Government gazettes Dragon Bay leasehold sale to Dart

Deal nears finalization

The Dragon Bay master plan.
The Dragon Bay master plan.

The governor, on the recommendation of Cabinet, has proposed to vest 280 acres of Crown property, currently under a long-term lease, that was once part of the project plans for SafeHaven and Dragon Bay to an affiliate of Dart Realty.

In consideration of the conversion to freehold title, Dragon Bay Ltd., the Dart Realty affiliate, will pay the government US$14,574,000, as stated in the Extraordinary Gazette dated Jan. 20, 2016.

The land, which was subject to a 99-year-lease that has 75 years to run, has been subject to controversy for many years. It includes the North Sound Golf Course, originally called the Links at SafeHaven and developed in the 1990s by Matalon family. Although the Matalons completed what is still to this day the only 18-hole championship golf course on Grand Cayman, and they also completed the buildings that now make up the Regatta Office Park, their development of housing at SafeHaven never panned out.

In 2007, The Ritz-Carlton, Grand Cayman developer Mike Ryan announced he had acquired the golf course and adjoining lands. Two years later, he announced plans for Dragon Bay, a 360-acre development that incorporated some of the property that was part of The Ritz-Carlton lands. That project, announced during the global financial crisis, failed to materialize and then, shortly after The Ritz-Carlton and its lands were put into receivership in March 2012, Mr. Ryan announced that Dart had invested in the North Sound Golf Course. It was later discovered that the Dart Group had bought the entire property.

After the PPM government retook the government in May 2013, Dart Realty pushed for conversion of leasehold to freehold title on the property. In January, 2015, in his state-of-the-nation address at the Fidelity Cayman Economic Outlook conference, Premier Alden McLaughlin announced that as part of the third amendment to the National Roads Authority agreement – which, in its entirety, included closing a section of West Bay Road, the extension of the Esterley Tibbetts Highway and the expansion of Public Beach on West Bay Road – that a provision was included to allow Dart to purchase the freehold title to the SafeHaven property.

In an interview in 2011, Mr. McLaughlin conceded that it was unlikely the government would ever get developed Crown land held on long-term leases back, but said they could be counted on for revenue injections every 40 or 50 years as the lessees desired to extend the term back to 99 years.

Negotiation of a price for the freehold transfer of the land then began, with both the government and Dart Realty having their own appraisals done on the value of converting the land from leasehold to freehold, with the two being values at $12 million and $16 million respectively. Mr. McLaughlin announced in November last that a deal had been reached and that Dart Realty had agreed to develop the property. He also said that the matter would have to be finalized in accordance with the requirements of the Governor (Vesting of Lands) Law.

Now that the details of the vesting have been gazetted, “a report with documents specified by law, must be tabled in the Legislative Assembly by the Cabinet minister responsible for lands, which is currently Kurt Tibbetts, for 21 days. During that time, a motion by a legislator can be made to reject the report, in which case the motion would have to be voted on by the Legislative Assembly before the vesting can be finalized.