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HomeNewsArchivesEXTENSION OF VICB'S IDC BENEFITS UNKNOWN

EXTENSION OF VICB'S IDC BENEFITS UNKNOWN

Though many asked, it remained unclear Thursday if the V.I. Community Bank's Industrial Development Commission tax breaks will extend to its new holdings when its local buyout of Chase Manhattan Corp. is complete.
And despite rampant curiosity and speculation about VICB's benefits, which took effect Jan. 1, 1995, and expire Dec. 31, 2004, it seems that question may not be answered for some time.
Frandelle Gerard, acting Industrial Development Commission executive director, said Thursday no determination could be made since the deal between Jeffrey Prosser's VICB and Chase has not been finalized.
The IDC also has not received any documents regarding the buyout, she said.
"I can't really say what will happen," Gerard said. "I know the commission will probably want to review whatever documents there are."
When IDC beneficiaries make new acquisitions, the extension of benefits is determined on a "case-by-case" basis, depending on the beneficiary's agreement and the type of acquisition, she said.
A statement released by VICB Wednesday said the deal should close "sometime this year, pending approval from regulatory authorities."
VICB announced Wednesday it reached an agreement to purchase all Chase branches in the U.S. and British Virgin Islands as well as Chase operations in Barbados. The agreement also includes Chase Trade, a Foreign Sales Corporation (FSC) management company.
Chase's Virgin Islands operations include nine branches and 15 ATMs on St. Thomas, St. Croix and St. John in the U.S. Virgin Islands and Tortola in the B.V.I.
Bank operations included in the deal employ 280 people. The assets purchased include deposits of more than $500 million, consumer loans of $300 million and commercial loans of approximately $37 million.
V.I. Community Bank operates two branches on St. Croix and is the only bank in the territory with IDC benefits.
Sen. Lorraine Berry, who chairs the Senate Committee on Finance, wrote to Gerard Thursday asking if VICB's IDC benefits would be automatically extended to cover the Chase assets.
Under its IDC benefits, VICB is exempted from paying 100 percent of its property taxes, gross receipts taxes and excise taxes on raw materials, equipment and machinery, and 90 percent of income taxes.
VICB was also granted a dividend and interest withholding tax exemptions.
Under the benefit agreement, VICB had to invest $3 million in the territory and employ at least 47 employees, 80 percent of whom had to be V.I. residents.
The agreement's special conditions require VICB to provide venture capital, advice and support to local businesses, work with the Small Business Development Administration and other programs designed to assist locally owned businesses, and establish a corporate funded "Employee Stock Ownership Plan."
The special conditions also obligate VICB to make scholarship contributions of $5,000 a year for four years per Virgin Islands student majoring in finance, and create internships for college and high school students.

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