not successful in their attempt to purchase, the deposit will be refunded.
In February – prior to the lawsuit seeking repayment from Mr. Ryan – RC Cayman Holdings LLC sought to install its own appointed executive strata committee to govern certain areas of The Ritz-Carlton, Grand Cayman’s resort properties.
That civil action was filed on 17 February in the Grand Court by RC Cayman Holdings LLC against Cesar Properties Ltd. and Condoco Grand Cayman Resort Ltd as the first and second defendants, and against Michael Ryan, Frances Doud and Tony Haddad as third, fourth and fifth defendants. The action was amended through a filing on 28 February.
The February Grand Court action claims that pursuant to a loan agreement, RC Cayman Holdings is entitled to exercise its powers of attorney over the first and second defendants, Cesar Properties Ltd. and Condoco Grand Cayman Resort Ltd.
It seeks to restrain those defendants from interfering with the plaintiff’s “proper exercise of its powers of attorney”.
Against the remaining defendants, Mr. Ryan, Ms Doud and Mr. Haddad, the action, seeks a declaration that the executive committee appointed by RC Cayman Holdings over five different Ritz-Carlton strata plans is valid.
It also seeks a injunction against the third, fourth and fifth defendants – which it calls the Old Ex Co – “from interfering with the rights and duties of the Executive Committee.”
Mr. Ryan issued as statement dated 29 February, stating the writ had been filed “by one of the lenders to the project and it is in relation to the lender’s rights to participate in the management of various strata corporations”.
Approximations contained in the auction documents stated that, by next month, loans owed on the Ritz property totalled $231 million in principal, $10.9 million in interest and $5 million in “additional protective funding”.
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Well I guess the other shoe just dropped!
I feel sorry for owners not smart enough to sell when times were good.
Hopefully the new owners won’t convert the property to something sub-standard for the Ritz.
Ominous sign for things to come!
Did the Compass contact the Premier or Cabinet Office to find out if the new owners will have to pay stamp duty on the transfer?
That could be quite a windfall for the government. It’s probably too much to ask if a certain real estate company, with previous exclusive rights to sales, or any other real estate company would be entitled to commissions on this auction.
One must understand that any excess proceeds arising from all realizations less payments made to the receivers go back to the companies in receivership at which time the receivers are discharged from their duties. Not a good idea may I suggest.
If there is value for dollar at 240 million, I expect Dart Enterprises would purchase the Ritz. Fits well into their puzzle.
I liked the Old Holiday Inn Property better….at least it felt like a Island property….the Ritz is just a big hotel that sticks out like a sore thumb…looks like the extension of the builders ego……