The Government Employees Retirement System’s board of trustees voted to restructure its loan to the St. Croix’s Marriott Renaissance Carambola Beach Resort Thursday.
Under the terms of the new agreement, the interest paid by the resort drops from 10.25 percent to 6.3 percent, according to GERS Board Chairman Raymond James.
The vote to accept the recommendation of the GERS Loan Committee came at the end of Thursday’s regularly scheduled monthly board meeting, and following discussion during an executive session. The modification was approved by a 6-1 vote, with board member Edgar Ross voting against.
GERS lent the resort $15 million in December 2009, $8.2 million of which went to purchase bank loans and judgments, pay off liens, and closing costs, with the remainder used for renovating the property to meet Marriott standards.
As renovation got under full swing, the hotel found it difficult to make the payments. Rooms being renovated down to the bare walls could not be rented, and the resort’s cash flow suffered.
In November, GERS board members toured the facility, and were told by Carambola’s management that renovations should be completed by the end of the year. Thursday, James said the tour had been a success.
"The reviews of the renovations are stellar," he said.
In other business, the trustees:
• Voted to pursue having GERS become lead plaintiff in a pair of cases in which investors claim two firms – North Carolina-based Primo Water Corporation and Green Mountain Coffee Roasters of Vermont – manipulated revenues (in the case of Green Mountain Coffee) and over-hyped statements and expectations (Primo Water) to an extent that defrauded investors. GERS lost $800,000 in the two investments, according to information supplied to the board.
• Received a financial statement for November that showed the system is continuing to hemorrhage money. During November, the system took in a total of $10.5 million from all sources and paid out $21.5 million ($17 million in annuity payments to retirees), amounting to a $10.9 million deficit. For the same month in 2010, the system took in $11.1 million and paid out $21.7 million ($16.1 million in annuity payments to retirees), with a $10.5 million deficit.
• Set dates for meetings with members of the GERS on St. Thomas and St. Croix. The St. Thomas meeting will take place Jan. 18, and the St. Croix gathering a week later on Jan. 25. The meetings will be held at a time and place to be determined.
• Approved an operating budget for the fiscal year of $21.6 million. Details of the budget were not available to the public following the meeting because changes had been made that were not reflected on printed copies.
• Set their calendar for board meetings in 2012. Unless noted, all meetings begin at 9:30 a.m. The meetings will be held:
- Jan. 19/St. Thomas
- Feb. 16/St. Croix
- March 14, 15, 16/St. Croix at 9 a.m. (semi-annual investment meeting)
- April 19/St. Thomas
- May 17/St. Croix
- June 21/St. Thomas
- July 19/St. Croix
- April 29, 30, 31/St. John at 9 a.m. (semi-annual investment meeting)
- Sept. 20/St. Thomas
- Oct. 18/St. Croix
- Nov. 29/St. Thomas
- Dec 20/St. Croix