Oct. 30, 2003 – Demolition of the onetime Virgin Isle Hotel on St. Thomas was supposed to begin last March to make way for a new veterans housing and social services complex, but the derelict structure, destroyed by Hurricane Hugo in 1989, still stands untouched. And the not-for-profit corporation that was to do the developing has become a for-profit entity instead.
The Senate Labor and Veterans Affairs Committee tried on Wednesday to find out why the Veterans Resource and Multipurpose Center appears to be dead in the water. According to members of the board of Veterans Resource and Development Inc., the project is stalled because it has no contractor.
Alton A. Adams Jr., the board chair, told the Senate committee that the board has been unable to find a contractor able to qualify for a payment and performance bond. "What has happened has been a source of embarrassment to members of the board," he said.
He said the board had been in negotiations with ZVI Construction but recently terminated discussions. He said another company is being sought but declined to give details. "Once a new contractor is brought in, construction should begin in another six months," he said.
The project involved the construction of 162 residential units — apartments and three-bedroom bungalows — that are to be rented to low-income people, with veterans having first priority. There also will be offices for social service agencies involved in addressing the needs of residents.
Abandoned since 1989, the Virgin Isle Hotel, at one time a Hilton property, became a haven for vagrants and a meeting place for drug transactions. In 1998, after failing to find a buyer for the property, the consortium of owners gave it to the V.I. government in return for the waiving of outstanding property taxes reportedly totaling several million dollars.
In 2001, the Senate Labor and Veterans Affairs committee, then headed by Sen. Norma Pickard-Samuel, approved a $1-a-year lease and appropriated $300,000 to Veterans Resource and Development, then a not-for-profit corporation headed by Samuel Ebbesen, senior vice president of Innovative Communication Corp , to manage the facility.
At Wednesday's hearing, Sen. Celestino A. White challenged the board. "The banker is waiting, and no one is coming to the door because no one knows who is in charge of what," he said, pointing out Cassan Pancham, president of FirstBank of the Virgin Islands, in the chambers.
Last January, Delegate Donna M. Christensen announced that the Federal Home Loan Bank of New York had awarded the not-for-profit corporation a grant of $1.6 million for the redevelopment . (See the St. Thomas Source report "V.I. Hotel to be razed to make way for housing".)
It became public knowledge at the Wednesday hearing that the organization is now a for-profit enterprise.
Sen. Louis Hill wondered how the not-for-profit agency had become a for-profit company — called Community Housing Corp. "The government probably wouldn't have entered into a $1-a-year-lease with a for-profit company," he pointed out.
Derek Hodge, the company's attorney, said the Community Housing as a for-profit company would earn revenues to support programs in the project.
"Now I understand." Hill said. "It's moved from the altruistic focus to a business venture."
Pickard-Samuel, known for her verbal sparring during her single term as a legislator, told the committee: "It's all a bit much to me." She questioned how the money appropriated to the Veterans Resource and Development corporation has been spent. "There are a lot of things going on that certain members of the board aren't privy to," she said. "I wanted things done in a certain way, and they shoved me out."
Pickard-Samuel said she had information, including "dates and times" of how the funds were misspent. "So many people have little parts of the situation, it's hard to see the entire picture of what is going on," she said. "So, we can clearly draw the lines and see who was involved in the project and involved in getting the fees."
Samuel's husband, Gilbert Samuel, is treasurer of the development company.
Adams, speaking later in the hearing, said: "I don't know about the others, but I feel bad. You should request minutes of the board meetings."
Harold Baker, vice president of the development firm, said: "I feel terrible. My commitment is to see it through." He said the proposal from ZVI Construction "didn't sit well with us."
Sen. Norman Jn Baptiste, who chairs the Senate committee replied: "Since you feel bad, did you make an offer to get it going forward?"
"I can assure you, the board will move hastily to fruition," Baker answered.
Jn Baptiste said he wasn't satisfied with all the answers he was getting. "There are certain persons who did not want this meeting," he said, pledging to call another hearing "within a month."
In other action, the committee:
– Tabled a measure to waive for one year a requirement of the Unemployment Insurance Act.
– Approved a proposed Labor Department unemployment insurance amnesty program.
– Approved an amendment to bring V.I. law into compliance with federal law concerning age discrimination, and for related purposes.
Committee members attending the hearing, which ended after 8 p.m., were Sens. Jn Baptiste, Hill, Usie Richards and White. Sen. Douglas Canton Jr. was absent.
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