Home News Local news PFA LOOKING TO BUY KING'S ALLEY WALK FOR $2.7M

PFA LOOKING TO BUY KING'S ALLEY WALK FOR $2.7M

0

Sept. 22, 2003 – The Public Finance Authority, which became the owner of the King's Alley Hotel in downtown Christiansted two years ago literally by default, may soon acquire the adjacent shopping area known as King's Alley Walk as well.
The PFA board voted on Friday to release $2.5 million for renovation and restoration of the hotel, according to a release distributed on Monday. And, after what was described in the release as "extensive discussion," it also voted to authorize the authority's top official, Kenneth Mapp, "to proceed with negotiations for the acquisition of King's Alley Walk."
Further, the board ratified an offer to purchase the commercial property for $2.7 million from the Ingvoldstad Family Trust, which now owns it. According to the release, the offer includes a $200,000 at closing and $2.5 million over 10 years at 4 percent annual interest. "Final details of the sale will be brought back to the board for final approval," the release said.
The administration move toward acquiring hospitality industry properties is bucking the trend in many Caribbean island nations, where the move in recent years has been toward privatization of government-owned hotels and related enterprises.
King's Alley Walk currently has the following tenants: Caribbean Bracelet Co., Elegant Illusions (jewelry copies), Fort Christian Brew Pub, Hotheads (hats, clothing, accessories and toiletries), King's Alley Jewelers, King's Alley Marina Bar, New Image Foundation (a not-for-profit agency that conducts entrepreneurial training), Patrick's Watch and Time Center, Pleasant at King's Alley Walk (a restaurant) and Sunglass Hut. Two spaces are being renovated for new tenants scheduled to move in next month — Dr. Lourdes Neugart, a psychologist; and Lanio Architects, which now has offices in Frederiksted.
Mapp is director of finance and administration for the PFA. Its board by law is chaired by the governor and comprises in addition four other members — the Finance commissioner, the Office of Management and Budget director, and one private-sector member from each district. All board members were present on Friday, the release stated: Gov. Charles W. Turnbull, Finance Commissioner Bernice Turnbull, OMB's director, Ira Mills, and business representatives Paul Arnold of St. Croix and Roy D. Jackson of St. Thomas.
In an appearance before the Senate Finance Committee on Aug. 5 to present an overview of the PFA's Fiscal Year 2004 budget projections, Mapp said the authority had nearly completed redevelopment plans for the 33-room King's Alley Hotel, which it acquired in 2001 when a private developer defaulted on the only loan given from 1994 PFA bond issue proceeds set aside for ventures with the private sector.
As of Aug. 5, the PFA's investment in the hotel stood at more than $5.25 million, Mapp said, and the renovations were expected to cost another $2.5 million. However, he made no mention of plans to acquire King's Alley Walk.
He described the hotel investment as being "necessary not only to revitalize and reposition the King's Alley operation into a profitable position in the market but to give the authority the greatest opportunity to recover its investments, should we sell the property."
Mapp acknowledged some concern on the part of senators about the government getting into the hotel business but said that selling the hotel at that time would mean a financial loss. Also, he said, a management team would be contracted to operate the facility.
Two years earlier, soon after the King's Alley foreclosure, the PFA had been looking for another entity to take over management of the property. (See "WICO may manage foreclosed King's Alley".)
The Ingvoldstad Family Trust took the PFA to court in 2001 after the developer that had owned the hotel and leased the retail complex defaulted on the loan that the PFA had guaranteed. The company's lease, which the PFA assumed, runs until 2010 and the authority has been paying the Ingvoldstad trust more than $280,000 a year, according to Mapp.
For about $800,000 more than the lease payments will add up to by 2010, he said, the authority can buy the property. The purchase price reportedly represents a settlement of the lawsuit Ingvoldstad filed.
At the Aug. 5 hearing, Mapp estimated the authority's FY 2004 budget at $3.2 million, down from $3.8 million for the current fiscal year. The budget is funded by interest earned on bond proceeds, internal revenue matching funds and/or its other revenue streams.
Hovensa private activity bond sale ratified
At Friday's meeting, the PFA board also ratified the sale of nearly $74.2 million in private activity bonds to "assist Hovensa in financing continued improvements and expansion" of the giant oil refinery, the release stated.
It said the PFA board members recently toured the oil refinery and "specifically reviewed project developments that were financed through private activity bonds." They expressed "overall satisfaction with Hovensa's progress" and its "plans for continued growth and expansion."

Back Talk

Share your reaction to this news with other Source readers. Please include headline, your name, and the city and state/country or island where you reside.

Publisher's note : Like the St. Croix Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.

LEAVE A REPLY

Please enter your comment!
Please enter your name here