Over the past few months, Dart Real Estate has announced the acquisition of two Seven Mile Beach properties: The Royal Palms Beach Club land and The Ritz-Carlton, Grand Cayman. Both properties adjoin lands already owned by Dart Real Estate.
“These acquisitions expand Dart Real Estate’s portfolio of tourism assets and reinforce investor Kenneth Dart’s commitment to the Cayman Islands,” said Mark VanDevelde, CEO of Dart Enterprises, the parent company of Dart Real Estate. “These investments also demonstrate Mr. Dart’s confidence in the strength and resilience of the Cayman Islands economy.”
Speaking specifically about the Royal Palms land acquisition, VanDevelde said the company purchased the property because it adjoins Camana Bay Beach. The two properties together give Dart Real Estate a little more than 600 linear feet of beachfront property on which it can develop Camana Bay’s “Resort Village.”
“This acquisition significantly adds to the Camana Bay Beach presence,” said VanDevelde. “It also gives us flexibility in terms of what can be built at the Camana Bay Resort Village. By acquiring the Royal Palms land, we can now ensure there is adequate beachfront and water access for the guests who would stay there, thereby providing a quality and competitive Caribbean resort experience.”
The purchase of the Royal Palms land also gives Dart Real Estate flexibility in terms of where it builds its next resort. The original plan was to build a boutique resort on the Camana Bay Beach. When it was decided to build a larger, five-star resort to meet the growing demand for luxury hotels, Dart Real Estate determined the Camana Bay Beach was not wide enough for that project and switched its focus to the land north of Kimpton Seafire Resort + Spa. The acquisition of the Royal Palms lands now allows the Dart Group to reconsider its options for the location of a five-star resort, looking at what provides the best visitor experience and what is also best for Grand Cayman, VanDevelde said.
“The Royal Palms acquisition ultimately opened up another alternative,” said VanDevelde. “It has certainly become part of the evaluation and decision-making process for our future resort development plans. Our aim is to make the decision on where to build the five-star resort in 2018.”
The Royal Palms land purchase now becomes part of the bigger picture of Camana Bay’s future development. Some of the infrastructure for a planned Resort Village — like the Esterley Tibbetts Highway underpass and the West Bay Road underpass — has either been completed or is under construction, and will play a key role in connecting the Camana Bay Town Centre to the Seven Mile Beach corridor.
The infrastructure will also allow the hospitality product built in Camana Bay’s Resort Village to be elevated and set back from the beach.
“A resort setback will allow for spectacular views and provide a much larger beach area for various types of resort amenities like swimming pools, cabanas and beach bars,” said VanDevelde.
Ritz-Carlton Dart’s interest in The Ritz-Carlton, Grand Cayman extends back to when it acquired 280 acres of adjoining land from Michael Ryan in 2012. In 2007, Ryan — the developer of The Ritz-Carlton — purchased the bulk of that 280 acres of land from the Matalon family with the intention of creating a development known as Dragon Bay. The Matalons had already developed portions of that land, including what is now known as the North Sound Golf Club and Regatta Office Park, in the 1990s, when it was known as SafeHaven. Dart bought the office building portion of SafeHaven in October 2003 and then renamed it Regatta Office Park.
Despite Dart Real Estate’s interest in The Ritz-Carlton, it did not bid on the property when, after it was put in receivership, it was sold at auction for US$177.5 million to a subsidiary company of Five Mile Capital Partners in October, 2012.
Interest aside, Dart wasn’t actively considering the purchase of the property this year, VanDevelde said.
“The Ritz-Carlton was not an expected acquisition, but it fits in our property portfolio in Cayman in a number of ways,” he said. “It’s the only traditional luxury hotel on the island. It set the bar 12 years ago when it was opened and continues to do so in many ways. I think there’s an opportunity to layer that into our portfolio with Kimpton Seafire Resort + Spa and our thoughts on a new five-star product that would be different from The Ritz-Carlton product. That could really elevate the overall hospitality offering on the island with respect to the customer base we would be trying to attract.”
The purchase of The Ritz-Carlton also included a large tract of developable lands east of the hotel that extend all the way to the North Sound.
VanDevelde said that even though Five Mile Capital made a number of upgrades at The Ritz-Carlton, Dart intends to continue the improvements.
“Under Five Mile’s ownership, they invested tens of millions of dollars in the restaurants, common areas and rooms, as well as in some of the residences,” he said. “They carried out the necessary improvements to keep its luxury level. The hotel continues to win awards through the Caribbean and globally and it’s a highly productive product within the Marriott portfolio, and particularly within The Ritz-Carlton world, for good reason. But Five Mile didn’t complete everything they wanted to, so there are still some things there that need some attention.”
One thing in particular Dart Real Estate intends to improve at The Ritz-Carlton is parking for staff and visitors.
“Parking is a nightmare out there and we have some ideas on how to address that,” VanDevelde said, adding that Dart personnel have already been working with The Ritz-Carlton management team to implement a 10-year capital enhancement plan.