Nov. 25, 2002 – Divi Carina Bay Resort has six months to complete a 50-room expansion of its hotel, according to a decision made by the Casino Control Commission on Monday.
That deadline, however, is impossible to meet, according to Bernie Burkholder, a director of Grapetree Shores Inc., which owns the resort, and president and chief executive of Treasure Bay Corp., the Mississippi-based parent company of Treasure Bay V.I. Corp, which leases and operates the casino.
"Six months is not realistic," Burkholder told the commission. "We will have to ask for a waiver."
Originally, Divi was to have completed the 50-room expansion the year after the commission approved its casino license, in 1998. But because of low hotel-occupancy rates on St. Croix, the panel has extended the deadline several times. On Monday, however, the members voted unanimously to require the construction to begin at once.
"Having a casino license is a privilege," commissioner member Imelda Dizon said. "Other businesses here would like to have one."
Saying that many of the planned new rooms would likely sit empty, Burkholder had written earlier to the commission asking that Grapetree Shores be allowed to take the money intended for the construction and use it instead to develop a marketing program to bring more tourists to St. Croix.
At Monday's meeting, however, he said he wanted to withdraw that request.
"We've always intended to build the 50 rooms, but we thought a program to bring more tourists to the island would make more sense" for the time being, Burkholder said. The options that Grapetree Shores officials explored for using the money, he said, included coaxing airlines to increase flights to St. Croix, reducing crime and improving roads.
"But it appears our views may not be shared by others in the community," he said, noting that Divi has received calls from local residents complaining about the expansion not going forward. And, he said, the airlines were unresponsive about committing to more flights.
The commission chair, Eileen Petersen, said she was impressed with the idea of exploring other investment options for the money. "But they have withdrawn the petition, and there's nothing for us to decide," she told her colleagues Monday.
Petersen pressed Burkholder for information about the level of off-island marketing being undertaken, noting that some members of the community, whom she did not name, have raised concerns about whether Divi's advertising and promotion are as aggressive off-island as on St. Croix.
Burkholder said the casino spends in excess of $750,000 in marketing — regionally, on the mainland and internationally. However, he said the management was surprised to find that most of the operation's revenues from the start have come from local gamblers.
Divi provides free bus transporation for local residents between the towns and the casino. This, coupled with the relatively small number of tourists gambling, has been a bone of contention for many locals, including some politicians. Michael Bornn criticized the busing practice during his gubernatorial campaign, and Sen. Norma Pickard-Samuel has been vocal about the number of locals that frequent the casino.
Yet, despite any criticism, Burkholder said, "I challenge any one of us to try and remove any of those people."
Divi Carina Bay Resort currently has 146 guest rooms and 26 villas. Grapetree Shores will have to obtain a Coastal Zone Management permit before work on the expansion can begin.
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