Nov. 27, 2003 After meeting in closed session with its legal counsel Wednesday, the Public Finance Authority voted to end a long-running dispute with Ingvolstad Trust over the ownership of King's Alley retail and hotel complex on St. Croix.
The PFA voted unanimously to end its $26,000-a-month lease of the property, which requires the authority to manage and maintain all retail, office and hotel properties. The PFA has decided to simply rent out office space at $2,000 a month for the next five years and rent out the hotel property at a monthly rate of $20 per square foot.
The PFA has in hand two options to renew the leases of the King's Alley property in five-year increments, according to an agreement presented to the board of directors. Both the office space and the hotel would require two separate leases, Kenneth Mapp, PFA executive director, said.
The authority acquired control of the property through foreclosure on a government loan to the hotel's owners that went into default.
The government has been attempting to purchase the King's Alley complex outright, but that has been tied up in court with Ingvoldstad Trust which claims the PFA improperly filed foreclosure documents.
Marie-Thomas Griffith, legal counsel for the PFA in the case, told the board the agreement would allow the PFA to continue to maintain its interest in the property without purchasing the property outright.
Mapp said the government appraised the real estate at $1.8 million and offered to buy it for $2.7 million, paid over a 10-year period with an added four-percent interest on the payments.
But Ingvoldstad Trust declined the offer, arguing the property was much more valuable, and said it would not accept an offer of less than $5.5 million, Mapp said.
Mapp said it was in the best interests of the PFA to return control to Ingvoldstad and that repairs to the roof and retail spaces alone have cost more than $65,000 during his tenure as executive director.
The PFA has already invested more than $5.25 million into the hotel. Additional renovation of the property could cost another $2.5 million.
"We believe the best position for the authority is to return King's Alley to the trust and simply become tenants," Mapp said.
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