Editor's note: An earlier version of this report incorrectly stated that the CZM permit must be approved by the governor.
July 25, 2002 – After years of politics, permit controversies, public meetings and some not so public, the Port Authority had its way Thursday as the Senate Planning and Environmental Planning Committee approved a major Coastal Zone Management permit for it to expand the pier at Crown Bay.
The committee's say-so is final. The permit does not need approval by the full Senate or the governor.
Thursday's hearing was no less contentious than earlier public forums in the last year on the Crown Bay expansion plans. A League of Women Voters official objected to the project, while George Dudley, owner of Lockhart Properties but appearing as a private citizen, and Lister Warrington, secretary of the St. Thomas Taxi Association, spoke in its favor. The president of the St. Thomas-St. John Chamber of Commerce supported expanding the pier but repeated the group's opposition to developing a retail center alongside it.
Although Gov. Charles W. Turnbull had "instructed" VIPA in March to partner with The West Indian Co. in undertaking both projects, the VIPA board voted in April to proceed on its own.
Last summer, VIPA entered into an agreement with two major cruise lines to develop Crown Bay, a deal that was met with loud opposition. Critics said it would in effect give control of the harbor to the cruise lines and take shopping customers away from downtown Charlotte Amalie and the Havensight mall by the WICO cruise ship dock.
On March 13, Turnbull announced from Florida., where he and VIPA and WICO officials were attending a cruise industry convention, that he would instruct the Port Authority to cancel its letter of intent with Royal Caribbean Cruises Ltd. and Carnival Corp. because "I believe it is important that the V.I. maintain full control of its harbor and harbor development."
The governor further said then that he would instruct VIPA and WICO to "proceed quickly" to undertake the work needed "to accommodate the growing needs of the cruise lines for additional berths in the Port of Charlotte Amalie."
At a January Senate hearing on the cruise lines agreement, Sen. Carlton Dowe and other lawmakers said they would hold up the CZM permit if the project were not developed locally. Dowe voiced support Thursday for VIPA's plan to proceed independently.
Appearing before the committee were Gordon Finch, VIPA executive director; Erva Denham, LWV president; Cassan Pancham, Chamber of Commerce president; Julita De Leon, CZM chief counsel; Janice Hodge, CZM director; Alton A. Adams Jr., VIPA consultant; and Pamela Richards, Tourism commissioner and VIPA board chair.
Environmental study a bone of contention
Denham said the League found several problems with the dock expansion permit, chiefly the effect the expansion would have on the community without proper infrastructure in place. She criticized the Environmental Assessment Report prepared by Adams as part of the CZM application, describing it as "shockingly poor" with "missing information, omitted sections" and poor organization.
She said the report failed to answer questions the League had submitted to the CZM about the pier expansion's impact on public services and utilities, the handling of cruise ship waste and the impact of potentially 15,000 to 18,000 people arriving on the island in a day (with three ships at the WICO dock and two at Crown Bay). She said it is more important to concentrate on the quality of experience visitors have than on increasing the number of visitors.
Adams criticized Denham's criticism of his Environmental Assessment Report. Noting that he has been a supporter of the LWV for years, he said its current leadership does not impress him and Thursday's presentation "has no meaning, and that is unfortunate." Terming the organization's objections an "indictment," he added, "I will not have my reputation impugned. I won't permit them or anyone else" to do that.
Several senators jumped to Adams' defense, citing his "impeccable reputation" and his years of work on the CZM Commission.
In his statement, Adams said "several" Main Street merchants are applying to VIPA for retail space in the Crown Bay complex.
Denham asked the Legislature to delay ratification of the permit until a study could be done by a reputable off-island firm of the island's capacity to accommodate the huge number of cruise ship visitors that VIPA anticipates.
Much discussion not about permit for pier
Meantime, the League of Women Voters has appealed to the Board of Land Use Appeals the earlier CZM approval for a retail development in Crown Bay adjacent to the dock. "Because of a 1989 Memorandum of Understanding between CZM and VIPA, the Port Authority was not required to submit a major permit application for the commercial development at Crown Bay. Since the MOU contravenes the CZM act, the CZM approval is invalid," the appeal states.
Jose Penn, an appeals board member, said no date has been set for the board’s next meeting and he has not yet seen the LWV appeal.
Sen. Lorraine Berry asked Finch if the governor approves of VIPA being the sole developer of the retail complex planned for land adjacent to the dock. Finch said he had received no feedback from the governor on that.
Warrington pleaded with the senators to "see the potential of the development: the jobs, lower unemployment, less crime and business opportunities for entrepreneurs." Plans call for about 5,000 square feet of retail space for small local businesses.
Pancham reiterated the chamber's concerns that the commercial development will take business away from downtown as well as from Havensight Mall, which is owned by the Government Employees Retirement System. He said the effect in Havensight would be financial losses to GERS. WICO officials have similarly warned against the retail project.
