The cruise ship business was so good last year that the West Indian Co. Ltd. is about to pay a $1.5 million dividend to the government. That's $800,000 more than it ever paid in taxes as a privately owned company, before it became a quasi-governmental entity.
WICO president, CEO and board chairman Edward Thomas delivered the good news Tuesday at a meeting of the Public Finance Authority, the company shareholders.
Besides reporting on WICO's finances, Thomas gave the PFA an update on two proposed projects: the Carifest theme park and the redevelopment of what used to be Yacht Haven Hotel and Marina at Long Bay, near the cruise ship docks.
He also announced that WICO will be a prime sponsor of Carnival Village this year.
Long Bay Partners, better known as PRM (Peter R. Morris) Realty, currently holds an exclusive option with WICO for a mixed use development at the Long Bay site, Thomas said. WICO has 12 acres of landfill that it would like to combine with the adjoining property that PRM purchased last year.
"We're optimistic" that an agreement will be reached, Thomas said after the meeting. Both sides want to upgrade the existing marina. Discussions also include a retail center that would not compete with Havensight Mall next door, and an entertainment complex that Thomas said might mean a nightclub but is definitely not a precursor to a casino. Timeshare units and/or a hotel are also on the list of possibilities and Thomas said WICO is interested in increasing its cruise ship berthing facilities.
PRM's six-month exclusive option is up May 1, but Thomas said it can be extended as long as negotiations are still on track.
Carifest's lease with WICO also ends May 1, and Thomas said the WICO board has decided not to extend it again. The board already gave Carifest an extension from Dec. 31, the time by which it was supposed to have met about 15 conditions. Thomas declined to detail the lease provisions, but conceded they include the start of construction on the site, and payment of rent.
The Carifest project has been on the drawing board for more than 15 years; the lease at WICO dates to 1995. A call to the Carifest office on St. Thomas was not returned immediately Tuesday.
Thomas did not say how much WICO will contribute to Carnival Village but said its emphasis will be on beautifying it as "a cultural meeting place." The University of the Virgin Islands is sponsoring a program through which international scholars are coming from Africa and other places to research the Virgin Islands annual event, and, Thomas said, "my board was very specific that they wanted the village not to look like a shantytown."
Thomas told the PFA that it will receive its $1.5 million dividend from year 2000 profits by May 31. The payment outstrips past dividends, which Thomas listed as $500,000 for 1997, $1 million for 1998 and $500,000 for 1999.
Besides the dividend, WICO is required to pay a tax of 10 percent or $500,000, whichever is greater. That makes the company's payment to the government for 2000 a total of $2 million. In 1992, the last year for which a privately owned WICO paid taxes, the government collected just $1.2 million from the company, or $800,000 less, Thomas said. He cited the figures as proof against critics who complained that WICO was taken off the tax rolls when the government purchased it.
He attributed the upswing to a general improvement in tourism and particularly to an increase in cruise traffic.
While 1999's numbers were down 12 percent from 1998, cruise passenger arrivals in 2000 increased by 26 percent over 1999. Thomas reported 1,547,081 passengers came in 1998; 1,363,277 in 1999 and 1,719,827 in 2000.
Between increased bookings on existing ships and the addition of more ships, WICO is projecting a 16 percent increase in arrivals for next year.
In support of his report on the economic upswing, Thomas said the overall tax collection for the period of September to December 2000 was $12.4 million, compared with $6.8 million for the same months in 1999.
Gross receipts collections were $84.9 million in 1999 and $95.3 million in 2000; corporate income tax collections were $22.4 million in 1999 as opposed to $29.2 million in 2000; and the hotel room tax was $11.3 million in 1999 but $12.6 million in 2000.
Another bit of positive news from Thomas: the Government Employees Retirement System, for which WICO manages Havensight Mall, reported a 13.6 percent return on its investment there last year.
Gov. Charles W. Turnbull, who chaired the PFA meeting, complimented Thomas and said "WICO is a success story in the Virgin Islands, and we're very proud of it."
