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West Indian Co. Finally Abandons Carifest Project

May 2, 2006 – After nearly seven years, the West Indian Co. Ltd. has given up the Carifest ghost.
Edward D. Thomas, WICO president and chief executive officer, said at the company's annual meeting Monday, "Our company has terminated all negotiations with the Carifest Corp."
Instead of the cultural/amusement park that has been on the drawing board for decades, WICO has put out a request for proposals for design and construction of 100 middle- and upper-income residential dwellings.
Thomas said after the meeting, which were held at the offices of the Public Finance Authority in Frenchtown, that the land in Estate Thomas and Estate Liverpool close to the WICO facility earmarked for Carifest was "too valuable" to let it stand empty any longer. He said the residential project would be a public/private venture, partially financed and operated by WICO, which would also share the revenues. He said the bids went out March 7 and couldn't say who would ultimately be chosen to be the private-sector partner.
Thomas said Carifest "just couldn't get their financing together."
Despite having to drop the estimated $68 million project, Thomas said attractions are the very thing that draws the cruise ships to one particular destination over another.
"Cruise lines make money selling tours," Thomas said.
He noted that there's a place in the Caymans called Hell. He said it's a group of caves where tourists go so they can send a post card from Hell.
On St. Kitts, where there wasn't a lot to do, Thomas said, they built a train that goes through the cane fields.
Gov. Charles W. Turnbull, chairman of PFA (WICO's parent agency), said, "I've been on that train. The people run out from the villages to meet it."
With or without trains or cultural parks, at an average of $305 per person, St. Thomas and St. John still reap more cruise ship tourist dollars per capita than any of the other Caribbean destinations, Thomas said.
WICO has also partnered with the Florida Caribbean Cruise Association, the Hotel and Tourism Association and the Tourism Department to convert cruise ship passengers to overnight guests, who spend a lot more per person.
"We have seen significant growth in our hotel sector over the past two years," Thomas said. "And we believe that this is in part the result of this program."
That is not the only way WICO contributes to the local economy, Thomas said.
WICO enjoys a unique status as a not-quite government entity — and therefore not subject to such things as the Sunshine Act — but still pays no taxes. However, Thomas said, in the 13 years since WICO was purchased by the V.I. government from its Danish owners, the company – in keeping with its mandates – has contributed more than $10 million to the General Fund.
Among WICO's accomplishments in the past year, Thomas said phase one of the long-awaited Yacht Haven Grande project is nearing completion with a target date of September for the marina opening. The retail shops are set to be operational by Thanksgiving.
Yacht Haven Grande – a mega-development that includes a marina for luxury yachts, retail stories, condominiums, restaurants and a yacht club – sits on land leased to the developers by WICO under a 99-year lease. It is adjacent to Havensight Mall, which is also managed by WICO for the benefit of the Government Employees Retirement System.
Thomas went on to report that in calendar year 2005, 1.9 million cruise ship passengers arrived in St. Thomas, 1.7 million of whom disembarked at the WICO dock. WICO receives $3.50 of the $7.50 head tax collected on those who arrived at its dock. The 2005 arrivals exceeded those of 2003 by nearly two million – that despite a 2.4 percent reduction in arrivals stemming from the cruise lines changing their itineraries and sending ships to Hawaii and Asia. But 2005 was not quite as good as 2004, Thomas said.
Part of the reason St. Thomas did so well in 2004 was Hurricane Ivan, which devastated Grenada and areas of the Western Caribbean, and caused several ships to be diverted to St. Thomas.
By 2007 with the commissioning of the newest of the mega ships – the Freedom class – which are 125 feet longer than the current Voyager class, St. Thomas is likely to break the current records. The ships carry 4,000 passengers. But Thomas said in order to accommodate the new longer ships he will once again need to expand the dock, which will carry a price tag of $2 million. Thomas is currently putting the financing together for that project, which has already been awarded to V.I. Cement.
In some ways St. Thomas has benefited from the changes that occurred in the aftermath of 9/11 when the cruise lines developed "drive to" cruising because people did not want to fly to such places as Puerto Rico to embark. But it left some of the southernmost islands unreachable on a seven-day cruise, Thomas said. It also accounts for the lack of ships on Fridays, and only usually one on Mondays in St. Thomas because it takes two days to get to the Virgin Islands from the mainland ports, and the ships itineraries begin and end on Saturdays.
But Thomas said he didn't see a time when the ships would return to home port in Puerto Rico. "The cost of airfare is cutting into their revenues," Thomas said. "They are in no hurry to come back to Puerto Rico."
Thomas did not provide an annual report at the meeting, saying he needed to follow protocol by submitting it to members of the Legislature first, but promised to release it later this week.
All members of the PFA board were in attendance, which includes Turnbull; Ira Mills, director of the Office of Management and Budget; Bernice Turnbull, commissioner of Finance; Roy D. Jackson, of St. Thomas; and Paul J. Arnold, of St. Croix.

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