The trustees of the V.I. Government Employees Retirement System paid a visit to St. Croix’s Marriott Renaissance Carambola Beach Resort Saturday to see what the hotel has been doing with the money GERS lent it.
The short answer is: A LOT.
GERS lent the then-struggling resort complex on St. Croix’s north side $15 million two years ago to help it renovate the complex. Recently, the hotel has had difficulty making payments on the loan, and in August asked for help, suggesting a restructuring of the debt.
Saturday morning, hotel representatives met with the GERS board on the property. While surf crashed on the beach and the sun played hide and seek with the clouds, the officials talked about the challenges they’ve faced and the progress they’ve made.
General manager Eddie Sipple said the renovation is about 60 percent complete. About 16 of the 26 buildings have been completed, with four more ready to come on line in the next few weeks.
Work is either under way or scheduled in the remaining units, and the hotel is aiming at completion of the work by the end of the year, Sipple said.
The problem, of course, is that while a room is being renovated it can’t be rented, so during the process the hotel’s revenues are down.
The time a room is out of service creates some juggling acts for the hotel staff, added Michael Walsh, president of Florida-based Ocean Properties, the ownership group.
Renovation isn’t just a matter of slapping some paint around and putting in some new sheets.
The work includes stripping the rooms to the walls – including taking out old drywall – crews then strip and refinish the wood – the woodwork alone takes several weeks, Sipple said. This is followed with putting in new tile, and replacing everything – furniture, plumbing fixtures, electrical, the works.
And it’s not just getting new things in the room; it also involves thinking about how the room is used.
Originally the beds in the bedrooms were on the same wall as the windows, he said.
"That’s crazy! People want to lie in bed and look out at that!" he said, pointing out the window to the beach.
In all the newly renovated rooms, the beds have been resituated to the opposite walls, so guests can enjoy the view.
Outside one of the un-renovated buildings, Walsh showed where screw heads were rusting and causing dark stains on the exterior paneling.
"If we just painted over that it would be back in six months," he said. Instead, workers have replaced sea-damaged paneling, and the screws are specially treated to prevent that kind of rust damage.
The results were impressive, trustees agreed.
Sipple and Walsh also pointed out that the landscaping had been cleared so that ocean vistas could be seen from all over the property. Even mundane items such walkways and drives have been replaced to make the visitors’ experience more pleasant and to meet Marriott’s standards.
The tour was completed with visits to the hotel’s newly upgraded spa and exercise room.
Recently, Carambola landed a visit at the end of the month by Applebee’s executives, a meeting that had originally been planned for a Mexican retreat.
While they were thrilled, both with getting Applebee’s business and what it could mean regarding the hotel’s growing reputation, it also has them scrambling to find enough rooms for both the restaurateurs and other groups that have already been booked.
Walsh added that, while the un-renovated rooms can still be rented, he prefers not to because, while adequate, they aren’t as nicely appointed as the newly redone units, and aren’t up to Marriot standards.
But while "where do we put all the guests" might be a problem, it is at least the good kind of problem for a hotel to have, hotel officials said.
Another problem the hotel faces is one that ought to be familiar to anyone in the islands – the high cost of electricity.
Walsh said the resort has a complete and reliable generator system, but the Department of Planning and Natural Resources determined they didn’t have the necessary permits to operate it.
While that paperwork is being untangled – and it has so far taken months – they’ve had to use power from the Water and Power Authority: a 20-day period last month cost $120,000, Sipple said.
"That’s 60 percent of our revenues. You can’t operate a business that way," Sipple added.
One side beneficiary of the renovation has been St. Croix’s charitable groups, many of which have received the furniture, fittings, and refrigerators from the units and have either used them in their projects or sold them to raise funds, Sipple continued.
After the tour, the GERS board met in executive session with the hotel officials for more than an hour, discussing the resort’s financing and how the loan might be restructured. No action was taken.
Sipple said he expects the GERS trustees to meet again in the next week to finalize arrangements if any are to be made.