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Port Authority Discusses Ways to Raise Money

Feb. 16, 2005 – The V.I. Port Authority continues to operate at a loss, VIPA board members were told Wednesday during their monthly meeting.
Judith James, acting administrator of administration and finance, said the authority had a total operating loss of $1.5 million as of November 2004 compared to a $476,000 loss for November of 2003. The St. Croix aviation unit showed an operating loss of $1.1 million, while the St. Thomas aviation unit had a total operating loss of $618,000.
Board Member Leslie Milliner asked whether the board should revisit its decision to not increase the airport landing fees. The Port Authority had decided to keep its landing fees low in an effort to encourage more flight travel to the territory, particularly on St. Croix.
"We're keeping these fees low so that we can bring people to the island to spend money," Milliner said, adding that the board should sit down with the business community to see whether they would subsidize part of the landing fees to keep the rates low, because they were benefiting from the low fees.
Board Chairman Robert O'Connor said the authority had looked into that previously but was not successful in getting the business community to subsidize the cost of the landing fees.
"It's going to come home to haunt us later," O'Connor said, unless the number of flights coming to the territory is increased. He added with Delta scheduled to resume flight operations from St. Croix on March 5 that might help the situation.
Milliner said, "We want the business community to know that the Port Authority does not have any intention of increasing the rates, but they should be thinking about subsidizing some of the costs in the future."
The board also discussed whether they should raise the tariff for rental spaces at the airports because of the 65 percent increase in utility costs. Currently, office spaces on St. Thomas are $43 per square foot, while they cost $35 per square foot on St. Croix. The counter space costs $90 per square foot on St. Thomas, while they cost $50 per square foot on St. Croix. This is to encourage more economic activity on St. Croix and due to limited space at the Cyril E. King Airport on St. Thomas. Utility costs are factored in with the rental fees and are not assessed separately.
The board decided to discuss the matter again after a review of the fees in March.
In other action, the VIPA board voted unanimously to approve a rental lease for Delta Airlines on St. Croix for both office and counter space at $35 and $50 per square foot, respectively.
The board also approved a lease for Fernando Trucking for a vacant lot at the Crown Bay Sandfill to operate a shipping agency for cargo and freight at $1.50 per square foot for 3,750 square feet of land or $6,000 annually.
Acting Attorney General and board member Alva Swan commented on the fee, asking whether it was not too cheap.
VIPA Executive Director Darlin Brin said that was the going rate for renting land in the Sub Base area. Brin said the company's owner would construct a building on the land, which will be VIPA's property once the lease is expired, so it was not a loss.
The lease was approved 4-1 with Milliner, O'Connor, Hector Peguero and James Rodgers voting for the lease. Swan voted against it. Board members Wayne Callwood and Dean Plaskett were absent. Board member Pamela Richards, who was at a hearing of the Senate Economic Development Committee, was excused.
The board also unanimously voted to re-elect its current board officers. O'Connor will continue serving as chairman of the board, with Rodgers as vice chairman. Peguero will continue serving as the board's secretary.
The board briefly discussed several capital projects in progress before going into executive session to discuss the selection of the bid for the dredging of the Ann E. Abramson Pier in St. Croix. The bid was awarded to V.I. Cement Inc.
Brin said the Planning and Natural Resources Department have decided to waive the Coastal Zoning Management Permits for the project but VIPA still has to get some water quality certificates before the dredging can begin.
Capital projects now in progress for VIPA include: the Red Hook Terminal Project, the Crown Bay Project and the Enighed Pond Project.
"For the most part, the [Enighed Project] is complete," Brin told the board. He added the hardest part of the project was the required planting of mangroves, which they are still working on at this point.
Brin said they're hoping to have the Crown Bay project completed for the start of the 2006 cruise season, and work has begun on the Red Hook Terminal Project.
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