Further, Pancham said, if VIPA develops Crown Bay unilaterally without WICO, the government will "lose effective control over the port of Charlotte Amalie and the ability to negotiate with the cruise lines from a position of strength."
The upshot is, Pancham said, "The cruise lines should not be given the opportunity to have WICO and VIPA bid against each other for business."
The chamber supports expanding the Crown Bay pier. "The government, the private sector and the cruise industry are in unanimous agreement that the dock extension is of vital importance to the U.S.V.I. to maintain its competitive position as an important cruise port," Pancham said. But he recommended that "this committee stay action on the CZM permit and require the various agencies and interest groups to convene and work out a solution that is mutually beneficial."
Dudley, attorney for the cruise lines, essentially repeated his remarks at a Senate hearing earlier this year: "I would look like a babbling idiot if I thought this development would hurt downtown," he said of the pier expansion
His family owns Lockhart Caribbean Corp., whose holdings include the renovated Grand Galleria complex and other downtown properties. Most of the firm's tenants operate tourist-oriented businesses. "We have $4 million invested in the east end of Main Street," Dudley said.
Sen. Donald "Ducks" Cole, the committee chair, interrupted the proceedings several times to point out that the hearing was about the dock expansion only, not the proposed retail development.
Finch also reiterated his often-stated position: If the V.I. doesn't expand the docking facilities at Crown Bay, "we will no longer be in the ball game." He produced a list of 35 mega-ships on order to be built in the next three years. "We have to accommodate these vessels or we will not be competitive
," he stressed.
VIPA's goal is to promote cruise tourism and stay in the market, said, and the authority will go to the bond market to raise the more than $30 million needed for the pier expansion and commercial development projects.
VIPA says WICO will continue to control berthing
Richards said Crown Bay would continue to be a supplemental cruise ship dock, with WICO remaining the principal berthing site.
And Finch was adamant about the berthing arrangements. "WICO will continue to determine berthing," he said. " I guarantee you VIPA has no subterfuge of undermining WICO's position with the cruise lines. We have no oral or written agreement with the cruise lines. WICO is the premier dock and will always be the first location to stop."
He said the Virgin Islands has gone from being the "No. 1 cruise ship destination in the world" to No. 1 in the Eastern Caribbean — "not even the whole Caribbean." Cozumel has moved rapidly forward in that market, he said.
"The Virgin Islands is going to have to make a decision to stay in the tourism game in the Caribbean," Finch said. "It is extremely clear. Since Hurricane Hugo in 1989, we have consistently lost our market share. In 1989 we were No 1. Now in 2002, I believe we are No. 13."
He said he was "amazed at the misinformation I've heard here today. The Crown Bay development will be 56,000 square feet with about 32,000 square feet of retail," which he said was less than one-quarter the size of Havensight.
Finch stressed two points:
– The two VIPA projects, dock and retail center, are "married" in terms of skills, costs and time. "We can go to the market for a maximum guaranteed price to get the best possible deal with both of them," he said.
The CZM application before the senators, he noted, was for the dock only. "If the board said tomorrow to separate them, we would," he said. "Everyone wants the dock to go forward. But I don't foresee that happening."
– VIPA is not competing with WICO. "We are looking at a facility to start off with 200,000 passengers, growing eventually to 600,000, compared to the 1.7 million who now use WICO," he said. "In terms of square footage, we are not a competitor. I want the public to get it out of their minds that what we are doing here is a torpedo that's going to sink Havensight and sink the GERS."
Finch said his relationship with WICO's president, Edward E. Thomas Sr., is a good working one. "When I was taking my walk the other day," he related, "Thomas came up to me and told me about WICO's security measures. He offered to share them with me, and this morning I had them on my desk."
While VIPA and WICO have been cast in competitive positions which can create friction, he said, the feelings are "personal."
Private dock permit returned to DPNR
In the only other matter before it Thursday, the committee voted to send back to the Planning and Natural Resources Department a minor CZM permit for Barbara J. Harris and heirs of the Israel Blumenberg family to rebuild a dock at Chocolate Hole on St. John. Senate legal counsel Yvonne Tharpes had said in an earlier hearing that the application was improperly signed. She was not present Thursday but had issued an opinion stating that the signatures were still not valid.
Sens. Cole and Dowe, who said they favor the permit, told Harris on Thursday that they were sorry but they couldn't go against Tharpes' opinion.
Committee members present for the hearing were Sens. Cole, Roosevelt David, Adlah "Foncie" Donstorg, Dowe and Celestino A. White Sr. Absent were Sens. Adelbert Bryan and Alicia "Chucky" Hansen. Sens. Lorraine Berry and David Jones, who are not committee members, also attended the hearing.
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