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NISSMAN TOUTS EDC TIES TO SALT RIVER ATTRACTION

Jan. 20, 2004 – U.S. Attorney David M. Nissman lured a couple dozen or so Economic Development Commission beneficiaries and their representatives to a luncheon meeting on Tuesday by promising to discuss "Economic development and economic crime." And he did so.
But he then used the rest of his time as guest speaker to showcase a project near to his heart that he hopes some of those beneficiaries will see the value in and support.
The project is the development of a cultural attraction at St. Croix's Salt River Bay National Historical Park and Ecological Preserve. According to Nissman, it could help to establish a strategic value for the Virgin Islands in the eyes of federal officials, giving them reason to continue looking kindly upon the EDC benefits program.
The program, aimed at enticing business investment in the Virgin Islands, initially gives qualifying investors 90 percent breaks on taxes.
Speaking at a V.I. Bar Association luncheon at Palms Court Harborview Hotel on St. Thomas, Nissman drew a picture for the investors of "boatloads of tourists" arriving at the historic site on St. Croix where Columbus in 1493 first made landfall in the Caribbean.
The site has been home to numerous civilizations, including indigenous Amerindians who were living by Salt River Bay when Columbus arrived. There followed Dutch and English settlements, Nissman noted. "Imagine walking into the park and taking a walk through history — each period represented by a street or village," he said.
Nissman, who as U.S. attorney for the territory represents the National Park Service in legal matters, envisions dramatic presentations written, directed and performed by local artists. He feels the project could make local community members stakeholders in the territory's tourism industry with little or no financial investment.
His dream is about to take a big leap forward when the Virgin Islands National Park closes on the acquisition of 8.5 acres of land and a house at Salt River in a couple of weeks.
Thanks to the efforts of Delegate Donna M. Christensen, he said, Congress recently approved $2.2 million for the acquisition.
Nissman also envisions a deal between the federal and the V.I. governments that would involve the swap of five acres of land the local government owns at Salt River in return for the long-term lease of V.I. National Park land on St. John to be used for a new public school that would replace Julius E. Sprauve School and give the island its own high school. (See "Land swap deal for school makes headway".)
Going beyond money
EDC beneficiaries are required as part of their benefits packages to make donations to local charitable and educational causes. But Nissman sees these investors as having a lot more to offer the local community. "You've all created financial empires," he said specifically of the financial management companies that have found a home in the Virgin Islands EDC program. "You are 'can do' people."
With some "enlightened self-interest," Nissman believes the beneficiaries could be key to getting young Virgin Islanders to think more in terms of being employers instead of employees.
"Go into the schools. Meet the kids … Teach entrepreneurism," he said.
Nissman also sees an opportunity for a partnership between the beneficiaries and the government, with the business people lending their "expertise" to public officials.
Yet another initiative that Nissman envisions as giving "strategic value" to the Virgin Islands federally would be the creation of regional homeland security training center in the territory.
Keeping the benefits
In order for any of these dreams to come true, the EDC program has to continue. Nissman said federal officials want to see it work, with the possible end being financial independence for the Virgin Islands. And while he doesn't think the program is "in trouble," he said, "if it goes amok," it could be.
"Congress has given us a powerful and useful economic development tool," but one that has conditions, he pointed out. One of the stickiest and worst defined is that beneficiaries must be bona fide residents of the Virgin Islands.
Nissman made it clear he was not at the luncheon to answer "what if" questions about residency or any other conditions of benefits. He did offer a definition, however: "What would an objective stranger conclude from the totality of the circumstances? Do your kids go to school here? Do you vote here?"
He said "trouble starts" when a company is set up to function as a "pass-through" for companies elsewhere.
Nissman said he had concerns about changes made three years ago when what had been the Industrial Development Commission became the Economic Development Commission. The IDC had focused primarily on attracting manufacturing and industrial enterprises to the territory. Specifically, Nissman said, he was concerned about the financial services companies.
After some soul searching, he decided that "it was not my job to question the law. It was my job to enforce the law." Further, he realized that "it could be a good thing."
But he noted that enforcement efforts are aimed not at the program but at individuals who are not using it as intended.
"You don't have to worry about it if you are in compliance with the law," he said of the benefits program. But "if we don't keep it from being abused, we will lose it."

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