Congressional Panel OKs Caneel Bill with Amended Rent Clause

Caneel Bay.
Caneel Bay.

The House Committee on Natural Resources moved forward a bill Wednesday that aims to extend Caneel Bay Resort’s terms of operation on National Park land, but amended the way the resort’s rent would be calculated.

Critics of the bill, including the National Parks Conservation Association, have said the rent it proposes – 1.2 percent of the resort’s gross revenues paid quarterly to the U.S. government – is too low. Since 1983, the resort has operated under a retained-use estate which requires it to pay no rent.

That RUE, which is set to expire in five years, will be extended for another 60 with the new rent requirements, if the bill becomes law.

An amendment proposed by committee chairman Rob Bishop (R-UT) Wednesday nixed the bill’s 1.2 percent figure and replaced it with an unspecified “fair market rental fee determined by an independent appraiser.”

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At a previous hearing at which the bill was discussed, Gary Engle, a member of the executive committee of Caneel Bay’s holding company CBI Acquisitions, testified that he proposed the 1.2 percent figure in the bill to its sponsor, V.I. Delegate to Congress Stacey Plaskett.

The number, he said, was in line with a recommendation from an appraiser approved by the NPS, and took into account the magnitude of the resort’s rebuilding expenses.

A statement on the bill from the National Parks Conservation Association, however, accused the bill of “accommodating the sole private interests of CBI Acquisitions and prioritizing the interests of the resort guests, not necessarily park resources.”

According to the NPCA, Caneel Bay’s terms of operation are unconventional, and a more standard concessionaire contract would be more profitable for the park, and more in line with conservation goals.

“Concessionaire contracts, the most common type of agreement for facilities like the Caneel Bay Resort in national parks, which utilize their remarkable park locales for excellent fiscal returns, undergo a competitive bidding process and are frequently required to provide NPS with a percentage significantly higher than 1.2 percent,” the NPCA’s statement reads.

Since 2010, the NPS and CBI Acquisitions have been in talks to determine a new lease agreement in in preparation of the current RUE’s end in 2023. An agreement had not been settled when Hurricanes Irma and Maria battered the V.I. and all but destroyed the resort in September 2017.

Delegate to Congress Stacey Plaskett (File photo)
Delegate to Congress Stacey Plaskett (File photo)

V.I. Delegate to Congress Stacey Plaskett introduced the bill to extend Caneel’s RUE in December with the stated aim of hastening the rebuilding of the resort, which according to her office contributes $65 million to St. John’s economy annually and employs approximately 500 V.I. residents.

CBI Acquisitions’ executive staff expressed hesitation in making the necessary investments in repairing resort infrastructure after the storms without a “sufficiently long-term and commercially reasonable agreement” with the government.

Following the bill’s forward movement at Wednesday’s hearing, Plaskett issued a statement saying, “Given the urgency for Caneel to find capital post-storm, and recognizing the impact potential closure of the resort would have on the VI economy, I introduced this bill that will extend the RUE and would require Caneel to provide payments to the federal government for use of the land.”

“I want to also thank Chairman Bishop for coming to the Virgin Islands and listening to our Chamber of Commerce in regards to how important Caneel Bay is to the island. I also want to thank him for his amendment addressing rental fees,” she added.

The bill must still be passed by the full House of Representatives, and the Senate, before it can be sent to the president to be signed into law.

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