Jan. 9, 2009 — Diageo will build its Captain Morgan rum distillery on the property owned by St. Croix Renaissance Park, east of the Henry E. Rohlsen Airport, the company announced Friday. The lease was discussed in Friday's Public Finance Authority meeting, where board members passed a resolution allowing the agency to go to the market to float up to $250 million in bonds to help finance the project.
The announcement by Diageo provided new details. The company signed a long-term lease agreement for an 11-year term with five 10-year renewal options on undeveloped 26 acre section of the St. Croix Renaissance Group's 1,244 acres of industrially zoned land.
"The construction and operation of this Diageo rum distillery will continue the Diageo tradition of Captain Morgan sourcing from the best rum stocks in the Caribbean," said Dan Kirby, Vice President Supply, Diageo USVI, in the company's statement. "We are excited about the prospect of creating jobs for the residents of the Virgin Islands and helping to advance St. Croix's economic diversification, while preserving its ecosystem."
Gov. John deJongh Jr. weighed in on the announcement as well.
"The Diageo project is moving forward, and we could not be more pleased with the commitments that Diageo has made to our community," said deJongh. "They are moving ahead on schedule, and have submitted to the Coastal Zone Management Commission plans that reflect the highest environmental standards."
Renaissance Park is an industrial park located on 1,244 acres along the southern coast of St. Croix. From 1962 until 2000, the site was used exclusively for alumina production. St. Croix Renaissance Group purchased the property in June 2002 from Alcoa World Alumina, and laid out a master plan for the property that includes full refurbishment and utilization of the on-site 60 MW power plant, desalination plants, machine shop and port facilities in order to attract top-notch industrial and commercial tenants.
In addition to Diageo, Geonet Ethanol opened its $100 million ethanol dehydration plant at Renaissance Park in 2007. This facility has the capacity to produce more than 100 million gallons per year of fuel grade ethanol for use as a gasoline additive in the U.S. market.
The agreement with Diageo will bring approximately $2.9 billion in new excise-tax revenues into the government's coffers throughout the life of the agreement, according to Government House. Rum production is expected to start in 2012, with the distillery producing an average of 20 million-proof gallons each year.
The federal government currently collects $13.50 in excise taxes on each proof gallon of V.I. produced rum sold throughout the mainland. Of that amount, $13.25 is remitted to the V.I. government.
Captain Morgan is the number two rum in the world, with sales of more than 7.5 million cases a year. Diageo, headquartered in the UK, owns Guinness, Johnny Walker, J&B, Smirnoff, Tanqueray and Jose Cuervo, in addition to Captain Morgan.
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