June 12, 2002 – The St. Thomas-St. John Chamber of Commerce on Wednesday poked pins in the trial balloon launched by Attorney General Iver Stridiron at the last Port Authority board meeting, where VIPA's executive director, Gordon Finch, said two cruise lines "have not abandoned their position" on financing the development of new Crown Bay berthing and shopping facilities.
At the May 30 VIPA meeting, which Stridiron chaired in the absence of Tourism Commissioner Pamela Richards, the attorney general said he would like to see revitalization of earlier commitments by Carnival Corp. and Royal Caribbean Cruises Ltd. to fund the port development. He cited "economic conditions in the Virgin Islands, particularly on St Croix," as his reason.
In a release distributed Wednesday, Cassan Pancham, Chamber of Commerce president, stated that Stridiron "is promoting a proposal that makes no economic sense for the Virgin Islands."
The chamber release noted that Gov. Charles W. Turnbull in March "ordered VIPA to terminate" its agreement with the cruise lines, after considering "the financial impact this agreement would have on the Virgin Islands."
The governor, while attending a cruise industry conference in Miami Beach, announced that he would "instruct" VIPA to terminate its letter of agreement signed last year with the two cruise lines and to work together with The West Indian Co. in developing Crown Bay without outside funding and without giving up local control of berthing.
Turnbull's action was in part a response to opposition to the cruise lines deal raised by WICO, the Chamber of Commerce and others concerned about a new Crown Bay shopping center taking tourist business away from Charlotte Amalie and Havensight.
"Turnbull acted in the best interest of the Virgin Islands," the chamber release stated, but the VIPA board has disregarded his "directive to work on a joint venture with The West Indian Co. and opted instead to develop the project." And, it said, Stridiron "is proposing once again a deal with the cruise lines, which is harmful to the Virgin Islands."
Stridiron told the Source last Thursday that his references at the board meeting to the cruise lines coming back into the picture "was just a trial balloon." Commenting at a ceremony dedicating a memorial to Turnbull, retired judge Verne Hodge and former senator Elmo Roebuck at Charlotte Amalie High School, he said he was not personally going to push the idea any further and that it would be up to the governor to decide which direction to go.
He also said Turnbull would be traveling to Miami in July to meet with cruise industry executives.
Stridiron has not made such statements in a public forum, however.
Under the letter of intent signed last summer, in return for jointly investing $31 million to expand the dock and develop a shopping complex, the cruise lines would be exempted from paying 75 percent of V.I. passenger fees and port tariffs for the first 20 years of the 30-year agreement and 25 percent for the remaining 10 years.
Pancham said the chamber estimates that over the 30 years of the agreement, this loss of port fees to the V.I. government "could easily surpass $100 million, while resulting in a loss to WICO and GERS of an estimated $118 million minimum over the same period."
WICO owns the dock in Long Bay where most cruise ships calling at St. Thomas now tie up. The V.I. government owns WICO. GERS — the Government Employees Retirement System — owns the Havensight Mall adjacent to the WICO docks. WICO manages the mall for GERS.
"There are alternative ways to finance a $15 million investment in a new dock which are financially sound," Pancham said. Indeed, the VIPA board had decided earlier this year to proceed on its own with funding the project through a bond issue. But when Finch said at the May 30 meeting that the cruise lines were still interested in putting up the money, Stridiron said if the board could be assured of such private financial backing, it could divert some of the public funding earlier identified for Crown Bay to St. Croix instead.
St. Croix's economic health, which never recovered fully after Hurricane Hugo 13 years ago, recently took a turn for the worse with the announcement by two cruise lines — one of them Carnival — that they are taking the island off their itineraries. A Carnival executive cited crime as the reason its two ships were leaving.
Pancham said Wednesday, "If VIPA develops Crown Bay unilaterally without entering into an operating agreement with WICO, the U.S. Virgin Islands will essentially lose effective control over the port of Charlotte Amalie" at both the WICO and Crown Bay docks, along with "the ability to negotiate with the cruise lines from a position of strength."
And if that happens, the various cruise lines in addition to Carnival and Royal Caribbean that call in the territory "can easily play VIPA and WICO off [each other] to renegotiate wharfage, usage and tonnage fees, resulting in the loss of V.I. government revenues," Pancham added.
If the Port Authority "follows the governor's directive and works jointly with the West Indian Company, funding for St. Croix's capital improvement projects would not be affected," the release stated.

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