Orchard EcoVillage project halts over lack of funding

Construction has officially ground to a halt at the site of Orchard EcoVillage – a planned affordable and sustainable development in Bodden Town.

The developer’s lawyer said work has stopped because of increased labour and construction costs, and low availability of materials, stemming from the COVID-19 pandemic.

In the over four years since planning permission was granted for the unique project, progress has been limited.

The 3.5-acre plot of land has been cleared and filled, a road built, and some of the foundations laid.

Off-plan buyers, who have long been awaiting an update, have been assured they will receive their deposits back this year, “provided sufficient refinancing can be obtained”.

Aura Wellness Development is now seeking permission to divide a section of the construction parcel into individual lots, which will then be sold to recoup spent funds.

Architect drawings for the new subdivision project are available for public viewing on the Department of Planning website until 30 Jan.

A vision of sustainability

Outline planning permission for a 48-apartment residential complex on land leading from Pasture Drive near Lemuel Circle was granted in June 2019.

In a letter to the Central Planning Authority, the developer described what was then called ‘Aura Wellness EcoVillage’, as providing “eco-friendly housing at an affordable price”.

They said the $14 million development would be a LEED-certified neighbourhood – the first of its kind in the Cayman Islands and in the Caribbean.

This meant that it had met specific criteria and standards for sustainability, energy efficiency, and environmental performance.

“We expect that when this eco-village is completed successfully, Cayman will be regarded as a world leader in the building of climate-resilient communities,” the developer wrote.

Their aim, they said, was to build high-quality accommodation in the eastern districts that would be affordable for low- and middle-income residents.

The six three-storey apartment buildings would contain one- to three-bedroom units that would each be sold for below $400,000, the letter explained.

There were no public objections to the project; however, the Department of Environment expressed concerns about construction on a “functioning and thriving” mangrove wetland.

The application went back before the planning board on 25 Sept. 2019, when it was adjourned for the developer to submit a masterplan on potential future building.

It was then granted planning permission on 9 Oct. 2019.

‘Helpless and frustrated’

In September 2021, project spokesperson Tim Langfitt told the Compass that phase one of the newly named ‘Orchard EcoVillage’ had sold out in 10 weeks.

He said those investing pre-build were mainly first-time buyers, retirees and young families.

Over the past year, several buyers have contacted the Compass expressing concerns about their investment and the progress of the build.

They asked not to be named for fear of breaching the terms of their contracts or of permanently losing their deposits.

One said, “We have been concerned probably for two years, because no construction has been started,” and that they were left feeling “totally helpless and frustrated”.

“All we want is our money back so we can move on and purchase something elsewhere.”

Another buyer said, “We bought a unit there over three years ago… It shut down with COVID-19, just a few foundations built, and still has not reopened.”

They said they were shocked that there is no legal requirement for deposits to be put into a trust account.

A third buyer said they were captivated with the idea of a big green community with lots of spaces and an eco-friendly neighbourhood, but their dream had turned into a nightmare.

“Myself and dozens of others… were hoodwinked into giving away our hard-earned savings for this ‘exclusive project’,” they said.

The buyer said their home was meant to be finished by the end of December 2023 but no progress had been made.

They added: “The deposits were supposed to be held in a trust, however, development hasn’t started three years in, the money is nowhere to be seen.”

‘No longer achievable’

On Thursday, 11 Jan., following inquiries, attorney Sally Bowler of McGrath Tonner sent an email to the Compass on the status of the project on behalf of the developer.

The law firm has been acting for and assisting Aura Wellness Development with its plans to refinance Orchard EcoVillage.

Bowler’s email said a common difficulty for developers since the COVID-19 pandemic has been finishing developments by the anticipated completion dates and within budget.

“Aura Wellness has been no different,” she wrote. “The Aura Wellness project was designed and budgeted for in a pre-COVID 19 economic climate.”

The attorney added that, as it was initially planned and sold as affordable housing, it was particularly vulnerable to the sharp rate of inflation.

“When costs did inflate sharply, completion on time was no longer achievable,” she wrote.

The developer was unable to complete in line with its original budget due to a shortage in construction materials, as well as an increase in materials and labour costs, Bowler stated.

Aura Wellness Development was also struck by “significant increases” in the cost of construction financing which, together with deposits, paid for those expenses, Bowler added.

She explained the developer has committed to refunding every purchaser in full, and, “provided sufficient refinancing can be obtained, this will be achieved”.

On 11 Dec. 2023, the developer applied to subdivide part of the project site into smaller lots for sale pre-construction to raise financing to repay buyers.

The plan is to split it into 16 sections consisting of 13 residential lots of 0.2 to 0.26 acres each, one lot for public purpose, one road lot and one remainder lot.

The company has kept purchasers updated on the progress of that planning application, Bowler said.

She added that, in the meantime, certain eligible purchasers have been refunded in full and the others have received partial refunds, with all buyers being offered full refunds in 2024.