St. John residents got their first opportunity to meet face-to-face with one partner in the group hoping to take over the Caneel Bay Resort lease and accelerate the process of rebuilding the iconic hotel that was destroyed by Hurricane Irma in 2017.
Matthew O’Hayer, one of four major partners of the Caneel Purpose Group, fielded questions posed by several dozen community members at an informal meeting held Tuesday night at the Rec Center in Cruz Bay.
The Caneel Purpose Group is seeking community support for their proposal to build a boutique luxury eco-resort on the 150-acre property within the V.I. National Park.
O’Hayer told the audience that his group was open to numerous suggestions put forth by the community during the past year. These include:
Year-round local employment with a $20-per-hour minimum starting wage for employees and profit-sharing.
Appreciation of local cultural traditions, and preservation of historical and archaeological resources in an on-site museum.
Percentage of profits to go to a community fund for local projects, with local representation on the fund board; board members will serve on an advisory board to the resort’s management.
Construction of a community center/convention center that can double as a hurricane shelter.
Expanded community access to Caneel’s beaches and facilities.
Establishing an onsite trade school for culinary and hospitality management in cooperation with the University of the Virgin Islands.
In addition, the group says it will “pay a fair and lucrative royalty to the Virgin Islands National Park” and would not apply for Economic Development Commission tax reduction benefits. “We plan to pay our taxes to further support the U.S. Virgin Islands’ economy,” the group wrote on their public Facebook page.
Their page also presents a biography of O’Hayer, an entrepreneur and former V.I. charter boat captain, and the other members of the group: John Mackey, a co-founder of Whole Foods; Dan Buettner, the developer of Blue Zones Projects; and David Barry, the founder of Pursuit, a hospitality company.
The Caneel Purpose Group hopes to take over the current lease – known as the Retained Use Estate, or RUE – from CBI Acquisitions, which has controlled the property since 2004.
Time is of the essence. The Caneel Purpose Group has 15 months to work out a deal with CBIA’s managing partner Gary Engle and the National Park Service, as well as win approval from two Congressional committees.
Caneel Bay Resort has operated under a unique agreement with the National Park Service known as a Retained Use Estate. Laurance Rockefeller, who donated much of the land to create the park, deeded the property to the National Park Service in 1983. The Retained Use Estate agreement allowed the resort operator – currently CBIA – to manage the property but pay no rent with the understanding that when the agreement expires in October 2023, the entire property reverts to the federal government.
Federal legislation passed in 2010 allows the current leaseholder, CBIA, to negotiate to extend the lease for 40 years without it going out for public bid.
One of the burning questions asked at Tuesday night’s meeting was, “Why will Engle [of CBIA] negotiate with you?”
O’Hayer said, “The clock is ticking,” referring to the diminishing value of the RUE as the 2023 deadline approaches. O’Hayer said he has had one conversation with Engle during which Engle said, “If you can win the support of the community, the delegate to Congress, and the National Park Service, I’m willing to talk.”
“There are a lot of billionaires who want this property,” O’Hayer said.
At the meeting, St. John resident David DiGiacomo confirmed that there was lots of interest in acquiring the RUE. He said at least four “highly monied” people had contacted him about acquiring the lease, but “Mr. O’Hayer is the only one who’s come to St. John or stood in front of you.”
DiGiacomo is the attorney who initiated a lawsuit to compel CBIA and the Interior Department (which oversees the National Park Service) to further investigate reports of contamination from hazardous materials on the Caneel property.
Putting the lease out to bid in 2023 would lead to a process that could take at least two years to complete. With the possibility of an extensive clean-up of hazardous materials, the decision could take even longer, DiGiacomo said.
Right now, the Interior Department is headed by Deb Haaland, who takes a pro-environmentalist stance. In the future, however, the decision to award the lease could be made by a federal administration with very different views.
DiGiacomo also said that he had been contacted by reporters from ABC News following up on rumors that former President Donald Trump was hoping to acquire the RUE from Engle to make Caneel a Trump Resort.
“For the record, I’m still supporting an open bid process,” said DiGiacomo, “but you have to ask yourself if you want to take that risk.”
When St. John resident Pam Gaffin asked if Engle could be compelled to clean up the contamination on the property, DiGiacomo said the attorney general under the previous administration had indicated “he would not require Engle to clean up his mess after Engle had said he would sue the Rockefeller family.”
Gaffin then directed further questions to O’Hayer, challenging him to be more specific about the plans for the resort. “You come here with a nice, fuzzy, ill-defined concept and say, ‘Trust me, I’m a nice guy.’ I’m a bean-counter. I want to know the number of rooms and the prices.”
O’Hayer said the Group was not yet at the stage where they could be more specific. He said if the Caneel Purpose Group could take over the RUE and extend the lease soon, they could begin design work right away and begin construction next year. He said the total cost of the project could be as much as $200,000,000, including debt and equity.
In the meantime, he was focusing on acquiring community support and meeting with V.I. Delegate to Congress Stacey Plaskett within the next month. He asked the audience to go on the group’s Facebook page and use the form to tell her they support the ideas the group has proposed. “They’re your ideas,” he added.
Brummell Germain, who is serving as a community liaison for the group, asked the audience to keep an open mind. At the very least, their proposal “can set a precedent in terms of the ‘ask’ that we can make of other businesses that want to come and hold them to a higher standard.”
At the beginning of the meeting, O’Hayer indicated how he became interested in re-imagining Caneel Bay Resort. He said last October he was sailing around St. John and got off the boat at the Caneel Bay dock, hoping to walk the Lind Point Trail back to Cruz Bay. He stepped over some yellow tape at the edge of the beach to begin his walk and soon found himself surrounded by security guards who wanted to detain him for trespassing.
After that incident, “I started investigating,” he said. “Everyone said it was a fait accompli that Gary [Engle] would get the lease. I started asking, ‘What is the community looking for?’ We listened, and we came back.”
O’Hayer said he has launched more than 40 businesses. “ I would never do a business in a community that says, ‘We don’t want this.’ If the community wants to make Caneel Bay into a park without a resort, I’d say, ‘How can I help?’”