The hurricane-demolished Hibiscus Beach Hotel on St. Croix was purchased in 2018 by members of the Hamed family who petitioned the V.I. Economic Development Authority Thursday for Category III tax benefits to help with a five-year development plan.
Appearing before the VIEDA commission via Zoom, Waleed Hamed, speaking on behalf of his brothers, Waheed, Mufeed and Hisham, presented the plans and timeline for building a boutique hotel on the site of the hotel on the picturesque north shore beach.
Situated on four acres, the Hameds plan to increase the size and number of rooms and include a restaurant, bar, gift shop, pool, fitness center and meeting center. The family is investing $4.5 million and has already spent $200,000 removing destroyed buildings, abandoned vehicles and debris and developing engineering designs, Hamed said.
Hamed said the family grew up in the Hibiscus neighborhood and patronized the hotel and restaurant. The family has been in business for 60 years in the Virgin Islands, he added.
“We will impact the St. Croix economy. We remain committed to the community and to our project,” he said.
Upon receiving EDA benefits and permits, the next six weeks will see demolition and phase two construction in the same footprint. The existing 46 rooms will be enlarged and eventually, 80 rooms will be built — “a complete revamping of the whole structure.”
At some point in the second or third phase, 10 to 20 employees will be hired, as needed, Hamed said.
The first quarter of 2024 is the anticipated opening of the hotel, he told the commission. The restaurant will be the last to be constructed, and until it is finished, food trucks will serve the guests.
“It’s not going to take five years. It’s just a cushion,” Hamed said while pointing out that no one predicted COVID, the war in Ukraine and inflation that have hindered businesses.
After a few questions and comments from the commissioners, the applicants were told they would receive the approval or denial at a later date.
There were two more applications before VIEDA from existing beneficiaries who requested a reduction in the number of employees required to retain benefits. Both companies cited a loss of business over the last few years.
CREF3 USVI Hotel Owner, Inc. f/n/a DiamondRock Hotel Owner, Inc. was originally required to employ 415 people at Frenchman’s Reef in 2019. Speaking for the hotel, Joe Gould said they expect to reopen in 2023, but until the business rebounds — currently, they are experiencing only 30-50 percent occupancy — they can’t sustain 415 staff members.
During an executive session, the commissioners voted to require Frenchman’s Reef to employ 150 people from the first of 2023 to June 2023 when the requirement increases to 225 employees and then 300 staff by September. The VIEDA requires the full employment of 415 people by December 2023.
Salt Pond Holdings, LLC, (“Salt Pond”), an approved beneficiary, is a designated service business that provides banking services, stocks and securities trading, and financing businesses. Bill Erby, speaking for the company, requested reducing the number of required employees from five to two due to a decrease in business.
During an executive session, commissioners approved Salt Pond Holdings’ request to reduce the number of employees but the company is expected to comply with all of the other requirements.
V.I. Economic Development Bank also met Thursday with the same commissioners and staff and discussed several loan applications, including $30,000 for Oxy Max LLC. VIEDB approved raising the loan approval amount for the VIEDB credit committee from $50,000 to $100,000.
The V.I. Economic Development Commission then met and specified tuition refund policies for beneficiaries Capture V.I. and Octavia Consulting Group, LLC.
Attending the virtual meetings were: Kevin Rodriguez, chairman, Jose Penn, Phil Payne, Positive T.A. Nelson and Gary Molloy.