Government Signs Water Island Hotel Lease

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Gov. John deJongh Jr. and Stephen Evans-Freke, managing partner of Water Island Development Company, sign a lease agreement Wednesday morning that will facilitate the development of a boutique resort on Water Island. (Government House photo)Gov. John deJongh Jr. approved a lease agreement to the Water Island Development Company to facilitate the redevelopment of the former Water Island Hotel property as a boutique resort.

The lease was signed Wednesday at a ceremony at Government House on St. Thomas. (The executive summary of the development plan can be seen here.)

The Water Island Development Company was selected through an Expression of Interest issued by the government in September 2013.

“Our interest in attracting a developer of a boutique resort was to achieve an economic activity on Water Island that would be consistent with the current community," deJongh said at Wednesday’s signing ceremony. "It would supplement the product diversification and re-branding that we are executing to broaden our tourism offerings while providing permanent jobs and creating business opportunities."

DeJongh said the previous hotel on the island, Sea Cliff Hotel, was built in 1953 as the Water Isle Hotel and destroyed in 1989 as a consequence of Hurricane Hugo. Since that time, there has been no meaningful economic activity on Water Island, he said.

The Expression of Interest process was led by the Department of Property and Procurement with input from the V.I. Department of Justice. The government engaged REVPAR International, a hospitality advisor and asset management firm, in 2012 to assess the viability of lodging development on Water Island. On November 29, 2012, after conducting a market study and financial analysis on the feasibility of the redevelopment of a hotel and marina on Water Island, REVPAR issued its assessment confirming that such a project was indeed feasible.

Property and Procurement Commissioner Lynn Millin Maduro described the proposal process.

“The EOI resulted in proposals from three developers: LAURENS GmbH, WIDC and RED Legacy, LLC. After reviewing the proposed submissions, the evaluation committee … along with REVPAR in an advisory role conducted two rounds of oral presentations to select the developer, in this instance WIDC.”

The evaluation committee was comprised of key stakeholders including the Office of the Governor, Department of Tourism, Department of Property and Procurement, Virgin Islands Economic Development Authority, and the U.S.V.I. Hotel and Tourism Association.

According to the news release announcing the signing, WIDC also has proposed constructing residential dwellings and villas in conjunction with a community center and commissary, to make the overall development more attractive to creating economic redevelopment on the island. While the government agrees that this will foster economic growth, the government as a general policy only leases land for business and commercial activity and not for residential development. For this reason, the governor wrote the Department of Interior for approval to offer certain parcels for residential development as part of the hotel project development.

According to Government House, Wednesday’s event marked the second time in as many weeks that deJongh facilitated the development of new hotel properties in the Virgin Islands. A week earlier, deJongh and developers introduced plans for the development of an upscale hotel resort at the Port of Mandahl on St. Thomas, marking the first time that a new hotel would be developed on the island in more than two decades.

1 COMMENT

  1. I read this and wondered how Water Island residents felt about the rebuilding of the resort that was destroyed in 1989? Things have changed for WI in the 25 years since the hotel was destroyed. Will they welcome such a project with open arms?

    Whatever happened to public hearings prior to the actual signing of these leases to see if these types of projects are wanted by the communities and infrastructure they will impact?

    At least, it’s not a maga marina and hotel but with WI being a small, tight knit community, it might have been nice to get their input considering that many make their livilhoods thru vacation villa rentals which this project will certainly impact.

    It will be interesting to see if this project is welcomed by Water Island residents, unlike the community protests over Coral Bay’s Summer’s End Mega Marina Project and the ill concieved Mandahl Bay Mega Resort and Marina project whose principals,Transcontinental Realty Investors (TCI) have been characterized as having:

    ” the ability to create the illusion of success and prosperity that deceived the investing public with a self-portrait of ever-increasing profits, assets and net worth,” while being involved with “Bankruptcy fraud and Mortgage fraud for tens of millions of dollars along with having Multi-million dollar judgments including Foreclosures and Phony companies created to hide assets from creditors.”

    As a friend mentioned, just because there’s a slick ad in the Source, doesn’t make it so.

    They can spin it (Mandahl Bay and Coral Bay’s Summer’s End projects) however they like, but it is a disaster in the making unless WE stop it.
    It’s not a done deal. It has to get permitted and there will be much opposition.
    Of course, CZM seems to be allowing permits for anything and everything these days. Luckily, they still have to pass ACE, NOAA and EPA scrutiny as well as ours.

    Whatever happened to background checks??? Good Grief!
    Gov. Dejongh has been a very busy guy.
    Too bad he’s been too busy to fully investigate the type of entities he would have the VI partner with and allow to continue to degrade the natural environment while giving away millions of dollars for ill concieved projects that our communities do not want nor need.

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