May 26, 2003 – IN-USVI, the company seeking to redevelop the derelict Yacht Haven property on St. Thomas, accused legislative chief legal counsel Yvonne Tharpes of inaccuracy, inconsistency, legal error and anti-business bias in a letter written on Sunday to Senate President David Jones.
The letter expressed the company's concern that "over three years of dedication and hard work of all involved in the Yacht Haven redevelopment project and millions of dollars in investment could be simply ignored and its success jeopardized." by objections Tharpes raised Friday to the government's plan to lease submerged lands to the company and to do so for a period of 90 years.
At Friday's Senate Planning and Environmental Protection Committee hearing on the lease and a CZM permit for development of the submerged lands, the committee chair, Sen. Louis Hill, called a sudden halt to the proceedings half an hour after Tharpes submitted a 31-page legal analysis in which she pronounced the 90-year length of the proposed lease illegal and said the government can only grant occupancy permits for submerged lands, not lease the lands.
"The analysis came to me about five minutes before the session started," Hill said Sunday. He said he'd had no idea "that it was going to be such a big document," nor that Tharpes "was going to raise so many questions."
His reaction, Hill said, was that "it was only fair to the people involved" to provide them time to review Tharpes' report and "to respond to the issues she raised." He said this applied to the investors and developers as well as to the senators and that he would reschedule the committee hearing for this week.
On Sunday, however, Gov. Charles W. Turnbull pre-empted that possibility, calling the Senate into special session on Tuesday to act on a bill he submitted authorizing and approving the 90-year lease to IN-USVI of the submerged lands and authorizing and ratifying the CZM permit for their development.
The submerged lands are a third property component of the redevelopment project, in addition to the land on which the old Yacht Haven Hotel is located, of which IN-USVI is the principal owner, and some seven acres of adjacent landfill that The West Indian Co. owns and has agreed to lease to the company. According to the IN-USVI letter to Jones, the redevelopment plan calls for a "yacht club" to be located in a marine area included in the submerged lands lease.
The letter sent to Jones accused Tharpes of taking "the untenable position that her legal analysis and opinions should be considered gospel, while the positions and opinions of all others must be discarded as absurd."
According to the letter, IN-USVI officials had discussed with Tharpes more than a year ago the issue of leasing submerged lands for a period exceeding 20 years. "She agreed that the statute on the 20 year limit did not refer to submerged lands leases and she suggested … that an attorney general's opinion be sought," the letter stated.
IN-USVI then did seek Attorney General Iver Stridiron's opinion, the letter said, and his opinion was that the 20-year limit "does not apply in the context of submerged lands." Also, it pointed out, the lease agreement was negotiated "over a long period of time" with CZM director Janice Hodge and legal counsel Julita de Leon and Planning and Natural Resources Commissioner Dean Plaskett, who also is a lawyer. "IN-USVI believes that it has followed the law in all respects and should be entitled to rely on the opinion of the attorney general and several other legal authorities," the letter said. "We dotted every 'i' and crossed every 't,' and more."
As precedent, the letter cited the government's having leased submerged lands in Crown Bay to the Port Authority; however, the Port Authority is a government entity.
IN-USVI also argued in the letter that "The CZM Act uses the terms occupancy permit and lease interchangeably and neither forbids not requires the use of either one." However, the company then said, "Were IN-USVI to simply have a CZM occupancy and development permit, the project would be dead before it even began. Neither the kinds of lenders who will be needed to finance this project nor the investors required to see it through would be able or willing to invest their funds without the ability of IN-USVI to mortgage its interest in the lease agreement."
The CZM permit "is only a development permit and not an occupancy permit," it added.
The letter protested Hill's action Friday night, saying of Tharpes that "While we anticipated the typical anti-development, anti-business legal opinions for which legislative counsel is well known and we were ready to refute expected inaccuracies Friday, we were not given the opportunity to do so."
The letter also dismissed concerns raised by Tharpes that a planned takeover of IN-USVI's corporate owner, Insignia Financial Group, could mean that IN-USVI might not have a long-term interest in the Yacht Haven property.
IN-USVI, a V.I. limited liability company, is the holder of record of interests in all of the property slated for development and will continue to be after the anticipated merger in June of Insignia Financial Group with another commercial property management giant, CB Richard Ellis, the letter said. Further, it said, Insignia USVI Corp., a V.I. corporation, is the manager of IN-USVI and will continue to be its manager after the merger.
Ron Uretta, a top Insignia executive, was at the Friday hearing. Elie Finegold, another Insignia and IN-USVI executive, has been a spokesman for IN-USVI.
The Source was provided a copy of the first three pages of the letter to Jones; the final page was missing and thus it was not possible to determine over whose signature the letter was sent. There was no response as of Monday night to a request to a local IN-USVI representative for the missing page.
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