It looks like all systems are go for the redevelopment of the old Renaissance property in Smith Bay into a Wyndham-Margaritaville Vacation Club.
St. Thomas attorney George Dudley, who represented Wyndham St. Thomas Development LLC at an Economic Development Commission hearing earlier this week, said Friday that after the hearing the EDC approved Wyndham’s request for tax benefits that will allow it to build and operate 263 time share units at the site, at a cost of $90 million. Gubernatorial approval of EDC board decisions is usually a formality, and Gov. John deJongh Jr. is expected to sign off on the certification soon.
Percival Clouden, Economic Development Authority’s chief executive officer, said in a text message reply to Source inquiries, "The board approved the Wyndham request for modifications to its existing approval. This will have a positive impact on the economy in terms of jobs, investment [dollars] and the induced and multiplied effect on the local economy."
Things were moving so fast that singer/songwriter-turned-franchise-entrepreneur Jimmy Buffett is expected to attend a “small function” in the territory next week to “meet some people,” Dudley said.
Wyndham is partnering with Buffett’s Margaritaville enterprise to make the Vacation Club a themed resort. The Margaritaville website features a number of restaurants, bars, marinas, hotels and casinos bearing the name, most of them in the kinds of sunny, shore-side locales Buffett sings about, including cities in Florida, Mississippi, and Louisiana.
The St. Thomas resort is scheduled to open in January 2015, when its common areas, restaurant, pool and a portion of the units are expected to be completed.
Barring unforeseen circumstances, such as a really bad turn to the weather, Dudley said he expects the developers to meet that deadline.
“We have our CZM (Coastal Zone Management) permits already,” he said, and the process for getting the building permits is straightforward.
Financing is almost in place, too, according to Dudley. The financing arrangement for construction is a bit unusual. Wyndham will sell the property to an investment bank to handle the construction, then buy it back when the construction is complete.
He likened the arrangement to that at many of the major hotels in the Virgin Islands, wherein one company owns the hotel and another manages it.
“This is a variation on that theme,” he said. Although the bank will get the EDC benefits while it holds the property, Wyndham will remain responsible for EDC compliance.
The financing was a bit of a chicken-and-egg situation, he said. Wyndham couldn’t finalize the agreement with the bank until it had EDC approval, but it couldn’t get EDC approval unless it could show it had financing. Now that it has approval, the deal with the bank will close quickly. The name of the bank was revealed to the EDC board in executive session, but won’t be public until the agreement is final.
“This is going to be the third time that the investment bank has partnered with Wyndham to develop projects,” Dudley said.
“We’ve got lots of ground to cover” to get the project moving, he added. That includes registering the time-share club in numerous states so it can be marketed to potential buyers, and also getting permits to market the units with the Margaritaville label.
The rush stands in stark contrast to years during which the existing resort has languished. Owned and/or operated by a number of chains over the years, including Stouffers, the Renaissance and Palace Resorts, it has been closed and reopened a number of times, but has sat empty since 2004. Pineapple Palm Resorts LLC purchased it in 2006 for $17.5 million, proposing to make it a Crowne Plaza Resort, but that didn’t happen. Wyndham bought it a year later for $31 million.
Wyndham’s original proposal was for a 290-room hotel and 145 time share units. They modified the application for EDC benefits, eliminating the hotel and increasing the time share units to 262.
The property will be part of Wyndham’s Vacation Club network. Unlike traditional timeshare operations, owners will not purchase a set number of nights at the Smith Bay property, but rather points in the club network. They can redeem their points for visits to any Wyndham property in the network.
Construction is expected to cost $51 million, Dudley said. He did not have a figure for the number of temporary jobs that will be created in the building phases. But when the resort is completed, he said there will be 130 permanent positions. Wyndham will give preference to people who were laid off from the hotel when it closed years ago and will work with the Labor Department to locate them, he said.