May 28, 2003 – A day after the Senate approved it, Gov. Charles W. Turnbull on Wednesday signed into law a bill ratifying a submerged lands lease agreement and Coastal Zone Management permit issued to IN-USVI, LLC, the company planning to redevelop and expand the derelict Yacht Haven property on St. Thomas.
The governor touted approval of the project as a "turning point in the yachting, boating and marina industry in the territory which is destined to influence the economy and popularity of the Virgin Islands as a tourist and yachting center for years to come."
Further, he said, "This project is proof that our islands remain a viable option for new ventures, both large and small, and that when we work together we can make things happen."
It was the speediest processing of a piece of legislation through the lawmaking labyrinth in recent memory. Turnbull submitted the bill to Senate President David Jones on Sunday, when he also called the Senate into special session for Tuesday. Monday was a government holiday. The Legislature convened at 10 a.m. Tuesday and passed the bill at the end of the day.
On Tuesday night, the governor issued a one-page release thanking the lawmakers for "their prompt and favorable action." By that action, he said, the Legislature "has shown that, in spite of any misgivings or reservations expressed by some about the process, it supports the critical importance of this project."
The major misgivings — raised last Friday when the lease and permit were before the Senate Planning and Environmental Protection Committee and reiterated at Tuesday's special session — were:
– That CZM law forbids the leasing of submerged lands.
– That CZM law limits the length of allowable leases to 20 years, whereas the lease proposed was for 90 years.
– That IN-USVI is a subsidiary of a company that is in the process of being acquired by another corporate entity, and thus may not have a continuing interest in the Yacht Haven property as required by CZM law.
The bill submitted by the governor dealt only with submerged lands in Long Bay. IN-USVI acquired the former hotel property last year and has been granted a 90-year lease by The West Indian Co. for some seven acres of adjacent landfill that WICO owns
The bill called for ratification of the lease and permit "notwithstanding the provisions" of the V.I. Code. Whether it will be tested in court and, if so, whether it will survive the test are imponderables for the moment.
At Tuesday's special session, an executive of IN-USVI's parent company, Insignia Financial Group, said an approved lease for the submerged lands, as opposed to a permit for their occupancy, was essential to its being able to secure financing for the development — which, according to Turnbull currently carries a $150 million price tag. Also essential, the Insignia official said, was provision for reassignment of the lease.
Insignia also argued that if the Yacht Haven project was not included in a proxy disclosure that it was required to file by Wednesday, the pending merger would still go through, but IN-USVI, a wholly owned subsidiary of Insignia, would not necessarily be part of the deal.
The governor apparently was referring to this consideration when he wrote in his transmittal letter to Jones on Sunday: "If I understand the situation, if this development is to move forward and this investment is to be made for the people of the Virgin Islands, the time to act is now. This is the 12th hour and the cock is crowing."
In the Tuesday night release, Turnbull said that he was "firmly convinced that the process followed throughout consideration of the application has been proper and forthright and that the public input required by statute has been well served before both the CZM and the Legislature."
In his letter to Jones on Wednesday accompanying the signed legislation, Turnbull wrote that "the simple removal of the current derelict buildings and structures is of immeasurable value in terms of the territory's image and appearance to the approximately 1.7 million cruise ship passengers what visit Charlotte Amalie each year."
IN-USVI is proposing to build a new hotel and marina, retail and commercial facilities, a yacht club and an esplanade walkway from Havensight to downtown Charlotte Amalie, and to rehabilitate a public park near the Lovers Land intersection with Long Bay Road.
Turnbull said in Wednesday's letter to Jones that "it is important in this economic climate that we project an image of sound and deliberate judgment in support of economically viable and environmentally responsible development that will benefit the people of the territory and bring much-needed revenues to our treasury."
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