Topic of Caneel Bay Generates Contention at St. John Town Hall

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Attendees of Wednesday’s town hall meeting in Cruz Bay.

Wednesday’s town hall meeting on St. John did little to move the shuttered Caneel Bay Resort closer to achieving an opening date and caused tempers to flare as attendees reiterated long-standing grievances regarding the hotel.

The iconic St. John resort has been closed since Hurricane Irma hit in September 2017.

Delegate to Congress Stacey Plaskett called the meeting to give the resort’s owner a chance to speak to the public and to listen to community concerns.

Delegate Stacey Plaskett (File photo)
Delegate Stacey Plaskett (File photo)

Plaskett began the meeting by stating that she hoped her bill, HR 4731, which grants the resort’s owners a 60-year lease to re-develop the property, will be approved by Congress before the year is over. The bill passed the House Committee on Natural Resources in March.

Addressing a packed room at the Legislature Annex, Gary Engle, CEO and chairman of Stoneleigh Capital, the parent company of CBI Acquisitions which operates Caneel Bay Resort, restated his intention to rebuild the resort as soon as the bill is passed by Congress.  He pledged to maintain the property at roughly its current size —166 units — with some additional employee housing on site.

Although there are some people on St. John who don’t want to see Caneel Bay rebuilt at all, many feel that the upscale resort is critical to the economy of the island.

Proponents of HR 4731 point to the resort’s 400 jobs and wealthy guests who spend money at local restaurants and retail establishments. The average room rate for Caneel Bay during high season was more than $700 a night.

Caneel Bay Resort photographed in April.
Caneel Bay Resort photographed in April.

Some opponents want to see the land revert to its natural state as envisioned by Laurance Rockefeller when he deeded the property to the Virgin Islands National Park in 1983. The property is technically owned by the park, but the resort was allowed to maintain control of the property for 40 years through a Retained Use Estate, or RUE, which expires in 2023.

The RUE agreement does allow for an extension, but Engle says 40 years is not enough time to recoup the $100 million investment CBIA must make to get the resort up and running. He lobbied Plaskett to bypass the process involving negotiations with the National Park Service.

“You have a lease for a goldmine,” said St. John resident Elaine Estern, who asked why Engle was not content with a bill passed in 2010 that would give CBIA a 40-year extension of the RUE but required Engle to negotiate with the National Park Service. The original RUE and the 2010 bill do not require CBIA to pay to lease the property.

Caneel Bay Resort principle Gary Engle (left) and marketing director Patrick Kidd. (David Knight Jr. photo)
Caneel Bay Resort principle Gary Engle (left) and marketing director Patrick Kidd.

Engle said he tried to negotiate with the Park Service. He said that he waited two years for the Park Service to appoint a consultant who had no authority to make decisions. “We had one meeting. It went nowhere. There never was a lease negotiated. I won’t go through that again,” he said.

Plaskett was attacked by some residents for not seeking input from the community before her bill, which contains few restrictions, was submitted. “We don’t feel that we had a say,” said Brummell Germain. “I’m disappointed in the stance you took; you did not consult with us, the people who put you in office.”

Plaskett has said that her intention in proposing the bill soon after the storm was to get the resort back in operation as soon as possible. If CBIA’s negotiations with the Park Service failed, the process of rebuilding could easily take ten years. The resort would revert to the Park Service, which would need a year to craft and advertise a request for bids and another year to analyze the bids and select a new developer. The developer could then take three years to build the resort.

Hotel owner Brion Morrisette called the ten-year scenario “preposterous.”  “You’ve been threatening the people of St. John,” he said to Plaskett.  “You’re blackmailing us by saying, ‘Unless you support [CBIA,] you won’t get a hotel!’ You don’t even know how much insurance they’re getting.”

Morrisette then turned to Engle and said, “You have EDC benefits? What are your profit margins?  You’re operating behind a smokescreen.”

Engle responded that he was personally offended by Morrisette’s words, adding, “I wouldn’t tell you that information just to spite you.”

Morrisette went on to chastise Park Service officials for not showing enough leadership and also for allowing Caneel Bay to close its gates and block access to VINP beaches and trails.

“[Engle] is asking for 80 years of an asset that is owned by we, the people of St. John,” said David DiGiacomo, who presented Plaskett and Engle with a list of 36 things CBIA should commit to doing to ensure community support.

“He could commit to build in an environmentally sound way. He will not commit to that. He could say he won’t allow the use of [chemicals found in sunscreens that are harmful to coral reefs] on the property. He won’t commit to that.”

DiGiacomo pointed out that under an extension to the RUE signed in 1986, CBIA could expand to as many as 370 units, including 150 units on Honeymoon Bay. In spite of Engle’s stated intention not to expand, there’s nothing in the language of HR 4731 to limit further development.

Under HR 4731, CBIA could avoid paying any rent at all by deducting rebuilding costs although they may have already been reimbursed by insurance payouts, DiGiacomo said.

Stedman Hodge Jr. asked Engle, “What benefits are you going to offer to Caneel employees?” Engle said that the benefits would be “consistent with benefits we’ve had in the past.

Plaskett said that additional benefits could be stipulated in CBIA’s agreement with the V.I. Economic Development Commission.

Lorelei Monsanto said the 60-year lease outlined in HR 4731 is too long. She said the high paying jobs at Caneel would be filled by people from the States, leaving the “dregs jobs”–positions as cooks, maids, and maintenance workers — to be filled by local workers.

Theresa Germain, a former employee at Caneel Bay, said “Mr. Engle has taken the resort downhill.” She said under CBIA’s management, many full-time positions were converted to part-time positions, and some departments were eliminated and replaced by service companies outside of the organization.

Pam Gaffin said that CBIA’s practice of laying off employees for two-months during the slow season put a burden on the territory’s unemployment fund and raised unemployment insurance premiums for small local businesses.

Several people criticized CBIA for not clearing the resort property of debris or repairing derelict apartments in Cruz Bay.

A taxi driver objected to not being given access through the Caneel Bay property to Honeymoon Bay where a beach bar and water sports concession remain open. Customers can hike to Honeymoon Bay or ride in dinghies provided by the concession operator. “A black person can’t bring people in, but a white boat captain, he can go in,” he said.

Engle agreed with the taxi driver that this seemed unfair, but the dirt road which services the concession at Honeymoon cannot handle regular vehicular traffic.

At the end of the meeting, Plaskett said she would soon hold meetings with Bob Vogel, the director of the Southeast Region for the Park Service, and with Ryan Zinke, the Secretary of the Interior, who oversees the National Park Service.

“Please take what we said to the table when you negotiate,” said Brummell Germain.

“I will make a decision. It may not be a decision you like,” said Plaskett.

Original Source: https://stjohnsource.com/2018/10/19/topic-of-caneel-bay-generates-contention-at-st-john-town-hall/