Dec. 18, 2003 – A bill to amend the Casino and Resort Act of 1995 paving the way for Carambola Resort to qualify automatically for a casino license was rendered dead in the water Wednesday after the Senate voted to remove it from the agenda.
JS Carambola, LLP, which is proposing to purchase the St. Croix resort, has entered into an "admission agreement" with the Turnbull administration to invest more than $41 million in the property and to give the government 25 percent interest in it for a $1 investment in return for a casino license.
The law on the books provided for hotels meeting certain facilities criteria to qualify automatically for a casino license if the government held as least 25 percent interest in the properties as of 1995. The bill seeks to remove the 1995 cutoff, and thereby make Carambola eligible for automatic licensing. It would open the doors for any hotel operating with a minimum 25 percent government interest and the requisite facilities to qualify for a casino license.
JS Carambola officials have said they cannot obtain financing for the acquisition of the resort without agreement on casino licensing in effect — and that the company has until Friday to close a deal to acquire the funding.
On Wednesday, after listening to comments by Eileen Petersen, Casino Control Commission chair, and much floor debate, legislative legal counsel Yvonne Tharpes read her six-page opinion finding the arrangement between the government and JS Carambola illegal.
The government cannot become a "limited partner" with the casino under the Uniform Limited Partnership Act, Tharpes said. "Inasmuch as the government of the Virgin Islands as a limited partner will hold no interest in or title to the Carambola Hotel when the partnership completes the purchase, the hotel will not be eligible for automatic casino licensure [under the casino law]," she said, "by virtue of the government's lack of involvement with the hotel."
She said the government is not a "natural person, partnership, limited partnership, trust estate, association nor a corporation. Consequently, the parties cannot enforce the admission agreement."
Further, Tharpes said, the "admission agreement's redemption arrangement is contrary to the declared public policy and legislative intent of the government. The provision is therefore unenforceable as against public policy. Moreover, the entire agreement may be void and unenforceable inasmuch as the government cannot lawfully become a limited partner under the Uniform Limited Partnership Act."
Joe Sinicrope, managing partner of JS Carambola; Nathan Simmonds, director of the governor's Office of Fiscal and Economic Recovery Implementation; and Attorney General Iver Stridiron, all testified in addition to Petersen (who had left the chambers by this time). After listening solemnly to Tharpes' opinion, none of them said what their next step might be.
Sen. Ronald Russell, a lawyer, railed against the bill on Wednesday as he had previously at a Rules Committee hearing. " It is bad law," he said repeatedly.
Petersen was of the same opinion: "The Casino Commission cannot, and will not ever, give an automatic license to anyone," she told the lawmakers.
Russell said, "From the onset in Rules, I've said just because it would provide jobs and hotel rooms, that's not enough. We need to take a closer look." He added: "If you remove the casino provision, it would benefit everybody."
He also noted that since the Divi Carina Bay Casino opened more than three and a half years ago, St. Croix's unemployment rate hasn't gone down, as envisioned in the casino act. Indeed, "it's higher now," he said.
Sen. Almando "Rocky" Liburd cautioned against tampering with the casino law. "I've been in the Bahamas and other gambling areas, and everybody has the utmost respect for the V.I. gambling laws," he said.
Senators grilled Sinicrope at length, but he remained stoic throughout, maintaining that his only interest is in developing the resort to benefit St. Croix and offer jobs.
Sen. Louis Hill took issue with the project. "While I understand the plight of St. Croix, the Legislature has to ensure that laws will meet the test of time and will stand up to challenges in court and do not grant special privileges," he said. "There are blatant discrepancies in this agreement."
After Tharpes' opinion was read and the hue and cry had died down somewhat, senators voted 7-6 to remove the bill from the agenda, rather than voting it up or down. Senate President David Jones said on Thursday morning that removal of the bill didn't kill it; the measure can be placed on a future agenda.
Voting to remove the bill were Sens. Lorraine Berry, Adlah "Foncie" Donastorg, Norman Jn Baptiste, Liburd, Usie Richards, Russell and Celestino A. White Sr. Voting to keep it on the agenda for a vote were Sens. Douglas Canton Jr., Roosevelt David, Emmett Hansen II, Jones, Shawn-Michael Malone and Luther Renee. Sens. Carlton Dowe and Hill abstained.
The long session, which ended shortly before 11 p.m., was marked by ongoing discord, with senators crossing majority-minority lines on some votes, strolling around the well, and making such a racket that personnel from the Journal Section, which is responsible for tallying votes, had difficulty hearing some roll-call responses.
The Legislature passed bills to:
– Create a 90-day amnesty program within the Labor Department for employers who failed to file Unemployment Insurance Program reports.
– Amend the V.I. Code to bring it into compliance with federal law prohibiting age discrimination in hiring practices.
– Reduce the number of hours of community service required of high school students for graduation to 100 from the current 500.
– Make Territorial Court the final arbiter on decisions of the Board of Education.
– Declare quelbe the official traditional music of the Virgin Islands. Quelbe, or scratch band music, is an indigenous, grass-roots style of music that originated in the Danish West Indies more than a century ago. It came to be known as "scratch" music because the musicians were free to "play" anything they could scratch up and make sound with — including brake drums and exhaust pipes. Jamsie and the Happy Seven and Stanley and the Ten Sleepless Knights are popular bands known for their quelbe music.
The Senate also approved 33 agriculture leases all in a block, along with leases to Felix Santana doing business as Subbase Wreck Shop, and to Matric Enterprises.
All 15 senators attended the session, which was presided over in the morning by Senate Vice President Berry and in the afternoon by Jones.
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