The rather contentious takeover of The Ritz-Carlton, Grand Cayman, by a US-based firm produced its fair share of headlines in the past year. However, the considerable amount of activity at other hotels and resorts in 2012 should not be overlooked.
In addition to the goings-on at the Ritz, the Dart Group is proceeding with its plans for the former Courtyard by Marriott; contractors have been busy at the former Hyatt; the Holiday Inn is returning to Cayman; the Grand Cayman Marriott Beach escaped a seemingly imminent closure; Comfort Suites and Westin Grand Cayman have undergone renovations; and Morritt Properties has announced major additions to its Colliers resort.
At a 31 October auction, US private equity firm Five Mile Capital Partners (via its Cayman affiliate RC Cayman Holdings) acquired the Ritz and associated properties for the auction’s reserve price of US$177.5 million.
RC Cayman was the secured creditor of some US$250 million for companies formerly controlled by Ritz developer Michael Ryan until they were placed in receivership March 2012.
Also present at the auction was one other independent bidder, a Caymanian entity whose name has not been disclosed to the public.
Although the resort has now been sold, legal struggles continue that involve RC Cayman, Mr. Ryan and a network of companies he formerly controlled. The Cayman Islands Grand Court is considering claims and counterclaims involving cash and assets, with the case pitting the receivership companies against Mr. Ryan and companies he still controls.
Apart from Mr. Ryan and his companies, Five Mile also clashed with then-Premier McKeeva Bush on a couple of points related to the purchase of the Ritz, particularly its US$177.5 million valuation and whether the company should pay some $6 million in deferred duty payments the government has alleged it was owed by the receivership companies.
Mr. Bush said he doesn’t believe the fair value of the hotel could have dropped from US$468 million (according to a valuation done in 2007) to US$177.5 million in 2012. Five Mile says the lower more recent figure was calculated by a local firm and OK’d in writing by the government’s Valuation and Estates Office.
Regarding the $6 million in deferred duty, the former premier and the company disagree over who is liable for the debt, and how earnest each side was in its negotiations over the outstanding duty.
Putting those issues to the side, The Ritz-Carlton management company maintains control over the resort’s operations, and the new owners say they plan on investing in improvements to the property over the next several years, possibly including new hard court tennis courts, building out the Deckhouses and creating an 18-hole golf course. Representatives from the US private equity firm tossed out figures in the range of US$7 million to US$10 million in the near term, and US$20 million to US$30 million during the next few years.
On 13 December, Blue by Eric Ripert reopened after being closed late August. The downtime was spent renovating the interior of the restaurant, as well as adding new dishes to the menu.
Although the entire ForCayman Investment Alliance agreement has not yet been finalised, Dart is forging ahead with the extension of the Esterley Tibbetts Highway and the redevelopment of the former Courtyard by Marriott.
Last fall, workers carried out an interior demolition of the hotel building, which was originally branded as a Holiday Inn.
More recently, Dart has cleared and filled land to the east of the hotel, in order to prepare the site to become a car park, entrance and gardens.
In mid-December, Dart applied for permission from the Central Planning Authority for a “construction compound” at the hotel site, including a plant nursery and 10 temporary contractor trailers and construction offices. According to the agenda of the meeting, the planning department “has met with the developer and is confident an application will soon be submitted for the hotel renovation”.
At the same meeting, the planning authority was set to discuss a proposal by Dart to create a 100-stall parking lot on 11.5 acres of vacant land south of the hotel, across West Bay Road from Public Beach.
In November, Mr. Bush linked Dart’s property to US-based boutique hotel brand Kimpton Hotels & Restaurants.
At the same event, Mr. Bush said the old Hyatt property (on the Esterley Tibbetts Highway) is set to become a Hilton. Later a representative of the old Hyatt owners said no contracts have been signed.
This fall, workers began a partial demolition of the former Hyatt property. While owners Embassy Investments have refrained from speaking to the press about details of the project, sources say the owners intend to redevelop the site into a new business hotel.
Sources in the property industry have said the owners intend to redevelop the property into a four-star, 168-room business hotel and spa, with conference facilities and making use of the existing buildings and perhaps constructing two new buildings, and maybe investing more in the golf course.
Holiday Inn returns
In early November, local company The Grand Caymanian Ltd. announced its plans to convert The Grand Caymanian Resort (formerly Ramada) into Holiday Inn Resort Grand Cayman.
The resort, which fronts the North Sound, will undergo a variety of modifications in order to meet standards set by the franchise’s parent company Intercontinental Hotels Group and the Holiday Inn Resort Collection.
The enhancements include free wireless Internet access in all rooms, public areas and meeting spaces; expanded food and beverage options; children’s activity programmes; water features on the main pool deck; upgraded bath amenities; upgraded meeting space; and Holiday Inn Resort’s bedding packages.
The Grand Caymanian Ltd. purchased the resort in 2010. US resort management company Crestline Hotels & Resorts will be the hotel operator.
When it opened on Seven Mile Beach in August 1972, the Holiday Inn was the first internationally branded hotel in the Cayman Islands. The original Holiday Inn was demolished in 1998 to make way for The Ritz-Carlton, Grand Cayman. A new Holiday Inn was built and opened in 2000. It later became the Courtyard by Marriott, which was ruined by Hurricane Paloma in 2008 and is being redeveloped by Dart.
Last November, it was announced that a group of investors had bought a piece of the Grand Cayman Marriott Beach Resort. Local businessmen Gene Thompson and Harry Chandi helped facilitate the recapitalisation of the resort by Private Equity Group, a private equity firm based in Fort Myers, Florida.
Mr. Chandi’s involvement in the project may have helped him gain Caymanian status via grant by Cabinet this November. During the Legislative Assembly debate over Cabinet’s proposal to grant Mr. Chandi status, Mr. Bush named the Marriott project among Mr. Chandi’s achievements, saying the hotel was bound to close in a matter of weeks before the Indian-born businessman stepped in to help.
The capital injection was to help fund renovations beginning this summer.
This fall, Comfort Suites Seven Mile Beach finished a yearlong renovation project that cost US$2.2 million. Improvements included remodelling all of the hotel’s rooms, improving the breakfast room, and adding a gym and private business centre.
The Westin Grand Cayman Seven Mile Beach Resort and Spa is set to wrap up its own $8 million renovation project in January, and now has a new name, formerly being called the Westin Casuarina. The renovation project includes improvements to all of the guest rooms, suites, public spaces, meeting spaces, the fitness centre and swimming pool.
In early December, the New Orleans Times-Picayune broke the news that Maison Dupuy Hotel chef Michael Farrell was heading to the Westin Grand Cayman to launch a pair of new restaurants, one upscale and one casual.
In April, David Morritt welcomed guests and officials to the ground-breaking ceremony for the first phase of a planned $58 million investment into Morritt Properties’ East End development. The first phase of the project is “The Londoner”, a five-storey seaside apartment building with 35 units.
Over five to 10 years, Mr. Morritt also plans to build another seven buildings and replace the main reception building with a 7-storey building.