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VIports Partners Selected for P3 Development of Airports

Members of the V.I. Port Authority board meet on Tuesday to vote on a P3 developer for the territory’s airports. (Screenshot from Zoom meeting)

VIports Partners was approved as the V.I. Port Authority’s potential public-private partner for both the Cyril E. King and Henry E. Rohlsen airports on Tuesday during a special governing board meeting. VIPA Executive Director Carlton Dowe and the Evaluation Committee’s approved P3 recommendation authorized the executive director to enter into a transition agreement with VIports Partners, which officials said would take about nine months to finalize.

Kate Davis, procurement and contracts manager for the Port Authority, provided the staff’s summary on the P3 development that led to VIports Partners being selected as the recommended developer after review of their request for proposal.

“The purpose of the RFP was to receive proposals and select the firm that best meets the priorities identified by the authority and the U.S. Virgin Islands,” said Davis.

Those priorities include a firm that can provide the authority and the territory the best overall value during the development and operational phases of the airport P3, maximize short-term and long-term economic benefits to the territory, and create a terminal design for both St. Thomas and St. Croix that is: sustainable and resilient, embodies the U.S. Virgin Islands’ energy and cultural feel, is innovative and efficient, can be modified to meet changing requirements and standards, will meet projected passenger activity level and demands and will enhance the flexibility and efficiency of passenger processing and airfield operations.

The board identified VIports Partners as the best airport operator that will focus on customer service, passenger amenities, and retail offerings. They will design and redevelop the airports to satisfy minimum LEED Silver standards and building code requirements for resiliency, enhance passenger options by adding new routes, increase cargo activity at the airports, increase non-aeronautical revenues at both airports, perform Part 139 inspections as the agent of the Port Authority, ensure compliance with FAA requirements, negotiate future airline lease and use agreements as well as concession agreements with all airport tenants, increase the number and availability of passenger boarding bridges, partner with a developer and operator that places a high value on its human capital, and provide enhanced local business opportunities during the redevelopment and operational phases.

VIports Partners along with Vantage Airport Group Ltd., the Port Authority’s two top-ranked firms, both submitted compliant responses on Feb. 15, the deadline for the request for proposals.

“While both proposals received were exceptional and each had its own unique strengths and qualities, and they both understood the goals outlined by the authority in the RFP, the evaluation committee concluded that the values outlined by VIports Partners in its submitted proposal aligns the closest to those stated values of the authority and the U.S. Virgin Islands,” said Davis.

Both entities were scored on their design and construction plan, operational plan, business plan, environmental plan, and financial plan.

Before voting, board member Celestino White said that the decision made by the board is “a monumental and historic one.” He asked Davis how soon after a decision is made will the selected P3 entity be ready to move forward.

Davis responded that both VIPorts Partners and Vantage Airport Group Ltd. agreed to sign a transition agreement within 15 days and P3 agreements later this year.

White also asked about employee retention. Davis said that was one of the aspects that they imposed upon the proposers.

“VIports Partners have committed that they will retain all of our employees,” said Davis.

Port Authority senior staff attorney Vincent Frazer also acknowledged that existing airport leases will be secured until expired.

Regarding concerns around the privatization, Dowe said that the Port Authority “wanted to upgrade both facilities, both airports.” He added that “there is no exchange of the asset, which means the airports continue to remain under the ownership of the port and by virtue the government of the Virgin Islands.” Essentially, the facility is being leased to the private entity.

Dowe added that though the private partner will manage the airport, the board will still manage their assets at Lindbergh Bay Beach, Bournefield, and 400-plus acres on St. Croix.

According to Larry Belinsky, managing director of Frasca & Associates (P3 and financial advisor to the Port Authority), the transition period of implementing the partnership with Viports Partners will take nine months and after, the renovation of the airports will take approximately 48 months. Construction is slated to begin at the end of the second quarter of 2025.

Board member and Tourism Commissioner Joseph Boschulte expressed concern about “losing momentum” of revenue streams while the transition period takes place.

In a 6-1 vote, the board approved VIports Partners. Boschulte was the only dissenting vote.

In other news, the Port Authority unanimously renewed property insurance for $60 million.

Board members Boschulte, acting Attorney General Ian Clement, Derek Gabriel, Willard John, Kevin Rodriguez, Leona Smith, and Celestino White Sr. were present.

Timeline of activities surrounding P3 development:

  • Sept. 21, 2022 — The Port Authority board authorized the executive director to issue a request for qualifications (RFQ) inviting interested parties to submit proposals for a potential public-private partnership, referred to as Airport P3, for both the Cyril E. King Airport and the Henry E. Rohlsen Airport.

  • March 16, 2023 — The Port Authority received eight compliant statements of qualifications.

  • April 19, 2023 — The Port Authority board authorized the executive director to accept the Evaluation Committee’s recommended short-list of RFQ responders for the request for proposal phase. Only the four firms short-listed during the RFQ stage were invited to participate in the RFP phase.

  • June 29, 2023 — RFP No. 2023-RFP-0007 was released by the Port Authority in conjunction with their advisory team (financial and P3 advisor, Frasca & Associates, LLC (“Frasca”), its transaction legal advisor, Mayer Brown LLP (“Mayer Brown” or “Transaction Legal Advisor”), it’s technical advisors, Paslay Group (“Paslay” or the “Technical Advisor”) and Ricondo and Associates (“Ricondo”), Public Strategies Group (“PSG” or “Communications and Stakeholder Outreach”) and local counsel, Law Offices of Jennifer Jones and Law Office of Trudy Fenster, P.C. (each “Local Counsel”), and others (collectively, the “VIPA Advisors”)) to the four short-listed firms.

  • Feb. 15 — The deadline for the RFP was enacted at 4 p.m.

  • March 4 and March 5 — Technical advisors through the Paslay Group, Ricondo and Preston Beyer, the Port Authority’s director of engineering, briefed the evaluation committee on the technical portion of the proposals.

  • March 6 — The Evaluation Committee was briefed on the business, financial and form of offer portions of the proposal by Frasca & Associates and Mayer Brown. The financial and legal advisory team briefed the evaluators on the financial proposal submitted as well as the results of the best and final offer .

  • March 7 — The Evaluation Committee received oral presentations from both proposers.

  • March 8 — The Evaluation Committee reconvened to score the proposals. The Evaluation Committee concluded that the values outlined by VIports Partners in its submitted proposal align the closest to the values of the Port Authority and the U.S. Virgin Islands.

  • March 26 — The Port Authority board approved VIports Partners as the preferred proposer for the public-private partnership of the territory’s airports.

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