The Economic Development Commission’s Board heard testimony from a new applicant anticipating operating the former Sugar Bay Resort property on St. Thomas and held a compliance meeting for STR Management LLC via a virtual meeting on Zoom Tuesday.
Attorney Adriane Dudley, representing DV USVI Investment LLLP, said that the company is seeking tax incentives on St. Thomas to operate as a Category III Hotel/Guesthouse.
“This triple L-P is planning to reopen what’s been known as the old Sugar Bay Resort. This will be a magnificent property under the Hilton brand,” said Dudley.
The property will have 300 rooms on its 30 acres, and according to Dudley, it is anticipated to open in the first or second quarter of 2026. $20 million was invested to purchase the property and the investors will have invested $62 million more for the construction of the resort. Dudley also added that the hotel will employ 150 persons at the time of opening, and will increase to 175 in the first quarter of 2027.
DV USVI Investment LLLP is seeking a 90% exemption on income tax, a 100% exemption on gross receipts tax, a 1% exemption on excise tax, a dividend withholding tax exemption, an interest withholding tax exemption, a 100% exemption on real property tax, and a 20% customs duty exemption.
“We believe that this project will contribute significantly to the Virgin Islands tourist industry as well as the Virgin Islands economy,” said Dudley.
After hearing from DV USVI, the EDC then held a compliance meeting for STR Management, LLC, a company found to be in violation of compliance orders. According to Joy Penn, senior compliance officer for EDC, STR Management LLC applied for tax incentives on May 22, 2012.
“These incentives were approved by the then-governor of the U.S. Virgin Islands, John P. DeJongh, Jr., on December 21, 2012,” said Penn.
After, former EDC Chair Albert Bryan Jr. approved the certificate of tax incentives in May 2013. In September 2024, a compliance review for STR Management was completed covering the period from January 2015 to December 2022. The review found that STR Management failed to meet the charitable contribution benefits, did not provide documentation to comply with paid medical insurance, life insurance, local insurance, retirement plans, and paid vacation, sick, and holiday time, among other items.
The board immediately went into executive session to discuss the matter. After, the board concluded that the company failed to meet certain compliance requirements and unanimously voted that STR Management:
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Pay $11,000 to the workforce development and or public educational projects, enterprise zone community redevelopment and revitalization projects, or community-based organizations within 30 days of the board’s decision.
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Provide the names of employees who were not covered after medical insurance eligibility, pay a $250 bonus to each eligible employee, and provide proof of payment.
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Provide names of eligible employees not covered after their 60-day life insurance eligibility period, pay a $250 bonus to each employee, and provide proof of payment.
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Provide the computation used to determine their 3% employer contribution for retirement plans to eligible employees, provide payment to eligible employees, and provide proof of payment.
Additionally, STR Management was forgiven by the EDC Board for $13,229.08 in penalties for failure to file the certificate of existence in good standing for the years 2016-2020. Moreover, STR Management was found to be in compliance with the following matters:
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Paid vacations, sick leave, and holidays
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Management training program, career development, and budget
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Contractors to purchase local insurance
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Local procurement and eligible supplier program
The EDC Board also voted to refer the compliance matter regarding source income to the Internal Revenue Department.
Board members Gary Malloy, Jose Penn, Positive T.A. Nelson, Anise Hodge, and Kevin Rodriguez were present.
