Senators moved legislation out of committee Tuesday appropriating $1 million for unspecified expenses aimed at getting brand name hotels onto St. Croix, after adding reporting requirements and a wish for a hotel near St. Croix’s airport.
The legislation requested by Gov. Kenneth Mapp calls for $1 million to pay for "professional services, studies and expenses related to the planned development and financing of The St. Croix Brand Hotel Project. [Bill 31-0375] The committee first heard the bill on June 24, but senators raised concerns that it was too vague and that $1 million was too much money to appropriate without any controls or explanation. (See Related Links below)
Public Finance Authority Director Joanne Bozzuto told senators there was no line-item budget and that expenses were broadly related to the need to "build a relationship with China." She said when Mapp and administration officials went to China in late May and early June, they "met with Chinese hedge funds who have high, high net worth clients."
Pressed for details of what the money was for, Bozzuto said on June 24 that she thinks "part of the money is to pursue all options to bring equity investments into the territory."
On Tuesday, senators amended the bill to require the administration to report back to the Legislature within 60 days of spending the first $400,000, then twice more, after spending another $300,000 and the final $300,000. They also added an amendment to require the administration to attempt to get a small hotel near the St. Croix airport.
The reporting requirements assuaged most, but not all, of the senators.
Sen. Tregenza Roach said he believed hotel development was very important for St. Croix, but that it bothered him that the rationale for the money had shifted and that there was no specific spending purpose.
Originally the request was presented as funding for a hotel study, Roach said. "But after we discovered the study had been done by the PFA already, the purposes of the million dollars shifted …to getting the project to completion," he said.
And when asked about what the money was for, "in each instance the response was there was no budget prepared setting out how this million dollars would be spent and how it would achieve the objective of building a hotel on St. Croix," he said.
Because the amendment does not have these details or condition the spending on meeting guidelines, Roach said he cannot support it at this time.
Sen. Clifford Graham said he initially shared similar concerns, but gathered from Bozzuto’s testimony that "it was for all of the soft costs and all of the other auxiliary costs to help get a hotel on the way to construction on St. Croix."
Sen. Sammuel Sanes said he was satisfied that the amendments would address the concerns about accountability, adding, "We can always call a session and put a stop to it" if there are problems.
Sen. Positive Nelson said he was not convinced that there were effective controls in the legislation.
"Once we get this report, they can say the rest of the money is already obligated," he said. Nelson suggested the PFA could spend its own resources on the work. The PFA would still need legislative authorization to do so.
Voting to send the bill, as amended, on to the Rules and Judiciary Committee were Sanes, Graham, Sens. Marvin Blyden and Myron Jackson. Voting no were Roach and Nelson. Sen. Kurt Vialet was absent.
The committee also approved a lease in Sub Base in the Chinnery Building at No. 35 Estate Nisky, of a two-story structure with 13,500 square feet of office space to the Monroe County, Fla., sheriff’s department, for High Intensity Drug Trafficking Area agency offices. The lease is for $189,000 per year, with the lessee obligated to perform extensive renovations of up to $100,000 per year. It is for five years with options for three five-year extensions.
The committee also approved an appropriation transfer for the Finance Department, moving $275,000 from the utility line-item to personnel cost to pay for raises.