Sept. 16, 2008 — Citing the need for more economic-development opportunities on St. Croix, senators Monday approved $34.4 million in startup financing for a large-scale shrimp and tilapia farm, even though one Public Finance Authority official said the agency doesn't have that kind of money in its coffers.
The bill authorizes the PFA to loan the money to Crucian Holdings, which would in turn buy the land it needs for the farm, along with constructing its shrimp ponds and processing plant on more than 100 acres in Estate Diamond. The PFA has been trying to work with Crucian Holdings for the past few months and has not yet denied any requests for funding, Francis said during Monday's Rules and Judiciary Committee meeting. At this point, however, the authority lacks the "uncommitted resources" necessary to cover the loan, he said.
"The PFA can't commit the revenues of the Virgin Islands — that authorization would have to come from the Legislature, and those are for specific projects," Francis explained. "We don't just sit on any money that isn't committed. At the end of the day, a direct loan of $34.4 million for a startup venture is a significant monetary investment with substantial investment risk that exceeds the PFA's current capacity."
The bill also fails to pinpoint a specific funding source, Francis said. The money could be put up through a bond issue or through a "consortium of financial institutions" — i.e. banks — but that process includes finding out what the risks of the project are, and whether its financially viable, he said.
Francis' comments were echoed throughout the meeting by other aquaculture and agriculture experts, who said the project's success would allow the territory to tap into several booming niche markets, which in turn would rake in dollars for St. Croix. But that all depends on whether the company's business plan is sound and properly thought out, according to James Rakocy, a UVI aquaculture professor.
"There's not much of a history of successes of shrimp farms on the islands," Rakocy said. "Crucian Holdings says this is the best shrimp farming in the world — right here on St. Croix. But what about on Puerto Rico, where there's cheaper land and lower labor rates, but no functioning shrimp farms? What about Santo Domingo, where's there's really only one farm, and that functions on a much smaller scale?"
But company principals assured senators that they should start producing within two years, and would be able to market their products on the organic market.
"Gentlemen, you have the opportunity here to initiate a gem, a star — something that you could be proud of," said Addison Lawrence, a renowned shrimp-farming expert.
The company's proposal also manages to kill two birds with one stone — it creates more job opportunities and takes a big step toward boosting St. Croix's ailing economy, said Sen. Norman Jn Baptiste, the bill's sponsor.
"I make no apologies for my efforts, my desire, to promote economic development on St. Croix, and to advocate for sustainable growth and development for the island for the island of St. Croix and for the Virgin Islands. I don't believe that the bill before us is a perfect document, but this is the Legislature — we can make amendments."
Sens. Usie R. Richards and James A Weber III voted against the bill. Voting in favor were Sens. Carlton "Ital" Dowe, Carmen M. Wesselhoft, Celestino A. White Sr. and Alvin L. Williams.
Concerns voiced by attorneys and representatives of the territory's insurance agencies also failed to stop senators from passing a bill aiming, among other things, to lure specialized captive insurance and reinsurance companies to the territory with tax benefits. To strike a balance between the two groups, senators also passed an amendment that clears up some inconsistencies in the bill's language. The proposal is intended to increase competition in the industry and stimulate the economy, said captive insurance bill sponsor Sen. Louis P. Hill. (See "Insurers Would Get Incentives Under Senate Proposal.")
Senators also passed bills:
— calling for the Department of Education to allow for K-12 instruction on St. John and the government to construct, renovate or acquire a building for a school. The department is working with the university to collect various demographics that would help determine the configuration of the school — meaning whether it would mirror the size of other high schools in the territory or get built on a smaller scale with alternate forms of instruction, Education Commissioner LaVerne Terry said Monday;
— appropriating $100,000 to the Bureau of Economic Research to conduct a living-wage study on what residents need to earn, at a minimum, to cover basic living expenses such as rent or housing, food, child care, health care and transportation, among other things. Senators also passed an amendment changing the composition of a 15-member board that would advise BER on matters relating to the development of a living wage standard; and
— preventing employers from forcing their employees to participate in political or religious events.
All bills will be forwarded to the full Senate body for a final vote.
Present during Monday's meeting were Sens. Liston Davis, Dowe, Jn Baptiste, Shawn-Michael Malone, Terrence "Positive" Nelson, Richards, Weber, Wesselhoft, White and Williams.
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