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Proposed Casino Developers Want Regulations Relaxed

Nov. 10, 2008 — John Boyd wants the Legislature to amend the law to allow him and his partners to build a standalone casino by Gallows Bay called The Sugar House.
Boyd unveiled the plans Monday at The Palms at Pelican Cove, giving out glossy flyers and showing a PowerPoint presentation to 30 or so interested residents and media, answering questions afterward.
Boyd, representing several partners in a development company calling itself Red Diamond Enterprises, is proposing to build a three-story facility on a currently empty lot between Christiansted and Gallows Bay at Nos. 1 and 2A Eastern Suburb. The top floor would house the casino itself. The first-floor plans call for 35 small, 100-square-foot shop spaces with rents of only $125 per month. The second floor would be set up for a food court with space for "six local restaurants," with rents of $200 a month.
"It's my understanding under the Casino Control Act the casino has to be part of a hotel," said Raymond J. Williams, chief of staff for Lt. Gov. Gregory R. Francis.
"That's why I need the law changed," Boyd said.
The Casino Control Act of 1995, with later amendments, provides for a limited number of casino licenses specifically for hotels, envisioning casinos as an amenity offered by a hotel and a way to entice developers to build hotels. Boyd and his partners cannot build a casino unless the law is amended. A casino owner must either be born here or continuously domiciled in the Virgin Islands for at least five years. Boyd has been a St. Croix resident since the early 1980s and easily qualifies himself, but he and his Red Diamond Enterprises partners want that changed, too.
"If that were actually adhered to, it would mean no bank would lend for the development, because they would not be able to take possession of the property through foreclosure if the borrower defaulted," Boyd said.
Along with changing the casino commission act to allow a casino without a hotel and a non-native to own a casino, Boyd wants to sweeten the amendment by requiring 10 percent of "net profits" be earmarked as "charitable contributions" and "community reinvestment" of 50 percent of "net profits." The Senate would automatically review the operation after five years.
"I should have to give something back," he said. "A bill is being drafted, and I hope it will be introduced by year's end."
Though the law would have to be changed, licensing and zoning may be simpler than many projects.
"It is zoned B3, it is outside the historic district and outside the coastal zone," he said. There are strict rules about construction within the historic district, and being outside the coastal zone eliminates a major licensing hurdle.
As part of the bargain, the proposed Sugar House would assume responsibility for the lighting, maintenance and repairs of the parking lots on Strand Street and Gallows Bay, and provide security at both lots during their hours of operation. Boyd plans to work out an arrangement with licensed taxi drivers to run safari buses back and forth from the parking areas.
Some in the audience were skeptical.
"My concern is if you allow one person to have a casino without a hotel, you will have one after another asking for the same thing," said Roy Rodgers, a local representative of casino developer Paul Golden, who is trying to build a casino and resort at Great Pond on St. Croix. Senate oversight every five years would help prevent that, Boyd said.
One person asked about parking, saying existing parking is regularly full.
"At 6:01 they aren't full anymore," Boyd said. "You can park throughout the town at night. And once the bypass is done, there will be no one coming downtown."
Boyd moved to St. Croix in the early '80s to work with an EDC company called Island Chemical. When the company abruptly went under, his family liked their life here and they stayed rather than move to find similar work elsewhere. He was involved with two restaurant startups, The Pig's Ear in Christiansted and The Wayward Goose in Frederiksted. Then he did a stint at the Small Business Development Center helping entrepreneurs prepare their business plans.
"The last business plan I did was for my wife to open a dry-cleaning business in Sion Farm," he said. "Now I work for her."
Boyd is also known for performing political opinion surveys in the territory during election season.
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