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Charlotte Amalie
Tuesday, August 9, 2022
HomeNewsArchivesEDA Board Tackles Non-Compliance Issues

EDA Board Tackles Non-Compliance Issues

The Economic Development Authority board agreed during its June meeting to lower Carambola Golf Club’s minimum number of employees from 39 to 18 to remain in compliance with its EDC tax benefits.

The golf club had been deemed “out of compliance” with certain tax-benefit requirements. It and Greenleaf V.I. were among the items on the agenda Friday for the EDA board.

In August 2002 Carambola Golf Club was awarded Economic Development Commission tax benefits for a period of 10 years. In May 2009, a change in ownership forced the resort to petition for an amendment to its EDC certificate, with the name changing from Carambola Golf Club Partners to Carambola Golf Club LLC.

The golf club filed an application for the extension and modification of its EDC benefits in November 2012, but first has to deal with being out of compliance with its employee requirements from January 2005 through December 2012. During that time, Carambola was supposed to have maintained a total of 39 full time employees, but for the past few years, that number never got above 23, according to EDA officials.

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On Friday the EDA EDA board heard the golf club’s request to waive the employee requirements for those years. EDA compliance director Stephanie Berry said Carambola had continued to operate at a loss during the 2005-2012 reporting period and was only able to maintain a minimum of 18 employees over the past seven years.

Berry said that while Carambola had not been in compliance with the employee requirements, it is still a cornerstone of the St. Croix landscape and had tried to do what it could while dealing with financial issues. The golf club was able to re-hire a few employees that it had previously laid off, and at one point had a staff of at least 23 individuals, she added.

“They have done a lot of things to compress and pool their minimal resources together,” Berry said.

She recommended that the golf club’s request be granted, and that Carambola be required to provide the names and contact information of its principals and resident agent in charge.

The EDA board agreed in principal, but disagreed on the language of the request. Instead, board members voted to change the minimum number of employees in Carambola’s previous EDC certificate from 39 to 18.

The board was less kind to Greenleaf V.I., an EDC beneficiary that provides everything from real estate to therapy management services. The company’s benefit were approved in 2003 for a period of 15 years, but a compliance review completed this January showed that it has not been meeting the requirements for contributions to local charities included in its EDC certificate.

Greenleaf was required to provide a minimum $50,000 in contributions during its first year of operation, with an annual increase of $5,000 for each year thereafter. The contributions were to be made to local charitable causes, particularly those benefitting children, EDA officials said.

However, in the past eight years, the company has contributed only $174,058 – $280,942 short of what it actually owes, according to compliance director Berry. She recommended that Greenleaf be required to cover the shortfall with donations to local charities no later than Sept. 30.

Berry said the company also reported to the EDA a 2005 donation of equipment to the Gov. Juan F. Luis Hospital that was reportedly valued at $360,000, but was found to be at least eight years old at the time of the donation and not reported on any of the company’s tax returns.

Board members decided that Greenleaf should be made to justify the value of the equipment at the time of transfer, and explain why they should not be assessed the full value of the remaining $280,942 in charitable contributions. The company has 30 days to respond, board members decided.

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The Economic Development Authority board agreed during its June meeting to lower Carambola Golf Club's minimum number of employees from 39 to 18 to remain in compliance with its EDC tax benefits.

The golf club had been deemed “out of compliance” with certain tax-benefit requirements. It and Greenleaf V.I. were among the items on the agenda Friday for the EDA board.

In August 2002 Carambola Golf Club was awarded Economic Development Commission tax benefits for a period of 10 years. In May 2009, a change in ownership forced the resort to petition for an amendment to its EDC certificate, with the name changing from Carambola Golf Club Partners to Carambola Golf Club LLC.

The golf club filed an application for the extension and modification of its EDC benefits in November 2012, but first has to deal with being out of compliance with its employee requirements from January 2005 through December 2012. During that time, Carambola was supposed to have maintained a total of 39 full time employees, but for the past few years, that number never got above 23, according to EDA officials.

On Friday the EDA EDA board heard the golf club's request to waive the employee requirements for those years. EDA compliance director Stephanie Berry said Carambola had continued to operate at a loss during the 2005-2012 reporting period and was only able to maintain a minimum of 18 employees over the past seven years.

Berry said that while Carambola had not been in compliance with the employee requirements, it is still a cornerstone of the St. Croix landscape and had tried to do what it could while dealing with financial issues. The golf club was able to re-hire a few employees that it had previously laid off, and at one point had a staff of at least 23 individuals, she added.

“They have done a lot of things to compress and pool their minimal resources together,” Berry said.

She recommended that the golf club’s request be granted, and that Carambola be required to provide the names and contact information of its principals and resident agent in charge.

The EDA board agreed in principal, but disagreed on the language of the request. Instead, board members voted to change the minimum number of employees in Carambola’s previous EDC certificate from 39 to 18.

The board was less kind to Greenleaf V.I., an EDC beneficiary that provides everything from real estate to therapy management services. The company’s benefit were approved in 2003 for a period of 15 years, but a compliance review completed this January showed that it has not been meeting the requirements for contributions to local charities included in its EDC certificate.

Greenleaf was required to provide a minimum $50,000 in contributions during its first year of operation, with an annual increase of $5,000 for each year thereafter. The contributions were to be made to local charitable causes, particularly those benefitting children, EDA officials said.

However, in the past eight years, the company has contributed only $174,058 – $280,942 short of what it actually owes, according to compliance director Berry. She recommended that Greenleaf be required to cover the shortfall with donations to local charities no later than Sept. 30.

Berry said the company also reported to the EDA a 2005 donation of equipment to the Gov. Juan F. Luis Hospital that was reportedly valued at $360,000, but was found to be at least eight years old at the time of the donation and not reported on any of the company’s tax returns.

Board members decided that Greenleaf should be made to justify the value of the equipment at the time of transfer, and explain why they should not be assessed the full value of the remaining $280,942 in charitable contributions. The company has 30 days to respond, board members decided.